Post-Loss Duties –SPOL (Waiver and Prejudice Analysis)

EDDRIN MARTINEZ AND CARMENT MARTINEZ v. UNIVERSAL PROPERTY & CASUALTY INS. CO., No. 5D213016 (Feb. 9, 2023)

KK TAKEAWAY: A complete denial of coverage is a waiver of an insured’s post-loss duties

KK TAKEAWAY: Insured can overcome forfeiture by showing no prejudice to the insurer.

BACKGROUND:

Insureds sought coverage for two water losses resulting from plumbing leaks. Universal requested a sworn proof of loss after inspection. The policy allowed the Insureds to submit the sworn proof of loss within 60 days of request. However, before the expiration of that time period, Universal denied coverage for the claim.

During litigation, Universal filed a motion for summary judgment for the Insureds’ failure to comply with the condition precedent to suit, the sworn proof of loss. The trial court granted summary judgment in favor of Universal.

On appeal, the Fifth District Court of appeals reversed the trial court. First, the Fifth District noted that once Universal denied coverage, the Insureds were no longer required to comply with the post-loss conditions. Second, the Fifth District noted that the Insured can still demonstrate that the failure did not prejudice Universal. In this instance, the ability to come to the claim decision of no coverage is evidence that Universal was not prejudiced.

KK TAKEAWAY: Failure to submit a sworn proof of loss is not automatic forfeiture of coverage.