Kelley Kronenberg - In The Know - First Party Property Appellate - November 2022

First Party Property Appellate Team

As the first-party property insurance industry has remained significantly litigious, Kelley Kronenberg has maximized its efforts to bring positive changes to the law for the benefit of all of its clients by establishing an expertise in appellate law. Our appellate team has a combined portfolio of more than 100 written court opinions impacting case law precedence across the state. At every stage of the process – deciding whether to appeal, determining the chance of success on appeal, preparing legal briefs, presenting oral arguments, and advising on the impact of appellate decisions – Kelley Kronenberg’s First Party Property Appellate Team provides clients with expert guidance and representation in all appellate jurisdictions.

ADMISSIONS

Florida • Georgia • United States Court of Appeal, Eleventh Circuit

SELECTED OPINIONS

w Expert Inspections, LLC d/b/a ITest d/b/a Moldexpert.com a/a/o Pat Beckford v. United Property & Casualty Insurance Company, 333 So.3d 200 (Fla. 4th DCA 2022) (holding that an insurer cannot be required to follow the terms of an AOB contract where the insurer is not a party to that contract).

w The Kidwell Group, LLC d/b/a Air Quality Assessors of Florida a/a/o Maria Amadio v. Olympus Insurance Company, Case No. 5D21-2955 (Fla. 5th DCA July 22, 2022) (interpreting section 627.7152, F.S., as applying to AOB contracts executed after the enactment of the statute, finding the policy inception date irrelevant to the analysis).

w Saunders v. Florida Peninsula Insurance Company, 314 So.3d 592 (Fla. 3d DCA 2020) (interpreting the “faulty workmanship” policy exclusion to include the workmanship process as well as the finished product in affirming the insurer’s denial of a property damage claim).

w The Kidwell Group, LLC d/b/a Air Quality Assessors of Florida a/a/o Benjamin Kivovitz, Case No. 4D21-2843 (Fla. 4th DCA June 15, 2022) (enforcing the new section 627.7152, F.S., requirement of including a line-item estimate with an AOB contract at the time of execution)

ADMISSIONS

Florida • U.S. District Court, Northern District of Florida • U.S. District Court, Middle District of Florida

SELECTED OPINIONS

w Progressive American Insurance Company v. Glassmetics, LLC, No. 2D21-488, 2022 WL 1592154 (Fla. 2d DCA 2022) (“we reverse the trial court’s order and its conclusions (1) that the appraisal provision was against the public policy underlying section 627.428; (2) that the appraisal provision failed to provide sufficient procedures and methodologies; (3) that Progressive waived its appraisal right; (4) that the appraisal provision was unenforceable because Progressive failed to prove that the insured knowingly, voluntarily, and intelligently waived his rights of access to courts, to a jury trial, and to due process; and (5) that the appraisal provision contains an ambiguity.”).

w All Auto Glass v. Progressive American Ins. Co., Case No. 2018-SC-3126, 2019-33-AP (Fla. Seminole Cnty. Appellate Division.) (“reversing trial court, holding ruling of district court of appeal in jurisdiction other than where trial court is located is binding upon trial court absent conflict with another district court of appeal. )

w Progressive Am. Ins. Co. v Broward Ins. Recovery Ctr., LLC, 322 So. 3d 103 (Fla. 4th DCA 2021) (“reversing trial court, holding prohibitive cost doctrine inapplicable to appraisal”).

ADMISSIONS

Florida • District of Columbia • United States District Court, Southern District of Florida • United States District Court, Middle District of Florida • United States District Court, Northern District of Florida • United States Court of Appeals, Eleventh Circuit Supreme Court of the United States

SELECTED OPINIONS

w Taffe v. Wengert, 775 F. App’x 459 (11th Cir. 2019) (reversing the denial of summary judgment in the district court for the sheriff and finding the sheriff was not negligent in the hiring, supervision, or retention of deputy sheriff)

w Taffe v. Wengert, 140 S. Ct. 1106, 206 L. Ed. 2d 179 (2020) (Petition for writ of certiorari to the United States Court of Appeals for the Eleventh Circuit denied).

w Williams v. Tony, 319 So. 3d 653 (Fla. 4th DCA 2021) (holding the plaintiff inmate was not an intended third-party beneficiary of the contract between county sheriff and inmate medical services provider, and, thus, could not pursue a negligence claim against provider based on the contract).

w People’s Tr. Ins. Co. v. Progressive Express Ins. Co., 336 So. 3d 1207 (Fla. 3d DCA 2021) (holding the commercial automobile liability policy excluded coverage for property damage caused by improper operation of mobile crane mounted on a truck).

w Watkins v. Pinnock, 802 F. App’x 450, 454 (11th Cir. 2020) (holding that the plaintiff’s proposed amendments could not cure the deficiencies in the fifth amended complaint as the factual allegations did not support deliberate indifference by the nursing staff).

TABLE OF

CONTENTS

AOB DEFICIENCIES

Air Quality Experts Corporation v. Family Security Ins. Co., No. 4D21-2516 (4th DCA Oct. 12, 2022) 4

Kwaku Adjei, et al., v. First Community Ins. Co., No. 3521-1348 (3d DCA Oct. 19, 2022) 5

MISREPRESENTATIONS DEFENSE

Cesar Benitez v. Universal Property and Casualty Ins. Co., No. 4d21-3281 (Fla. 4th DCA Oct. 12, 2022) 6

PROCEDURAL CHALLENGES

The Kidwell Group, LLC d/b/a Air Quality Assessors of Florida a/a/o Lucy Collier v. Florida Farm Bureau Casualty Ins. Co., No. 2D21-321(Fla. 2d DCA Oct. 19, 2022) 7

Air Quality Assessors of Florida v. Southern-Owners Ins. Co., No. 1D21-1217 (Fla. 1st DCA Oct. 26, 2022) . 6-7

AOB Deficiencies

Air Quality Experts Corporation v. Family Security Ins. Co., No. 4D212516 (4th DCA Oct. 12, 2022)

KK TAKEAWAY:

A price list is not compliant with section 627.7152(2)(a)4, requiring a line-item estimate within an assignment of benefits.

KK TAKEAWAY:

A “menu of services” is not the same as an estimate.

BACKGROUND:

The trial court dismissed a complaint filed by assignees for failure to comply with section 627.7152, Florida Statutes. The complaint was dismissed for failure to include a lineitem estimate within the assignment. The

assignment contained the relevant provision: PRICE LIST FOR MOLD ASSESSMENT 1. Visual Inspection of Arca/ Digital Photography $20.00 (per room). 2. FLIR Assessment of Area/ Moisture Readings $ 40.00 (per room). 3. Visual Inspection of HVAC Unit/ Digital Photography $ 75.00 (per unit). 4. Surface Sample/ Lab Results $ 95.00 (per sample). 5. Air Sample/ Lab Results $ 95.00 (per sample). 6. Report I Protocol $150.00 (per report issued). 10. PRICE LIST FOR POST REMEDIATION ASSESSMENT 1. Visual Inspection of Area/ Digital Photography $20.00 (per room). 2. Surface Sample/ Lab Results $ 95.00 (per sample). 3. Air Sample/ Lab Results $ 95.00 (per sample). 4. Clearance Report $150.00 (per report issued). The Fourth District Court of Appeals held that this was a price list, not an estimate. Noteworthy is the assignment did not provide the Insured with an estimated cost of services to be rendered. A “menu of services” is not the same as an estimate.

Kwaku Adjei, et al., v. First Community Ins. Co., No. 3521-1348 (3d DCA Oct. 19, 2022)

KK TAKEAWAY:

Assignments that include maintenance and repair requirements are subject to section 627.7152, Florida Statutes

KK TAKEAWAY:

Section 627.7152(2)(a), Florida Statutes is procedural and applies from the date the assignment is executed.

BACKGROUND:

Assignees argued that they were not subject to section 627.7152, Florida Statutes, as the assignment was not for services to protect, repair, restore, replace, or mitigate against further damage. The assignment was from the Insureds, the parents of the assignees, for:

I, Beatrice Adjei and Kwaku Adjei, hereby assign Joel Adjei and Jeremiah Adjei any and all rights and benefits that I have in relation to any and all insurance policies that were maintained in relation to the residence located at 17168 SW 144th Place, Miami, FL 33177, including but not limited to The trial court dismissed a complaint filed by assignees for failure to comply with section 627.7152, Florida Statutes the policy that was maintained by First Community Insurance Company, and identified by policy number 09-00116059444-02 in relation to claim number 17-7275. This assignment as stated is in consideration of the fact that the referenced residence has

served, and continues to serve as Joel and Jeremiah Adjei’s primary residence in relation to this agreement to insure maintenance repairs and they have been agreed to maintain, repair or otherwise take responsibility for the various others obligations and they have liabilities associated with the ownership of the residence.

The 3d District Court of Appeals held that the following assignment language: to “insure maintenance repairs” and “agree[] to maintain, repair or otherwise take responsibility for the various other obligations” of ownership expressly implicated the statutory scheme.

Assignees also argued that the application of section 627.7152, Florida Statutes, would be an impermissible retroactive application as the policy predated the statute’s effective date. The 3d District Court of Appeals held that the statute was procedural as it only regulates the contents of an assignment. Thus it is procedural and can be applied.

Misrepresentations Defense

Cesar Benitez v. Universal Property and Casualty Ins. Co., No. 4d213281 (Fla. 4th DCA Oct. 12, 2022)

KK TAKEAWAY:

Failure to disclose prior claims or loss is a statutory and contractual basis for denial of coverage.

KK TAKEAWAY: Section 627.409, Florida Statutes permits in

instances of misrepresentation recission of a policy, but alternatively allows an insurer to deny coverage.

KK TAKEAWAY: Continued acceptance of premium after discovery is not a waiver of the defense of misrepresentation pursuant to statute.

BACKGROUND:

The Insured’s claim was denied for misrepresentations made within the application process, specifically that no prior losses had occurred. During claim inspection, pre-existing damage and repairs were observed. The Insured then filed a breach of contract action. In response, Insurer sought

dismissal for fraud on the court, or alternatively summary judgment on Insurer’s affirmative defense based upon section 627.409, Florida Statutes:

(1) Any statement or description made by or on behalf of an insured or annuitant in an application for an insurance policy or annuity contract, or in negotiations for a policy or contract, is a representation and not a warranty. Except as provided in subsection (3), a misrepresentation, omission, concealment of 2 fact, or incorrect statement may prevent recovery under the contract or policy only if any of the following apply: (a) The misrepresentation, omission, concealment, or statement is fraudulent or is material to the acceptance of the risk or to the hazard assumed by the insurer.

Insurer further raised challenges based on the misrepresentation exclusions within its policy. The Insured did not deny the existence of pre-existing losses nor his failure to provide information regarding the loss during the application process. Instead, the Insured claimed that the Insurer waived the defense when it collected premiums for two years after knowledge of the prior loss.

The Fourth District Court of Appeals held that the trial court properly granted summary judgment as the failure to disclose the prior loss was a misrepresentation triggering the policy exclusion and section 627.409, Florida Statutes. While section 627.409 permits the policy rescission as a remedy, the statute alternatively permits the denial of coverage. The record was clear that Insurer sought denial and not recession.

Procedural Challenges

The Kidwell Group, LLC d/b/a Air Quality Assessors of Florida a/a/o Lucy Collier v. Florida Farm Bureau Casualty Ins. Co., No. 2D21-321(Fla. 2d DCA Oct. 19, 2022).

KK TAKEAWAY:

A motion to dismiss cannot raise factual issues beyond the four corners of the complaint and the attachments incorporated into the complaint.

BACKGROUND:

Insurer filed a motion to dismiss, asserting that AQA did not have standing as AQA assigned its right to the benefits to another party. However, the only assignment attached to the complaint was the assignment from the Insured to AQA. The trial court dismissed the complaint for lack of standing. However, the Second District Court of Appeals held that the second assignment was outside the four corners of the complaint, nor was it incorporated by reference. The Second District went further to say that “impliedly incorporated” is insufficient to allow the trial court to consider the second assignment when reviewing a challenge raised via motion to dismiss.

Air Quality Assessors of Florida v. Southern-Owners Ins. Co., No. 1D211217 (Fla. 1st DCA Oct. 26, 2022).

KK TAKEAWAY:

Ambiguities in policy limitations and exclusions will be resolved in favor of coverage.

KK TAKEAWAY:

A motion to dismiss is limited to challenges to allegations within the statement of the claim.

KK TAKEAWAY:

with prerequisites to section 627.7153, antiassignment provisions, are factual issues that cannot be resolved via motion to dismiss.

BACKGROUND:

Insurer filed a motion to dismiss, asserting:

1) Water damage is not covered under the policy;

2) Services for mold or mildew were excluded from coverage; and

3) The Insurer did not approve the assignment as required by the policy. The trial court agreed, and Air Quality took

an appeal. The First District Court of Appeals overturned the dismissal holding:

1) The policy was ambiguous regarding the water damage exclusion, thus unenforceable. The crux of the issue was that the policy expressly excluded water losses caused by flood, surface water, waves, tidal water, or overflow of a body of water. However, it did not expressly exclude water damage caused by rain.

2) There was insufficient information in the statement of claim to establish that the claim was related to mold or mildew to trigger the mold and mildew exclusion.

3) Longstanding Florida law has held that policies cannot restrict the postloss assignment of benefits. However, the legislature has enacted legislation to permit restriction. The law, section 627.7153, Florida Statutes, was enacted on July 1, 2019, and all subsequent assignments were subject to the law. However, there was nothing in the statement of claim to indicate that the prerequisites for applying section 627.7153, Florida Statutes, were complied with. This factual issue cannot be resolved via a motion to dismiss.

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