In Florida, plaintiff’s counsels routinely file motions to compel appraisal. Some trial judges were granting these motions without any consideration of the insurance carriers’ affirmative defenses related to an insured’s failure to comply with the policy’s post-loss obligations.
In 2011, the Third District Court of Appeal, covering the counties of Miami-Dade and Monroe (including the Florida Keys), further clarified that trial courts, as a condition precedent to appraisal, must conduct an evidentiary hearing to determine whether the insured has complied with his or her post-loss obligations.
While many Florida property insurance policies now require mutual consent before a claim may proceed to appraisal, for years, most policies contained the following provision: “If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss.” If the policy contains this language or something similar, the parties will likely be required to proceed with a hearing.
Two critical cases on this subject are Citizens Property Insurance Corporation v. Mango Hill Condo Assoc., 54 So.3d 578 (Fla. 3d DCA 2011) and Citizens Property Insurance Corporation v. Gutierrez, 59 So. 3d 177 (Fla. 3d DCA 2011).
Mango Hill, supra, held that as a preliminary matter a request for appraisal is not ripe unless and until the policy’s post-loss duties have been met.
In Gutierrez, supra, the Third District held that the trial court must conduct an evidentiary hearing to determine [i.e. the scope] whether the insured complied with the policy’s post-loss conditions. The court was clear: “[t]he insured must comply with all of the policy’s post-loss obligations before the appraisal clause is triggered.” Despite what appears to be self-evident, plaintiff’s counsels continue to insist that because the hearing is the result of their motion to compel, the post-loss duties are a secondary issue.
The predicate of any debate will always drive the analysis and the evaluation of the evidence. For this reason, having the trial court determine, at the outset, the threshold question it is required to answer is critical.
Irrespective of how or why the evidentiary hearing is held, Florida courts have made it abundantly clear that the question the trial court is required to answer is whether the insured complied with all post-loss obligations. However, plaintiff’s counsels typically pose the threshold question quite differently – “when did the insurance carrier know that a disagreement as to the amount of the loss exists?” Doing so allows plaintiff’s counsel to try and step around and avoid dealing with the insured’s post-loss duties.
The controlling authority is clear. If the insured fails to comply with any single post-loss duty, then appraisal must be denied, and importantly the Court never gets to the secondary question plaintiff’s counsels wish the Court to answer. Likewise, if the Court finds that the insured did comply with his/her duties, then the trial court can examine the evidence to determine if the carrier knew that a dispute regarding the amount of the loss existed.
What has been helpful has been to ask the trial court to identify in its order which question the court is actually answering – a clarification of great value and benefit to both insurers and their insureds.
Jorge L. Cruz-Bustillo, is a senior commercial attorney with The Barthet Firm, www.barthet.com, overseeing the firm’s insurance defense practice. Please direct communications to firstname.lastname@example.org.
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