Last week on the Property Insurance Coverage Law blog, I wrote about new appeals that had been filed in Florida’s Third District Court of Appeal in Miami regarding insurance appraisals. Since November of 2010, three new cases regarding appraisal had come out of the Third District: Citizens Prop. Ins. Corp. v. Galeria Villas Condo. Ass’n, Inc., 48 So. 3d 188 (Fla. 3d DCA 2010), Citizens Prop. Ins. Corp. v. Maytin, No. 3D10-693, 36 Fla. L. Weekly D51 (Fla. 3d DCA Dec. 29, 2010), and Citizens Prop. Ins. Corp. v. Mango Hill Condo. Ass’n 12, Inc., No. 3D10-2014, 2011 WL 613518 (Fla. 3d DCA Feb. 9, 2011). As of last week’s blog post, four new appeals had been filed by Citizens, which makes a total of seven (7) appraisal appeals filed by Citizens in the Third District alone.
On Wednesday of last week, the Third District published the first of the four pending decisions, Citizens Prop. Ins. Corp. v. Gutierrez, No. 3D10-2134, 2011 WL 710148 (Fla. 3d DCA Mar. 2, 2011). The Gutierrez opinion is another short one, weighing in at only two (2) pages of double-spaced, 14 point text.
The facts in Gutierrez sound familiar. A commercial property, a Hurricane Wilma loss, a paid claim, and later found damage that was unaccounted for in the initial claim. The insured substantiated its claim with inspections, a sworn proof of loss, and a contractor’s estimate. Citizens demanded additional documentation and refused to proceed with appraisal until it was satisfied, unilaterally claiming a false “agreement” as to the amount of loss until each of its demands had been strictly complied with. After more than nine months of waiting for Citizens to respond, the insured filed suit and the trial court ordered appraisal.
One the legal side, the Court followed the three prior cases, Galeria Villas, Maytin, and Mango Hill. The Court held that the insured was required to comply with the conditions precedent to appraisal, and, as long as there was a dispute of fact as to whether the insured had complied with them, the court must view the evidence before ordering the parties to appraisal.
When the same insurance company appeals the same issue several times in rapid succession, a pattern starts to form. The first noticeable item is that Citizens, whether intentionally or not, appears to have missed a lot of damage on a lot of claims when it originally adjusted Hurricane Wilma claims. Second, Citizens doesn’t seem to want to voluntarily account for that missed damage, despite the fact that it previously admitted coverage for the claims. Even though plenty of evidence is provided to Citizens to substantiate missed hurricane damage, Citizens is unilaterally holding out on appraising the losses. Citizens is claiming lack of inspections, allegedly defective sworn proofs of loss and answers to examination under oath questions, or alleged lack of sufficient documentation to avoid appraising the missed damage. By unilaterally holding out, Citizens is forcing insureds to file suit and proceed with evidentiary hearings, not to prove entitlement to benefits, but to prove entitlement to an alternative dispute resolution proceeding that was, ironically, created as an alternative to litigation. Yes, it appears now that insureds have to litigate their rights to resolve disputes without litigation.
This is hopefully not the end to this issue. As discussed before, at least three more Citizens’ appraisal appeals are currently before the Third District Court of Appeal. Check back on both this blog and the Property Insurance Coverage Law blog for updates, and we will keep you posted as each new opinion is published.