On March 7, 2011, Jeremy Tyler wrote Litigating The Right To Resolve Disputes Without Litigation, providing an excellent synopsis of various appeals Citizens Property Insurance Corporation (Citizens) pursued in the Florida Third District Court of Appeal related to compliance with policy conditions before appraisal. He discussed how Citizens is forcing policyholders to “proceed with evidentiary hearings to prove entitlement to an alternative dispute resolution proceeding that was, ironically, created as an alternative to litigation.” With so much contractual and judicial support for appraisal, policyholders may wonder what this evidentiary hearing that Citizens keeps requesting is supposed to accomplish.
We have written several times in the Condominium Insurance Law Blog regarding examinations under oath and their importance in the insurance claims process. In his July 3, 2010 post titled Examinations Under Oath Can Be Difficult For Associations, Corey Harris gave an excellent description of what an examination under oath is and what the process entails. Corey wrote that:
[A]nyone sitting for an EUO should remember that while it is not a “legal proceeding,” it is about as close as you can get. The insurance company’s representative asking the questions will undoubtedly be an attorney, and you should plan for some tough questions.
On September 12, 2011, in Customary Discovery Practices May Vary Greatly Between Federal And State Courts, I discussed how the Federal Middle District Court of Florida resolved a discovery dispute between Nationwide and Pepperwood of Naples Condominium Association. Recently, the Court decided another discovery dispute between the parties. This one involved Nationwide’s claim of attorney-client privilege and work product protection to some document requests. Such claims of privilege are common in litigation. The resolution of these disputes can play a very important role in the information that the policyholder can obtain to support its claims, especially in a bad faith case.
In a recent case, the Florida’s Third District Court of Appeals resolved a decade old controversy related to boat slips of a condominium association damaged by Hurricane Irene in 1999. The Court noted that the dispute had been ongoing for such a large amount of time that the National Weather Service re-circulated the name Irene, which just recently affected many people along the East Coast of the United States.
"Custom in law is the established pattern of behavior that can be objectively verified within a particular social setting.” Wikipedia. Recently, the Federal Middle District Court in Florida decided a discovery dispute between a condominium association and its insurer, Nationwide, in the case Pepperwood of Naples Condo. Ass’n., Inc. v. Nationwide Mut. Fire Ins. Co., No. 2:10-cv-753, 2011 WL 3841557 (M.D. Fla. August 28, 2011). Discovery disputes arise when one party asks another to produce information, but the other party coes not comply. It is common for insurers to refuse to produce claim file materials, claiming the documents are protected by certain privileges and citing other objections. The Pepperwood case involved a situation where the condominium association sued Nationwide for bad faith damages for not promptly paying all insurance proceeds from the 2004 hurricane damages and forcing it to incur additional expenses in the claim presentation through an appraisal process.
With so many recent disastrous events taking place across the United States it is important for associations, businesses and all policyholders to understand that in a property insurance claim, the devil is in the details. Hearing generalizations from insurance professionals about what may be covered and what may be excluded is not nearly enough when putting together a damage claim. The detail work is in the particular facts, documentation of the event and damage, and sometimes most importantly, the language of the policy at issue.
The issue of whether Florida’s legislative-created insurer, Citizens Property Insurance Corporation, is, or should be, subject to damages for bad faith claims handling practices has been heavily debated by industry professionals during the last several years. Debbie Moroy, of ClaimSmentor, recently posted a comment to request an update on the Citizens Property Insurance Corporation v. San Perdido Association, Inc. case. In my Property Insurance coverage Law Blog post from October 18, 2010, titled Bad Faith Lawsuit Allowed to Proceed to Trial Against Citizens Property Insurance Corporation, I discussed an interesting turn of events on this issue. At that time, the First District Court of Appeal rejected Citizens’ request to stop a bad faith action against it from proceeding in the trial court.
Last week in Can Insurers, Through Written Statements, Waive A Statute Of Limitations Defense?, I wrote about how Florida’s five-year statute of limitations applicable to the 2004 and 2005 hurricanes can be difficult to determine because it begins on the date an insurer breaches an insurance contract. Last week’s post discussed how the U.S. District Court for the Middle District of Florida held that the statute of limitations defense can be waived by insurers through written statements. The Southern District recently analyzed whether a claim for declaratory relief related to a statute of limitations issue in a Hurricane Wilma case was ripe for determination.
Telecommuting is a work arrangement in which employees enjoy flexibility in working location and hours. For them, the daily commute to a central place of work is replaced by cyber communication links. According to Wikipedia, estimates suggest that over fifty million U.S. workers (about 40% of the working population) could work from home at least part of the time. Some may work from home occasionally, while others may establish a home-based business. For many, homes are the most convenient and cost-effective workplace, particularly in this economic crisis. Homeowners in condominium associations may be subject to restrictions—or potentially even a total ban—on business use of their homes if the association has a residential restriction in its governing documents that prohibits the use of residential units for commercial purposes.
One of the best defenses against natural disasters is to have a disaster plan in place. Depending on where your association is in the United States, there are numerous disasters, such as earthquakes, wild fires, tornados, floods, and hurricanes that residents potentially face. Emergency planning has become an essential skill for association managers, who should understand what types of disasters are likely to occur, develop disaster response plans, practice them, and discuss them with the residents.