Tag Archives: Neutral Evaluation

Florida’s Second DCA Finds Sinkhole Insurance Claim Neutral Evaluation is Mandatory … All the Time

Florida Homeowners Insurance Claims and Litigation Handbook


Want to read about the definitive appellate decision on sinkhole coverage and neutral evaluation? You have come to the right place.

In Trapeo v. Citizens, the Second DCA recently reminded us that neutral evaluation for sinkhole claims is mandatory regardless of when requested. 

Here is a copy of the order:

Download (PDF, 63KB)

In 2009, Citizens issued the insurance policy at issue to the Plaintiff, Gary Trapeo.  In 2010, he reported a sinkhole claim.  In 2012, he filed a lawsuit against Citizens alleging its repair recommendation was not sufficient to stabilize the property.  In December of 2012 and after the parties engaged in discovery, Citizens requested neutral evaluation.  In addition, Citizens filed a “Notice of Automatic Stay” with the trial court requesting the case be stayed until after the parties participated in neutral evaluation.  Mr. Trapeo objected to the Notice and argued that Citizens, by participating in the litigation for approximately 10 months, waived its right to stay the case and demand neutral evaluation.  The trial court agreed with him and denied Citizens the opportunity to submit the claim to neutral evaluation.

ins c

The Second DCA first addressed whether the 2009 or 2011 version of Fla. Stat. 627.7074 (the neutral evaluation statute) applied by the trial court.  The main difference between the two statutes is that the 2011 version mandates stay of the case and participation in the neutral evaluation process “regardless of when noticed.”  The Second DCA determined the stay portion of the 2011 statute was “procedural” rather than “substantive;” therefore, the 2011 statute must be applied to a lawsuit filed after its effective date.

The Court explained why Citizens could not waive its right to request neutral evaluation:

Citizens correctly argues that neutral evaluation, once requested, is mandatory. The trial court’s determination that neutral evaluation was waived conflicts with the express language of the statute. “Neutral evaluation is available to either party,” “supersedes the alternative dispute resolution process under s. 627.7015,” and is “mandatory if requested by either party.” § 627.7074(2), (3), (4). The statute’s language is compulsory; it repeatedly and almost exclusively directs that acts “shall” occur. There is no waiver provision and no timeframe for requesting neutral evaluation.2 It is an optional but statutorily guaranteed process. That is, once the request for neutral evaluation has been filed with the Department, participation in neutral evaluation is mandatory and guaranteed. See § 627.7074(4); cf.Williams, 62 So. 3d at 1135-36. Certiorari relief is appropriate because the trial court’s order purports to deprive Citizens of a statutory process to which it is entitled resulting in material harm. Cf.Williams, 62 So. 3d at 1136-37. This conclusion is supported by language of the statute applicable at the time the lawsuit was filed. The 2012 statute specifically provides, “Regardless of when noticed, any court proceeding related to the subject matter of the neutral evaluation shall be stayed pending completion of the neutral evaluation and for 5 days after the filing of the neutral evaluator’s report with the court.” § 627.7074(10) (emphasis added); cf. Cruz, 76 So. 3d at 398 n.1 (“We also note that section 627.7074 does not impose a waiver or other penalty when a neutral evaluation is not completed within forty-five days. Its proviso that ‘[n]eutral evaluation shall be conducted as an informal process in which formal rules of evidence and procedure need not be observed,’ § 627.7074(5), suggests that the legislature intended no sanction for failure to strictly adhere to the time period.”). The statute provides neutral evaluation as both a potential precursor to litigation and as a parallel, contemporaneous process. It is not an “either or” or “opt out of litigation” procedure, unlike contractual arbitration provisions. Cf. ch. 682, Fla. Stat. (2011) (applying to those instances where the parties have an arbitration agreement). It is also not a process that occurs as part of a civil proceeding, unlike court-ordered mediation, nor is it a presuit requirement.

In addition, the Second DCA held “the circuit court does not have authority over the neutral evaluation process.  The Department [of Financial Services] does.”  Accordingly, the court determined that only the Department has the power to decide whether a party has waived its right to neutral evaluation.

In addition, the court determined that Citizens correctly invoked the process simply by filing the Notice of Automatic Stay.

In a footnote, the court acknowledged the trial court’s concern that this ruling allows a party to request neutral evaluation on the eve of trial; however, the court responded that “the current language of the statute is clear.”

Thankfully, this issue is now resolved.  By my count, this is now the third time the Second DCA has ruled in an insurer’s favor requiring the parties to participate in neutral evaluation.  I would assume this will be the last.  To summarize, when a party requests neutral evaluation, the case is stayed and the parties must attend neutral evaluation.  There do not appear to be any exceptions.  In addition, if a party thinks there may be an exception, the trial court is not the forum, the Department of Financial Services is.

For more information on sinkhole claims and insurance litigation, feel free to contact me at (813) 513-5440 or email me at [email protected] You can also find several articles addressing the legal issues arising from sinkhole claims here.


Here is one of the few occasions when plaintiffs’ attorneys failed to properly use litigation project management.  Although they might argue that they had an obligation to fight this issue, the statutes were pretty clear (and the majority of plaintiffs’ attorneys agreed) that neutral evaluation is required when requested.  Plaintiffs’ attorneys are usually the best at making efficient and effective decisions using project management; however, they failed here.

If you want to know more about the remarkable things that are being done to control homeowners insurance litigation, including checklists and guides for sinkhole claims, please message me.

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Florida Homeowners Insurance Sinkhole Claims Analysis: Sinkholes and MSJs on the Stabilization Repairs (Pre-408 Policies)

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*April 30, 2014: as a result in the decline in sinkhole claims, there have not been many developments on the contract for repair requirement since I first won this issue over a year ago.  

Insurance Policy

Insurance Policy

In a sinkhole case, can an insurer win a summary judgment that the insured is not entitled to coverage for subsurface repairs, even though that insured has entered into a contract for stabilization repairs in accordance with recommendations of the engineer the insured retained? Yes, even if the policy did not incorporate the statutory amendments from Senate Bill 408.

I previously obtained a summary judgment (and at least one other Judge in Hillsborough county has adopted the same position) in a Hillsborough county case where the Court ruled that:

if the insured wanted coverage for the cost of stabilization repairs, the policy and applicable statutes required the insured to enter into a contract for stabilization repairs that was in accordance with the recommendations of the engineer selected or approved by the engineer retained by the insurer.

The Court determined that, although the insured had entered into a contract for repair in accordance with her engineer’s recommendations, she still was not entitled to any coverage for stabilization repairs.

The Court cited five reasons:

1. Fla. Stat. 627.707 (5) (a) (2005) requires the coverage to be the cost of repairs recommended by the insurer’s engineer:

“if a sinkhole loss is verified, the insurer shall pay to stabilize the land and building and repair the foundation in accordance with the recommendations of the professional engineer as provided under s. 627.7073, and in consultation with the policyholder, subject to the coverage and terms of the policy.”

The engineer provided under Fla. Stat. 627.7073 is (usually) the engineer retained by the insurer; therefore, Fla. Stat. 627.707 (5) (a) requires the insurer to provide coverage in accordance with its engineer’s specifications.

2. Fla. Stat 627.7073 (1) (c) (2006) provides a presumption of correctness for purposes of relying on the insurer’s retained engineer’s recommendations:

“The respective findings, opinions, and recommendations of the professional engineer or professional geologist as to the cause of distress to the property and the findings, opinions, and recommendations of the professional engineer as to land and building stabilization and foundation repair shall be presumed correct.”

The Court understood that this was not a presumption in evidence terms; however, it was a presumption that made sense in combination with Fla. Stat. 627.707 (5) (2005) and the policy form.

3. The first half of Fla. Stat. 627.707 (5) (b) (2005) limits coverage for stabilization repairs until the insured enters into the contract for stabilization repairs covered by the insurer:

“The insurer may limit its payment to the actual cash value of the sinkhole loss, not including underpinning or grouting or any other repair technique performed below the existing foundation of the building, until the policyholder enters into a contract for the performance of building stabilization or foundation repairs. After the policyholder enters into the contract, the insurer shall pay the amounts necessary to begin and perform such repairs as the work is performed and the expenses are incurred. … “

4. The second half of Fla. Stat. 627.707 (5) (b) (2005) provides insureds with recourse in the event the stabilization repairs recommended by the insurer’s engineer are not sufficient:

“If repair covered by a personal lines residential property insurance policy has begun and the professional engineer selected or approved by the insurer determines that the repair cannot be completed within the policy limits, the insurer must either complete the professional engineer’s recommended repair or tender the policy limits to the policyholder without a reduction for the repair expenses incurred.”

5. The policy properly incorporated these provisions.

Other Notes

The Court had actually ruled against this same argument weeks before this hearing; however, when presented with a complete understanding of the statutory framework, the Court agreed that the statutes and policy require an insured to enter into a contract in accordance with the insurer’s retained engineer’s stabilization repair plan if he or she wants that coverage.

We also argue that the following two cases suggest that an insurer should be entitled to summary judgment on the cosmetic repairs when an insured has not entered into a compliant contract for stabilization repairs:

Ceballo v. Citizens, 967 So. 2d 811 (Fla. 2007) and

Slayton v. Universal Property and Casualty Ins. Co., 103 So. 3d 934 (Fla. 5th DCA 2013).

We read these cases as supporting the proposition that, without the subsurface repairs, any dispute on the estimated cosmetic damages is simply premature. The insured should be giving the insurer the opportunity to coordinate performance of the stabilization repairs, then inspect the property after those repairs are complete, and then issue any supplemental payment for additional damages that might be necessary. Although the provisions at issue in Slayton and Ceballo are not identical to the sinkhole loss provisions, the sinkhole loss settlement provisions also indicate that additional damages may occur after the repairs and there may be more coverage available.

I’d be happy to provide you with copies of the orders or anything else you might need in regards to these issues.

Sinkhole Formation

Sinkhole Formation



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Waiver and Estoppel in Florida Homeowners Insurance Claims

Florida Homeowners Insurance Claims and Litigation Handbook


Why is it that homeowners insurers have to wait until its too late until they find out that the homeowners have evidence to show there may be a defense for waiver and estoppel?  First, read this article to understand what waiver and estoppel is and how it is used in Florida homeowners insurance litigation.  Second, scroll to the bottom of this article to set up a free meeting with our professionals to provide you with a free Litigation Analysis that will explain how and why routine issues like these should never be noticed too late again.

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Before we go on, if you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.

contract 2

Update: this is one of the most important articles on this blog to read, especially for newer attorneys and adjusters. I have helped many carriers implement protocols for ensuring that everyone knows about waiver and estoppel and to help create tools to automate the process avoiding one of these costly mistakes. You have got to understand all of these cases if you are going to litigate these cases.

Make sure to read all the way to the end of this post to learn how I propose making sure carriers cheaply guarantee they avoid waiving and being estopped from litigation defenses.*

In my experience, when I am confronted with insureds’ attorneys’ argument that the insurer was waived or estopped from asserting a defense, I know I have a good defense. For anyone who does not know, insureds’ attorneys almost always argue that some act by an insurer constituted a waiver of a particular defense. Knowing exactly what will be argued and how to respond can be the difference between winning and losing, as there are great cases that outline exactly how to respond to these arguments.

The Basics

To have waiver, you have to have (1) the existence at the time of the alleged waiver of a right; (2) the actual or constructive knowledge of that right; and (3) the intention to relinquish that right. See Leonardo v. State Farm Fire & Cas. Co., 675 So. 2d 17, 178 (Fla. 4th DCA 1996). Other than promissory estoppel, there is no creation of coverage by estoppel in Florida. See Doe v. Allstate Ins. Co., 653 So. 2d 371 (Fla. 1995). To have estoppel you must have (1) a representation as to a material fact that is contradicted by a later asserted position; (2) reliance on that representation; and (3) a change in position detrimental to the party relying on the representation and caused by the representation. See Lloyds Underwriters at London v. Keystone Equip. Fin. Corp., 25 So. 3d 89, 93 (Fla. 4th DCA 2009).

As noted below, unless you have a legal defense based on the nature of the defense provision being asserted, pay close attention to whether the party claiming the estoppel or waiver has actually presented evidence to support each of these elements.

Some Defenses Simply Cannot be Waived

An insurer can allegedly waive or be estopped from asserting a defense to an otherwise covered claim, but an insured cannot gain through estoppel or waiver a coverage that it never had. See generally Unijax, Inc. v. Factory Ass’n, 328 So. 2d 448, 455 (Fla. 1st DCA 1976). The Fourth DCA in Lloyds Underwriters at London v. Keystone Equip. Fin. Corp. provided one of the more detailed outlines of the distinction between what can and cannot be waived. 25 So. 3d 89, 93 (Fla. 4th DCA 2009). The Keystone decisions suggests that if a claim is specifically covered but was not covered for some other reason, then the insurer must timely assert that other reason when it becomes aware of its existence. In that case, you would not be re-writing the policy to provide coverage; instead, you would be rewriting the policy to avoid forfeiture. An example of something that cannot be waived is the policy limit. Nationwide Mut. Fire Ins. Co. v. Voigt, 971 So. 2d 239, 242 (Fla. 2d DCA 2008). Another example of something that cannot be waived is additional coverage provided by an endorsement that was not issued. See AIU Ins. Co. v. Block Marina Investment, Inc., 544 So. 2d 998 (Fla. 1989). Further, a policy period is not something that can be waived. U.S. Fidelity and Guar. Co. v. American Fire and Indem. Co., 511 So. 2d 624 (1987).

In sum, I think of it as follows: if deleting the provision with the defense at issue would leave a blank page without any coverage (policy period, policy limit, and I would argue, the structure covered), then it cannot be waived. If deleting the provision with the defense at issue would still leave provisions that provided coverage, then there is at least an argument that it can be waived, unless that provision is an essential part of how the coverage is distributed.

The Evidence of Waiver or Estoppel Must Be More Than an Inference

It is important to point out for the Court if the insureds’ attorney is only suggesting that there was waiver, rather than showing evidence of waiver and specific reliance on a specific position that later changed. Otherwise, an insured simply alleging that the reliance was reasonable without evidence of the same should not overcome a summary judgment on waiver or estoppel grounds See generally Reliance Mut. Life Ins. Co. of Ill. v. Booher, 166 So. 2d 222 (Fla. 2d DCA 1964); Blue Cross and Blue Shield of Florida, Inc. v. Ming, 579 So. 2d 771 (Fla. 5th DCA 1991); Carneiro Da Cunha v. Standard Fire Ins. Company/Aetna Flood Ins. Program, 129 Fl. 3d 581 (11th Cir. 1997); Unijax, Inc., 328 So. 2d at 455.

Timing to Assert the Defense

Attorneys representing insureds also will argue that the insurer waited too long to assert the defense. One example is Johnson v. Life Insur. Co. of Georgia, where the Florida Supreme Court imputed an agent’s knowledge to the insurer to prohibit the insurer from later asserting a defense based on misrepresentation in the application. 52 So. 2d (Fla. 1951). The counterargument for an insurer can be that the insurer did not have knowledge of the misrepresentation or defense until more recently, and then it acted promptly on the defense at that time. See United Services Automobile Association v. Clarke, 957 So. 2d 554 (Fla. 4th DCA 2000).

The following link from the Butler Pappas website has some great cases regarding when late might not be too late to assert a coverage defense: http://www.butlerpappas.com/512.


Ultimately, the case law suggests that insureds, insurers, and their attorneys should all be armed with the information they need to make sure that all bases are covered. For every argument, there is a counterargument. Without a comprehensive understanding of these issues (and the vast array of waiver and estoppel issues not addressed in this post), it could be easy to get tripped up in a hearing on these issues. The best you can do is learn the nuances, or ask someone who already has.

*April 30, 2014 Update: How does Todd Legal, P.A. prevent these mistakes from becoming too costly*

How can you make sure that every adjuster and every attorney past, present, and future check to see if there were actions or omissions that may constitute waiver and estoppel of an otherwise solid defense? Will an email work?  No. New adjusters and attorneys will never get it. Will a note to the file work?  Come on, give me a break.

But guess what will work?  If you shift your communication and case strategies from out of emails and Word documents and into a web-based project management portal.  Then, you can make sure every adjuster and every attorney on every case is asked whether there may be a waiver or estoppel issue, and you have to go no further than two clicks online to find the answer for your specific case.  What does this do?  Saves you a ton of money.  Instead of finding that out after your summary judgment or trial, Todd Legal, P.A. automatically embeds this question into every case to limit the surprises and reduce the costs resulting from a coverage decision error.

I offer innovative services and software that can automatically implement the strategy changes to be consistent with the information in this article.  If you want to know more about how I can help your company or firm ensure that your strategies are up-to-date and complied with by all of your colleagues and vendors, then contact me.  Furthermore, if you want a litigation project manager with a powerful software tool that allows your attorneys to draft top-down approved legal documents in every case with the click of a button, then read more about my services here.

The more you automate these routine tasks, the more time you will have to proactively manage your claims and cases.


We have actually made these issues a “fill-in-the-blank” and “check-the-box” evaluation on our web-based software, CaseGlide.  You should, too.  Message me if you need any help turning the waiver and estoppel evaluation into a structured system to save costs and obtain better results.

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