Tag Archives: Property Claims

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.

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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’s Second DCA Enforces Residence Premises Defense in Homeowners Insurance Claim

Florida Homeowners Insurance Claims and Litigation Handbook


We are all about getting results.  Read this article to find out about our one-of-a-kind successes with the “residence premises” defense.

Make sure to read all the way to the end to receive our free offer for a Litigation Report.

In a case where I was the attorney at the trial court level, Florida’s Second District Court of Appeals determined the insureds did not have homeowners insurance coverage for a sinkhole claim under an HO-3 policy because they did not reside at the property.

photo from http://i2.cdn.turner.com/money/2011/03/28/real_estate/us_housing_vacancy_rates/vacant_house.gi.top.jpg

If you are not familiar with the HO-3’s coverage requirement that the homeowners reside at the property, please review my analysis of the “residence premises” defense in this post.

Here is the Second DCA’s per curiam affirmed order:

Download (PDF, 273KB)

Although the decision is a PCA rather than a written order, I am excited to learn that this lengthy battle is (probably) over and that my client was able to enforce its policy’s requirements.  Insurers, insureds and their attorneys have been ignoring this “residence premises” issue for years.  Many thought that insurers lost the right to enforce the occupancy requirement when Florida courts construed the vacancy exclusion in the insureds’ favor.  By refocusing the attention to the definition of “residence premises,” the courts understood and appreciated that my client only agreed to insure this home if and when the insureds occupied it.

If you have any questions and want further information or documents, please contact us.


I can bet you at least half of your attorneys have never heard of this defense, and another 25% aren’t checking for it because you aren’t asking them for it.

If you want guides, checklists, and templates for winning this “residence premises” defense, please message me.

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Ten Reforms to Fix Florida’s Homeowners Insurance Market

Florida Homeowners Insurance Claims and Litigation Handbook

Average Home Insurance Cost

photo from http://www.insuranceproviders.com/

The James Madison Institute and the R Street Institute issued a detailed report outlining ten ways to help Florida’s property insurance market without raising rates.  The full report is here:

Download (PDF, 1.08MB)

In this comprehensive report, the institutes suggest ten critical changes to allow insurers to succeed in Florida.  PropertyCasualty360’s article provides the following breakdown:

1.     Implement the Hager incremental Cat Fund reduction plan

2.     Establish requirements for “assignment of benefits” provisions

3.     Implement incremental Citizens eligibility reform with a “circuit breaker”

4.     Allow excess and surplus lines carriers to do voluntary take-outs from Citizens

5.     Remove non-primary residences from Citizens and continue reduction of Citizens’ maximum coverage

6.     Expand 2013’s coastal preservation concept to bar other state programs from providing coastal subsidizes

7.     Implement tough, new Citizens and Cat Fund conflict-of-interest policies and make protecting taxpayers a focus of both entities

8.     Create an expert panel to advise the state on the use of RESTORE Act funds

9.     Establish fair settlement procedures

10.   Require an annual report on the combined post-storm bonding capacity of Citizens, the Cat Fund and the Florida Insurance Guaranty Association

You will need quite a bit of time to review the report.  I found two of the recommendations intriguing and worth mentioning:

First, once again you see a group identifying the assignment of benefits claims as a main concern for property insurers.  As you might recall, the Policyholders Bill of Rights Working Group also made several recommendations for addressing the concerns posed by the assignment of benefits/ water damage claims and the associated litigation.  Similarly, the institutes recommend requiring assignment of benefits contractors to comply with the insurance policy conditions that homeowners have to comply with, rather than being shielded by the general rule that policy conditions do not flow to the contractors.  In addition, the institutes suggest allowing homeowners a brief window to opt out of the assignment of benefits agreements to protect the homeowners’ interests.  Overall, it seems that everyone is seriously trying to resolve the substantial burdens imposed by these claims.  I am sure insurers anxiously await to see how and when these efforts will materialize into solutions.

The institutes also recommend Citizens continue to limit its overall exposure, and they single out vacation homes as a coverage risk Citizens should avoid.  There are arguments on both sides here because Floridians obviously welcome the economic benefits of temporary residents; however, if Floridians have the burden associated with a catastrophe, the legislature should pay close attention to the overall economic impact of assuming these risks.  Ultimately, this issue is up for debate and I would love to hear feedback on the benefits of Citizens ensuring these secondary residences.  This recommendation was part of the larger conclusion that we have all heard: Citizens should continue to reduce its inventory.  We all know Citizens is vehemently trying to achieve that result.

The institutes’ report is a highly detailed perspective on the Florida property insurance industry and one certainly worth reading.  It is good to know that, despite the absence of any catastrophes, Floridians are still working on hard on trying to improve this market and prepare it for the worst.

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The Florida Policyholders Bill of Rights Working Group Issues its Final Report

Florida Homeowners Insurance Claims and Litigation Handbook

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As discussed this summer, Florida’s Insurance Consumer Advocate Robin Westcott organized a Bill of Rights Working Group to create a Bill of Rights for Florida’s insureds.  They addressed the following issues in great detail:

  • education, transparency, and monitoring the insurance marketplace;
  • improvements to the claim process;
  • assignment of benefits and emergency remediation companies;
  • examinations under oath;
  • alternative dispute resolution;
  • post-claim underwriting; and
  • coverage provided by repair rather than indemnity payments.

The final report is here:

Download (PDF, 2.16MB)

The Group wants the Bill of Rights to have a lasting impact.  For the parts of the Bill that reflect existing case law, they want the Bill to codify the existing case law into statutory law.  For the parts of the Bill that are not yet law, they want the Bill to make new law. Lastly, there is an educational component.  To help insureds navigate claims, they want insurers to provide insureds with a copy of the Bill when they file a claim.

The report is a great snapshot of today’s insurance industry concerns.  I think the Group did a great job of addressing the current landscape.  My only criticism is that I would have liked the Group to disclose, in the Bill, some of the data on these claims.  To get the new recommendations turned into law, the Group should disclose the data that proves these concerns are justified.  In all fairness, the Group might not have needed the data.  The Group was comprised of several insurance professionals with decades of experience.  Thus, they likely used their private data to form their conclusions and recommendations, even if they did not disclose it.

I think the Bill of Rights will be very helpful for insureds when navigating a claim; however, the Bill’s primary impact on insurers appears to be focused on the assignment of benefit-water extraction claims.  If the legislature adopted all the recommendations, AOB contractors will have some new obstacles to deal with, including licensing requirements; limitations to the scope of their AOB contracts; and compliance with certain standards for water extraction.

Aside from the AOB-related recommendations, the rest of the Bill codifies/creates obligations and limitations for insurers, including more standards for communicating during the claim and examination under oath process; prohibitions on post-claim underwriting; and expectations for insurers when they elect to repair.  Ultimately, some of these obligations are already existing law, and I bet most insurers already comply with the majority of the recommendations.

Only time will tell the impact of the Group and its recommendations. There is no doubt that they discussed a lot of major concerns.  We will wait and see what the legislature does with these recommendations. When that time arises, I will keep you posted.


The assignment of benefits issue is not going way, and its up to insurers to not let this be the next attorney-driven trend.

How can insurers deal with the assignment of benefits issue?  First, get the best management and attorneys together and decide exactly what to do on these cases. Second, pay for routine documents and evaluations only once, then automate any documents or processes that will occur in all of these cases.  Third, enter all of the case information into software (instead of Word documents and emails) so that you can use data to help guide you towards settlement.  Fourth, as failures and successes arise, continue to optimize your system to ensure you achieve the best possible outcomes while spending the least.

If you have any questions or would like to see checklists or guides for handling assignment of benefits cases, please message me.

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Assignment of Benefit Homeowner Insurance Claims and Bill of Rights Working Group (Video)

Florida AOB & Industry Litigation Trend Report Image

First Party Property Insurance Blog is Proud to Announce our New E-Book: the Florida Homeowners Insurance Claims and Litigation Handbook.

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

We’re so confident in this E-Book that we offer you a money-back guarantee if it does not have the information you and your insurance claims business needed to improve. Click the link below to buy copies for you, your colleagues, and your partners.

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At the Bill of Rights Working Group recent meeting, Mr. Dry Out‘s Matthew Jerabek explained his concerns with the AOB contractors in the water damage claim industry.  Below is the video of his statements to the Working Group.  To be safe, I cannot promise that his statements are true because I have zero personal knowledge regarding the allegations; however, I think anyone who handles these claims would want to have the opportunity to hear his statements.

The Video

Embedly Powered

Although this may lead some carriers to take approaches based on emotion, assignment of benefits cases are the perfect type of case for statistical data evaluations to drive decision making.  They are also the perfect type of case to use document automation and litigation project management to achieve better outcomes at a fraction of the costs.

Don’t hire attorneys to have junior associates get you nowhere on these files for thousands of dollars.  If you want checklists, guides, or legal document templates for handling claims like this one, please message me.


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Florida Homeowners Insurance Claims Update: The Corporate Representative’s Deposition Bill of Rights (And Wrongs) via Carlton Fields



This article is arguably the most popular article on the First Party Property Insurance Blog.

When a homeowner sues his homeowners insurer, his attorney often requests the insurer to have someone speak for the insurer on the record.  This is called the corporate representation deposition, and it could be the turning point in the case.  Read this article to learn the details.

If you read to the end, I will tell you about how to solve this issue.

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

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

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.


Have any questions about Florida’s homeowners insurers, policies, and claims, please feel free to contact us.

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I found a very interesting article today, and it gives me the opportunity to share my insight on the issues associated with corporate representative depositions of insurance companies.  I also want you to read all the way through the end of this article for my proposed solution to this issue.



For anyone who is involved in property insurance litigation, corporate representative depositions in breach of contract cases are a big hassle. Whether a sinkhole claim, long term water claim, or late notice claim, insured’s attorneys will eventually ask for this deposition. For the insured’s attorneys, they are a hassle because they want the deposition to happen as soon as they request it and on their terms; however, the insurer’s attorney will not allow it without limiting the deposition.The insured’s attorney wants someone to speak for the insurer so the attorney can ask why the insurer reached the conclusion it did.This sounds fair, right?

For the insurer’s attorney, however, the deposition is a burden because it requires the attorney to confer in good faith with the insured’s attorney to try to limit the scope of the deposition to what he or she believes is proper.What is proper is discussed in more detail below.In addition, the insurer’s attorney must file an objection and/or motion with the Court and argue it to have the Court understand that the deposition might cause irreparable harm by invading privileges.Further, the insurer’s attorney must go to great lengths to prepare the corporate representative for the hours of questioning that may ensue (see Testifying to the Facts of Someone Else’s Investigation).The insurer’s arguments: (a) the insured’s attorney already knows the answers to the questions asked and (b) if the insured’s attorney was so interested in discovering facts, then why didn’t he or she first ask for the depositions of those with personal knowledge, including the adjusters and experts?

The “Bill of Rights” article by Carlton Fields is great because it helps let us remember how burdensome the deposition is for the insurer.First, the insurer has to appoint an eloquent supervisor who has the general knowledge and experience to bind the corporation with his or her testimony.The representative must learn the entire claim file from its inception until the date of the deposition.This can involve review of hundreds to thousands of pages of EUO and deposition testimony, reports, photographs, estimates, and journal notes.In addition, the representative might be required to testify to facts as if the representative was the field adjuster, claim examiner, engineer, and contractor!There are at least two limits worth discussing at this point.Although the insured’s attorney might try to ask the corporate representative to “be a lawyer” and interpret policy provisions, the representative does not have to answer these types of questions. Corporate representatives also are not required to testify about coverage in general.

This article contains what the author dubs “the Corporate Representative’s Deposition Bill of Rights (and Wrongs).”As discussed by the author, this is not a very helpful set of rights for the insurer.Instead, it is more like a “Bill of Obligations.”The article is fantastic, however, because it cogently describes all of the effort that must go into the deposition.The “rights” are as follows:

1. You do not have the right to remain silent, meaning that you must know:

a. more than just the representative’s personal knowledge;

b. more than just one of the insurer’s department’s knowledge;

c. more than just the knowledge that the insurer has;

d. the knowledge of former employees;

e. information that arises from evidence in the case; and

f. information that takes an inordinate amount of time and effort to obtain information the insurer learned through its lawyers.

2. Anything you say can be held against you (or the corporation).

3. You have the right to an attorney.

4. You have the right to not be the person with the most knowledge of the claim.

5. You have the right to know the general scope of what will be asked at the deposition.

Wow!This does not sound like a “Bill of Rights” to me; however, it is a “Bill of Truth.”Regardless of how ominous this sounds, there are few limits on what an insured’s attorney can ask at a corporate representative’s deposition.

An insurer’s corporate representative’s deposition in a breach of contract case, however, is different from any other corporate representative’s deposition for a variety of reasons.With the proper preparation and, frankly, hard work, an insurer’s attorney can ensure that the corporate representative does not testify to what it should not testify to.In short, these limits are:

1. privileged information regarding claims handling;

2. privileged information regarding company-wide policies and procedures;

3. privileged communication between the insurer and its attorneys; and

4. legal interpretation of the insurance policy.

As much hard work is required to limit the deposition, the insurer’s attorney has to expend equally enough effort to prepare the corporate representative by promptly and thoroughly educating the representative about information known to the field adjuster, claim examiner, any engineers, any contractors, and, believe it or not, the lawyer.This sounds like a lot of effort, and it is.Nevertheless, if the insurer can conquer the corporate representative deposition, then the insurer will have shown the insured and, potentially, the jury, why the insurer reached the conclusion it did. As the voice of the insurer, the corporate representative has the opportunity to solidify the insurer’s defenses.


Corporate representative depositions should not be handled by emails and Word documents.  Stop it now.

Corporate representative depositions need to trigger a system of events to ensure homeowners insurers are protected.  The system should include “check the box” and “fill in the blank” tasks that homeowners and their attorneys determine to be necessary.  This shouldn’t be up for discussion, as all time should be focused on preparation, not evaluating what to do for the 1,000th time.

Corporate representative depositions should also trigger a set of automated legal documents to save clients thousands of dollars in legal fees.  This is a simple system.

If you are interested in learning more about our checklists and guides for handling corporate representative depositions, please message me.

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Did the Florida Supreme Court’s Decision in Geico v. Nunez Affect A Homeowners Insurer’s Right to an Examination Under Oath?


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

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

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.


Have any questions about Florida’s homeowners insurers, policies, and claims, please feel free to contact us.

On June 27, 2013, the Florida Supreme Court issued an opinion in Geico v. Nunez that appears to limit an insurer’s right to deny a claim based on an insured’s failure to comply with the examination under oath (“EUO”) provision.A more accurate interpretation, however, is that the Court opined that personal injury protection coverage (“PIP”) insurers cannot deny an insured’s claim based on a failure to submit to an EUO.

Download (PDF, 102KB)

In Geico, the insured was allegedly injured in a car accident on September 17, 2008.On October 26, 2009, Geico filed a declaratory action in a Florida trial court which was subsequently removed to federal court.Geico asked the court to determine whether the insured could obtain PIP benefits despite failing to submit to Geico’s requested EUO.Nunez argued in response that Geico’s position conflicted with Florida’s PIP statute, Fla. Stat. 627.736 (2008).The federal district court, finding no cases supporting Nunez’s position, held Geico was entitled to dismissal because Nunez failed to submit to the EUO. On appeal, the Eleventh Circuit “punted” the decision to the Florida Supreme Court.

from http://wklawyers.com/blog/wp-content/uploads/2011/11/florida_pip.gif

The Florida Supreme Court held in favor of Nunez, finding that Florida’s No-Fault statute was mandatory and the EUO provision was inconsistent with the statute’s purpose of promptly providing “virtually automatic” coverage for PIP claims.The Court further found the EUO provision was “unreasonable and unnecessary under Florida law.”The Court also determined the EUO provision was “invalid.”Accordingly, it appears that EUOs are no longer a condition precedent to PIP coverage.

Does this harsh language against insurers’ policy rights apply to property insurance claims?While the Court does not promise that property insurers are exempt from this holding, the Court does not disturb any property cases upholding an insurer’s right to demand an EUO.The Court also makes clear that this holding should be distinguished from cases that do not involve PIP claims.In other words, although the Court went to great lengths to say that its holding does not apply to any other type of claim at this time, the Court does not guarantee anything to property insurers.

The opinion seems to say that property insurers are exempt from its holding, however, expect insureds and their attorneys in property claims to make arguments similar to the one made by Nunez. Property insurance is not mandatory like PIP insurance, so the Court’s plain language should shield property insurers from its holding. Furthermore, because the Court limited its application to the PIP statutes, Florida law still holds that EUOs are still conditions precedent in property claims (depending on the jurisdiction).

In short, given that the Court did not disturb the holdings in all of the property cases cited in its opinion, I believe the Court has held that Nunez’s arguments will not suffice in the context of the property insurance claim.


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