Tag Archives: Sinkhole Lawsuits

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

Florida Homeowners Insurance Claims and Litigation Handbook

Overview:

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.

Takeaway:

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.


Did this answer your Florida homeowners insurance claim question?

If not, please contact us.

Florida Homeowners Insurance Questions, the Loss Settlement Provision, and When is Alleged Underpayment Not a Breach of the Policy?

cover3

Overview

The Loss Settlement provision is, without a doubt, the most overlooked homeowners insurance policy provision.  There are tens of thousands of lawsuits filed every year where the parties dispute what the homeowners insurer owes to the homeowner.

Do you want to know what neither side probably looked at?  The Loss Settlement provision – the provision that actually describes the homeowners insurer’s obligation to pay a claim.  Read this article to learn more about how this provision could decide your case.

Make sure to read until the end because we offer you a free Litigation Report analyzing the ways to improve your case outcomes while paying the least amount possible.


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.

Questions?

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


One of the most important questions in property insurance litigation is whether an insurer can obtain a summary judgment in a damages dispute. Stated otherwise, can an insurer prevail on a summary judgment motion when the insured alleges the insurer underpaid the claim? You might ask, “how is that possible?” How can an insurer and the Judge agree that even if the insurer allegedly underpaid the insured, the insurer did not breach the contract? If you can answer these questions, then you understand the difference between underpayment and breach.

ins c

To understand the answers to these questions, you must examine the Florida cases discussing loss settlement provisions. Following are some examples:

 

1. Slayton v. Universal

Download (PDF, 13KB)

Slayton holds that even if an insured allegedly underpaid pursuant to the policy, the insurer could have simultaneously complied with its policy obligations as a matter of law. While Slayton is limited to the facts and statutes at issue in the case, its rationale may be applied to any insurance dispute.

Rather than promote litigation, judges should do what Slayton did and allow the insurer to rely on the insured to present a genuine policy dispute before bringing a lawsuit. In Slayton, the Court held that the insured should have used the benefits the insurer paid to the insurer to repair the home and then submit a supplemental claim to the insurer if the original payment was insufficient. Instead, the insured sued the insurer without attempting to conduct the repairs with the payments provided by the insurer. Ultimately, in Slayton, the Fifth DCA upheld the trial court’s finding that the insurer, by providing the payment to the insured, complied with the policy as a matter of law.

By enforcing the loss settlement provision’s requirements, the Fifth DCA in Slayton held that the insurer did not breach the contract, even if it arguably underpaid the claim.

 

2. Ceballo v. Citizens

Download (PDF, 46KB)

In Ceballo, the insureds alleged that they proved a total loss of Ordinance and Law coverage pursuant to the Valued Policy Law statute and argued the insurer should have paid the coverage. The insureds further claimed that the insurer’s failure to pay the coverage constituted a breach of the contract. The insurer responded that before the insureds could be entitled to this coverage, the policy required the insureds to incur Ordinance and Law damages. To put this into context, the policy and statute at issue in Ceballo provides that the insureds were not entitled to replacement cost coverage until they incurred the damages. Like the Fifth DCA in Slayton, Florida’s Supreme Court in Ceballo determined that the insurer did not breach the contract despite the insureds’ allegations that the insurer underpaid. Thus, the insureds could not present a damages dispute to the jury, and the insurer was therefore entitled to judgment in its favor on that issue.

 

3. Buckley Towers v. Citizens

Download (PDF, 96KB)

Likewise, the Eleventh Circuit in Buckley Towers considered the lower court’s finding that the insured was excused from incurring damages under the policy. Similar to the policy at issue in Ceballo, the policy at issue in Buckley Towers provided that if in insured wants replacement cost coverage, it must incur the damages. If the insured does not incur the damages, the insured can only obtain actual cash value. Despite this policy requirement, the lower court held that the insurer’s alleged underpayment excused the insured’s performance in that regard.

The Eleventh Circuit Court of Appeals reversed, determining that the insured could not use the prevention of performance doctrine to avoid a requirement that the damages be incurred. Unlike the lower court, the Eleventh Circuit refused to “rewrite the policy.” The Eleventh Circuit held that the insured was required to make the repairs before he or she would be entitled to the replacement cost coverage. In other words, until the repairs were complete, the insurer was correct in issuing only the coverage for actual cash value. The court found that by using the prevention of performance doctrine, the lower court impermissibly rewrote the policy that was freely negotiated between the parties. Even when facing allegations of underpayment, the Eleventh Circuit determined the insurer did not breach as a matter of law. In short, Buckley Towers, like Ceballo and Slayton, shows that courts must adhere to the loss settlement provisions in a policy.

So what do these cases tell you?

First and foremost, beware when relying heavily on the black letter law in these cases because the statutes and policy forms have changed. Instead of focusing on the holdings of these cases, focus on the courts’ interpretations of the loss settlement provisions. In each case, the court determined that the insureds were not entitled to a trial on damages until they demonstrated compliance with the loss settlement provisions. Second, you must scrutinize your loss settlement provisions, whether you are dealing with a sinkhole claim, water claim, or tile claim, before accepting the opposing party’s allegations as fact. Ultimately, the loss settlement provision may make alleged underpayment a question for the judge and not the jury.

 Takeaway:

You shouldn’t allow your attorneys to overlook this provision, and you should have systems in place to make sure it isn’t overlooked.  Your provision is the same in every case, but it needs to be read in light of the case law.

Don’t trust this type of issue to junior associates.  Get your best management and best attorneys together, create a system for ensuring compliance, and never think about it again.

If you want checklists, guides, and legal document templates on the Loss Settlement provision, please message me.


Did this Article Answer Your Homeowners Insurance Question?

If not, contact us.

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

cover3

Overview

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.

Questions?

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



contract 3

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.

http://www.carltonfields.com/the-corporate-representatives-deposition-bill-of-rights-and-wrongs-03-16-2012/

http://www.calbizlit.com/.a/6a00d83451e4e569e2017d3c23c8a4970c-800wi


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.

Takeaway:

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.


Did this Article Answer Your Homeowners Insurance Question?

If not, contact us.

Testifying to the Facts of Someone Else’s Investigation

Florida Homeowners Insurance Claims and Litigation Handbook

A very informative article on Examinations Under Oath (“EUOs”) appears in the summer 2013 edition of Litigation Management. The article, written by Tower Hill’s Lincoln LeVarge and Butler Pappas’s Gerald Albrecht, can be accessed here:

http://www.litigationmanagementmagazine.com/litigationmanagementmagazine/summer_2013#pg1

The most interesting takeaway from the article that I want to emphasize is that insurers may have to submit representatives to testify about facts that attorneys obtain through the EUO process, especially if the insurer relies on those facts to issue a coverage determination.

This consequence of the EUO process is often overlooked. As you know, an insurer often retains an attorney to conduct to an EUO and relies on the information obtained during the EUO. If the case proceeds to litigation, the insured’s attorney will typically request that the insurer produce representatives to testify regarding how the EUOs led to coverage determinations, regardless of the insurers’ representatives’ level of involvement in the EUOs and without providing privileged information. A representative who can demonstrate active involvement in the coverage determination, as well as a strong grasp of the EUO results, will present well during the deposition and to a jury.

A similar situation is when insurers retain experts to investigate claims during the coverage stage. Often, expert reports are so detailed that claim examiners do not confirm the findings with the expert. If the case proceeds to litigation, however, an insured’s attorney will try to determine to what extent the insurer relied on the expert. Indeed, when an insured’s attorney conducts the deposition of the claims examiner, the attorney will typically ask about every fact surrounding the coverage process, including whether the representative called the expert to inquire about the report. Like the EUO process, if a claims examiner can testify that he or she spoke with the expert about the report, then the insurer’s reliance on the expert will be more credible. This is true for long term water claims, sinkhole claims, and, most importantly, late notice cases.

These are simple but helpful points to think about. Of course, insurers are entitled to a variety of privileges against disclosure of certain aspects of the coverage process, and I will discuss that in great detail in future posts. Privileges aside, all parties involved in a coverage investigation should still be aware that someone may ultimately have to testify testify to the facts supporting the defenses. If those facts involve an insurer’s reliance on his or her attorney and expert, then a claims representative should try to be able to testify why such reliance was reasonable.


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.

Questions?

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

 

Florida Homeowners Insurance Litigation Update: Tampa Sinkhole Insurance Claims: Verdict Forms in Sinkhole Trials

Overview:

Check out one of the most popular articles on homeowners insurance litigation there is.  Thousands of people make a living on homeowners insurance claims, but only a small percentage of them understand why homeowners were so successful at litigating these claims.  Although these claims are dwindling, many lessons can be learned for the next wave of insurance claims.

Make sure to read to the end of this article so you can apply for our free Litigation Report.  By giving us that moment of your time, you will receive a free comprehensive analysis and sets of solutions to bring you power and control over your homeowners insurance litigation cases.


Getting Started

New to the First Party Property Insurance Blog? Take five minutes to find the answers to your insurance questions by clicking here.


tech 5

Good morning. I recently spoke with mediator, Robert Daisley, about the current state of sinkhole litigation. Rob is one of the most well respected mediators in Tampa. He is a great mediator because he emphasizes the uncertainties for the parties.

Rob has a strong grasp on the issues and uncertainties in sinkhole cases. Even when the insurer has done everything right in terms of payment and timeliness, Rob is not sure that the insurer will prevail. Why? Because there has been no direct appellate mandate on the proper jury instructions and verdict forms in sinkhole cases. Experienced trial lawyers start their evaluation of a case by crafting their jury instructions. As Rob suggested and as anyone who has handled sinkhole cases should know, judges are far from uniform in agreeing to jury instructions.

While there is plenty of appellate guidance on the issue, that guidance has been twisted and turned into a wide range of jury instructions and verdict forms. Thus, according to Rob, unless a party is prepared to pay its attorneys to litigate at the trial and appellate level, then that party is better off settling the case. The bottom line: knowing how many variations of jury instructions and verdict forms have been issued by the courts, you must be committed to both the trial and appeal to make sure that the court used the right verdict form.

The most critical variation at this time is the burden of proof in a denied sinkhole case. Some judges place the burden of proof on the homeowners to prove sinkhole activity caused the damage, while other judges require the insurers to prove the exclusions caused the damage. This issue is on appeal right now, however, we are months away from a ruling. Rob’s point here is unless you are committed to appealing a problematic verdict form, then trying the case might not be for you.

Another variation in the jury instructions is determining if the verdict form should be limited solely to whether the claim was allegedly underpaid. Some believe the verdict form should consider an insurer’s compliance with the policy and statutes. Others believe the verdict form should should only ask whether the claim was underpaid.

Rob believes that if a party is not committed to trying and appealing these issues, then the party runs the risk of trying the case with unfavorable jury instructions. The following set of verdict forms (check the variations) support his position:

Download (PDF, 102KB)

Download (PDF, 96KB)

Download (PDF, 31KB)

Download (PDF, 87KB)

Download (PDF, 94KB)

Download (PDF, 131KB)

Download (PDF, 84KB)

Download (PDF, 73KB)

Download (PDF, 72KB)

Download (PDF, 137KB)

Download (PDF, 131KB)

Download (PDF, 414KB)

Download (PDF, 35KB)

Download (PDF, 12KB)

The inconsistencies in these forms are glaring, and insurers and homeowners alike should hope that the Second DCA narrows the issues in an effort to eliminate these inconsistencies. While many lawyers seem to believe they can prevail despite the verdict form, properly framed questions for the jury to answer are crucial. Kudos to Rob Daisley for stressing how these issues should impact insurers’ and homeowners’ outlooks on trying the cases.

So what went wrong here?  

There’s only one way to find out, by contacting me and subscribing to First Party Property Insurance Blog.

Takeaway:

If you want the legal forms and checklists to make your desired jury forms a reality, please message me.


Did this Article Answer Your Homeowners Insurance Question?

If not, then go to our Getting Started page by clicking here, where we have a guide with easy-to-find links to the laws, cases, and articles that will answer your question, or contact me.

Name (required)

Email (required)

Phone Number

Comment

captcha

Does a Defense Based on an Insured’s Failure to Submit to an Examination Under Oath Require the Insurer to Show Prejudice?

Florida Homeowners Insurance Claims and Litigation Handbook

fire 3

*April 30, 2014 Update: I want you to read this article because it has the best explanation of the hotly debated condition precedent vs. condition subsequent issue on this site; however, when you are finished, you need to read this article to learn about the latest developments from courts evaluating what type of condition the EUO provision is.*

If an EUO does not happen, can the insurer move for summary judgment and get an order by simply showing that the insurer requested the EUO and it did not happen? In other words, can an insurer obtain a summary judgment on that issue without pleading and proving prejudice? Yes and no, depending on where in Florida you live.

picture from http://www.florida-lawblog.com/2010/05/examination-under-oath-euo.html

The Fifth DCA is the DCA making some waves. While old news, the Fifth DCA in State Farm Ins. Co. v. Curran held that a failure to appear at a compulsory medical examination was a breach, but maybe not a material breach because the insurer did not plead and prove prejudice. 83 So. 3d 793 (Fla. 5th DCA 2011). Following that decision, the Fifth DCA issued another opinion denying an insurer summary judgment based on an insured’s alleged failure to submit to an EUO. Whistler’s Park, Inc. v. FIGA, 90 So. 3d 841 (Fla. 5th DCA 2012). In Whistler’s Park, Inc., the Fifth DCA considered the insured’s arguments that it responded to the insurer’s EUO request by naming a corporate representative to testify at the EUO and promising to produce the documents. The insurer had previously asked the insured to call the insurer to schedule the EUO. Leading up to the summary judgment hearing, the insured continued to offer to submit to the EUO, but did not call to schedule. The Fifth DCA once again held that the insurer’s failure to plead and prove prejudice thwarted its ability to obtain summary judgment on the EUO provision, which they called a condition subsequent. The Fifth DCA said that to show a breach of a condition subsequent was material, the insurer needs to plead and prove prejudice. So we know where the Fifth DCA stands: an insurer must plead and prove prejudice.

No other DCA has expressly taken this position. The Third DCA, however, has denied an insurer’s motion for summary judgment on the issue when counsel for the insurer asked improper questions to an insured that the insured refused to answer. De Leon v. Great American Assur. Co., 78 So. 3d 585 (Fla. 3d DCA 2011).

The Fourth, Fifth, and Second DCAs all have opinions suggesting there is no need to plead and prove prejudice. The Fourth DCA’s decision in Goldman v. State Farm suggests that an insurer does not need to plead prejudice to obtain summary judgment in that jurisdiction. 660 So. 2d 300 (Fla. 4th DCA 1995). However, the Fifth DCA in Curran suggested that a portion of the Goldman decision considered the prejudice issue when it discussed how remanding the case to proceed with the EUO would be fruitless because two years had passed since commencement of the suit. Insurers often point to two other decisions suggesting that prejudice does not need to be pled and proven to obtain summary judgment in the Second and Fifth DCAs. See Amica Mutual Ins. Co. v. Drummond, 970 So. 2d 456 (Fla. 2d DCA 2007); Starling v. Allstate Floridian Ins. Co., 956 So. 2d 511 (Fla. 5th DCA 2007).

So the answer to the question posed is, once again, that it appears to depend on the jurisdiction. In November of 2012, the Florida Supreme Court heard oral arguments in Curran. I am not sure when to expect the Florida Supreme Court to issue the order but hopefully it will shed some light on whether the Fifth DCA is right, or whether the issue will return to a bright line rule. Until the Supreme Court issues its opinion, it might be best to plead and prove prejudice just to be safe.

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.

Questions?

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

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

Getting Started

New to the First Party Property Insurance Blog? Take five minutes to find the answers to your insurance questions by clicking here.

banner8

Sponsor the First Party Property Insurance Blog

banner5

banner2

Its important to note that we are looking for sponsors and guest contributors interested in getting exposure to our thousands of loyal readers and subscribers.

Do you want your company’s name sent to the inbox of insurance company executives and adjusters, sent to thousands of attorneys, and shared with all of the largest insurance consulting companies?

Of course you do. Reach out to us and we can tell you how to reach the tens of thousands of people in the First Party Property Insurance Blog Community.

*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

 

Takeaway:

Do you want forms and checklists to streamline the process of obtaining these results?  If so, message me today.

Did this Article Answer Your Homeowners Insurance Question?

If not, then go to our Getting Started page by clicking here, where we have a guide with easy-to-find links to the laws, cases, and articles that will answer your question, or contact me.

The “Residence Premises” Defense in Florida Homeowners Insurance Litigation

Overview:

Do you want to know about a defense that Todd Legal, P.A. has helped create – the residence premises defense?  Do you want to know what steps you need to take to evaluate whether a homeowner must reside at the property to have coverage for a homeowners insurance claim?  Read this article, and make sure to read to the end to take advantage of our free Litigation Report offer.

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 image of the E-Book now to buy it for your friends and clients today.


Add to CartView Cart

home 2

*April 30, 2014 Update: this has been one of the most popular posts on the blog and for good reason.  I have heard about many carriers having success with this defense, and a case I handled resulted in a complete defense result in the Second DCA.  

Make sure to read all the way to the end of this post to learn how I propose making sure carriers efficiently guarantee they do not fail to use this defense in any case they have.*

For HO-3 policies, insureds must reside at their property to have coverage for damage to their home; however, I am surprised to find out that not everyone knows about this coverage defense. The defense stems from the typical HO-3 policy’s definition of “residence premises,” and the clause in the building coverages portion of the policy that explains what the insurer covers.

For a property to be a “residence premises,” it must be the property where the insured resides and the property shown in the declarations pages. See Harrington v. Citizens Property Ins. Corp., 54 So. 3d 999 (Fla. 4th DCA 2010). Although the Fourth DCA in Harrington focused on the impact of the definition of an “insured location,” the Court undoubtedly held that the definition of “residence premises” requires the insured to reside at the property. Since 1983, Georgia courts have held that the defense bars coverage for property damage. See Georgia Farm Bureau Mut. Ins. Co. v. Kephart, 439 S.E. 2d 682. New York’s courts have also enforced the defense. See Marshall v. Tower Ins. C. of New York, 44 A.D. 3d 1014 (2007). Further, the Michigan Supreme Court has upheld the use of the defense. Heniser v. Frankenmuth Mut. Ins. Co., 534 S.W. 2d 502 (Mich. 1995).

Although I have not seen any Florida appellate courts rule on the exact issue of the “residence premises” definition precluding coverage for property damage to a rental or unoccupied property, the Harrington case suggests the Florida DCAs would enforce the defense. In fact, every trial court I am aware of has ruled in favor of the insurer when presented with the issue. In addition, it is important to note that insurers have strong arguments that, because the property description is an essential part of the policy’s coverage grants, this is not a defense that an insurer can waive.

Reacting to the Florida appellate authority unfavorable to insurers on the vacancy exclusion, many insurers backed off from evaluating whether insureds needed to reside at a property for there to be coverage. With the trial court momentum in the insurers’ favor, the defense is certainly worth considering and evaluating as early as possible.

*April 30, 2014 Update: Want to Guarantee You Never Miss this Defense Again? Hire Todd Legal, P.A.*

How can you make sure that every adjuster and every attorney past, present, and future check to see if the insured resided at the property? 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 the plaintiff resided at the property, and you have to go no further than two clicks online to find the answer for your specific case.  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.

Takeaway:

If you want legal forms, templates, guides, and checklists to ensure you “check the box” on properly handling a resident premises claim (and save money along the way), please message me.

If this article did not answer your Florida homeowners insurance claims question, contact us now.

Florida Courts on the Prompt Notice Provision in Homeowners Hurricane Insurance Claims

Overview:

When is it too late to submit an insurance claim for damage to your property?  What examples have homeowners and homeowners insurers learned from?  Where can we look to for guidance when a complicated set of facts leads to some confusion about when a hurricane insurance claim (or other claims) needs to be reported to the insurance company?  Find out these answers and more by reading this article.

First Party Property Insurance Blog is Proud to Announce our New E-Book: the 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 image of the E-Book now to buy it for your friends and clients today.


Add to CartView Cart

ins b

*April 30, 2014 Update: this has been one of the most popular posts on the blog and for good reason.  

I have heard about many carriers having success with this defense, and I have been happy to help them obtain these results.  

Click here to see all of the late notice cases that came out since this post.  

Make sure to read all the way to the end of this post to learn how I propose making sure carriers cheaply guarantee they do not fail to use this defense in any case they have.*

In the past year, the “prompt notice” provision has been the subject of many detailed Florida decisions. As mentioned in yesterday’s post, in Yacht Club v. Lexington the federal court out of Florida’s Southern District made a strong statement by recently holding that, as a matter of law, an insured could not overcome the presumption of prejudice if the accuracy of the insurer’s investigation was jeopardized in any way by the late notice.

As discussed below, after determining the notice was late, the Florida courts spend most of their energy evaluating the evidence to assess whether the insured has anyone willing to say that the delay did not inhibit the insurer in any way from determining the cause of the damage. The common theme is that if that insured’s witness “sticks to his or her story,” Florida courts could hold that a jury issue exists. If the witness shows any doubt during his or her deposition or in the affidavit, then the courts are willing to grant summary judgment.

Below I have outlined the key facts from some of the more recent, relevant holdings.

July 18, 2012

Kramer v. State Farm, 95 So. 3d 303 (Fla. 4th DCA 2012)

Holding: there was no issue of fact as to whether the insurer was prejudiced by the timing of the notice given by the insureds.

Delay: almost 5 years; the dates of loss were the dates of Hurricanes Frances and Jeanne in September of 2004, and a roof leak in 2008, and the insureds did not report the claim until May of 2009.

Evidence failing to overcome summary judgment: an affidavit from the insureds’ engineer stating that the insurer’s expert could determine the cause of the damage, that wind damage and foot traffic were “equally likely” to have caused the damage, and that resetting of tiles prior to the engineer’s inspection did not allow the engineer to assess the full extent of the damages. The Court found that the engineer’s affidavits actually bolstered the insurer’s prejudice argument.

July 25, 2012

Soronson v. State Farm, 96 So. 3d 949 (Fla. 4th DCA 2012)

Holding: there was no issue of fact as to whether the insurer was prejudiced by the timing of the notice given by the insureds.

Delay: approximately 3.5 years; the date of loss was the date of Hurricane Wilma on October 24, 2005, and the insureds did not report the claim until February of 2009.

Evidence failing to overcome summary judgment: an affidavit from the insureds with attached, unsworn engineer reports arguing that they did not make repairs and there have not been any windstorm events since Hurricane Wilma; therefore, the damage had to be caused by Wilma and the roof needed to be repaired in 2005 regardless of what occurred after.

September 7, 2012

Stark v. State Farm Florida Ins. Co., 95 So. 3d 285 (Fla. 4th DCA 2012)

Holding: there was no issue of fact as to whether the insurer was prejudiced by the timing of the notice given by the insureds.

Delay: approximately 3.5 years; the date of loss was the date of Hurricane Wilma on October 24, 2005, and the insureds did not report the claim until March 9, 2009.

Evidence overcoming summary judgment: an affidavit from the insureds’ engineer identifying the ability to, after the report date, determine the cause of loss, and an affidavit from the insureds’ public adjuster stating that the insurer’s adjuster commented that he could identify the cause of the damage.

October 3, 2012

Slominski v. Citizens Property Insurance Corporation, 99 So. 3d 973 (Fla. 4th DCA 2012)

Holding: there was no issue of fact as to whether the insurer was prejudiced by the timing of the notice given by the insureds.

Delay: approximately 3.5 years; the date of loss was the date of Hurricane Wilma on October 24, 2005.

Evidence failing to overcome summary judgment: an affidavit and deposition testimony from the insureds’ contractor stating that he could not be “100% sure” that the wind damage was caused by Wilma as opposed to Hurricane Frances in 2004, and that there was no way to differentiate water damage from one hurricane versus the other. Additionally, the insureds’ engineer had contradictory statements in his testimony versus his affidavit regarding whether he could determine when the staining and roof damage occurred. Ultimately, although the affidavits were similar to the Stark affidavits that supported the 4th DCA’s finding of a question of fact, the deposition testimony by the contractor and engineer contradicted the affidavits and, therefore, could not provide an evidentiary basis to overcome summary judgment.

April 3, 2013

1500 Coral Towers v. Citizens Property Insurance Corporation, 2013 WL 1316416 (Fla. 3d DCA 2013)

Holding: there was no issue of fact as to whether the insurer was prejudiced by the timing of the notice given by the insureds.

Delay: approximately 5 years; the date of loss was the date of Hurricane Wilma on October 24, 2005, and the insured reported the claim on June 29, 2010.

Evidence failing to overcome summary judgment: according to the Court, the closest the insured came to presenting supporting evidence was one of its engineer’s conclusory statements that the late notice did not prejudice the insurer.

Conclusion

With the hurricane claims gone for now, one question is how this applies to other types of claims. I am particularly interested in how these cases apply to claims for sinkhole damage. If an insured reports a sinkhole claim with a date of loss of two years prior to the report date and does not provide any photographs or corroborating witnesses, is there any way for an insurer to hire an expert to make an independent determination as to whether the damage existed during the claimed policy period? The answer is no, and I think this is one of the biggest issues facing Florida insurers today. If the policy coverages have changed since the date of loss (as they often have as a result of the changes to the sinkhole statutes), then isn’t the insurer prejudiced because it could not independently verify which type of coverage applied? The insurer might have had to offer coverage for cracking if the date of loss occurred, say, in 2010, but in 2012 the insurer’s policy might only provide coverage for substantial impairment of the load bearing portions of the property.

Takeaway:

If you want legal forms, templates, guides, and checklists to ensure you “check the box” on properly handling a late notice claim (and save money along the way), please message me.

Did this Article Answer Your Homeowners Insurance Question?

If not, please contact us.

New Late Notice Case

Getting Started

New to the First Party Property Insurance Blog? Take five minutes to find the answers to your insurance questions by clicking here.

*April 30, 2014 Update: Click here to see all of the late notice cases that came out since this post.*

In Yacht Club on the Intracoastal Condominium Association, Inc. v. Lexington Ins. Co., the Southern District of Florida looked at a few important late notice issues and determined that the insured breached the prompt notice provision as a matter of law.

The insured filed the claim for Hurricane Wilma damages arising on October 24, 2005. The insured argued that it waited to report the claim because it did not understand the extent of the damages until they later manifested. The insured reported the claim on May 21, 2010.

As indicated above, the insured argued that it did not realize the extent of the damages until they later manifested. Consistent with several cases rejecting that argument, the Court did not allow this argument to preclude a summary judgment finding that the insured’s notice was not prompt.

Then came the real issue that has been going different directions in the local Florida DCAs: whether the insured could present a fact issue as to whether it could overcome the presumption of prejudice. The insured presented evidence that its expert could determine that the hurricane caused the damage. Furthermore, the insured presented evidence that even the insurer’s experts issued some conclusions about the damage. Putting them together, the insured argued that the jury should decide whether this evidence is enough to overcome the presumption of prejudice.

The Southern District granted summary judgment for the insurer as a matter of law. The Court acknowledged that some experts reached some conclusions; however, the Court granted summary judgment because the experts undoubtedly would have been able to reach more accurate conclusions if the insured would have promptly reported the damage.

The rationale is powerful and correctly explains why these issues should be for the Court rather than the jury. Simply presenting expert opinions that some conclusions can be drawn should not destroy an insurance company’s right to have a claim reported quicker than 4 and a half years after the hurricane.

Did this Article Answer Your Homeowners Insurance Question?

If not, then go to our Getting Started page by clicking here, where we have a guide with easy-to-find links to the laws, cases, and articles that will answer your question, or contact me.

Name (required)

Email (required)

Phone Number

Comment

captcha

Recent Entries »