Florida’s Second DCA recently answered an important question in Florida sinkhole homeowners insurance litigation: if (1) a homeowner has a competing engineering report it obtains after an insurer denies a sinkhole claim and (2) the insurer does not request the report, the homeowner is not required to produce the report before filing a lawsuit.
In a concise opinion embedded at the end of this post, Florida’s Second DCA in Herrera v. Tower Hill determined that the insureds were not required to produce their competing engineering report prior to filing their lawsuit against Tower Hill. In summary, Tower Hill argued that the insureds’ failure to produce the report constituted a breach of the “concealment or fraud” and the “duties after loss” provisions.
Tower Hill argued that the insureds, before filing the lawsuit, should be required to to produce the report to Tower Hill. If the insureds would have produced the report, Tower Hill could have evaluated the report and the parties could have avoided the litigation altogether. The trial court granted Tower Hill’s motion for summary judgment on these arguments.
The Second DCA reversed the trial court’s finding in favor of Tower Hill. The Second DCA explained that “[t]hese conditions apply where the insurer admits liability but disputes the recovery amount. See Tower Hill Select Ins. Co. v. McKee, 39 Fla. L. Weekly D1756, at *1. The policy did not require the Herreras to give the Geohazards report to Tower Hill unless they had the report at the time of the claim, but before Tower Hill denied it. See Surrett v. First Liberty Ins. Co., No. 8:11-cv-60-T-23MAP, 2011 WL 3879515, at *2 (M.D. Fla. Sept. 2, 2011).”
This is a very popular argument for insurers; however, the Second DCA did not agree that it applied to this specific set of facts. Interestingly, the Second DCA may have “left the door open” to this argument: if Tower Hill would have requested the report at some point after it was created, the policy may have required the insureds to produce the report before the lawsuit. That’s not exactly what the opinion states; however, you have to assume the Second DCA mentioned that fact for a reason.
In addition, Tower Hill’s arguement may still provide it with a defense to the insureds’ attorney’s fees as discussed here in our analysis of Omega v. Johnson.
This is one of several key sinkhole homeowners insurance opinions in the last couple of months. If you missed the last three, you can read them here:
Omega v. Johnson
Contract for Repairs Argument Upheld
2011 Statutory Structural Damage Definition Applies to Policies Issued After Senate Bill 408’s Effective Date
As a reminder, we have the complete Herrera v. Tower Hill order embedded at the end of this post.
Let me know your thoughts on this opinion and feel free to send me a message.
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The Complete Order in Herrera v. Tower Hill
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