This blog has previously addressed alternate dispute resolution (ADR) methods used to resolve insurance claims disputes, such as neutral evaluation and appraisal. Depending on the situation, either party to an insurance dispute might have strategic reasons to oppose these forms of ADR. The issue of when a party to an insurance dispute can be compelled to participate in the appraisal process is a subject of considerable litigation.
The recent appellate case out of Florida’s 5th District provides an example of the arguments that homeowners insurance companies often use to oppose the appraisal process. In Florida Insurance Guaranty Association (FIGA) v. Sill, the policyholders had their sinkhole claim denied by their insurance company, HomeWise. The policyholders filed a breach of contract lawsuit against their insurance company in December 2010. The lawsuit was stayed in December 2011 following HomeWise’s insolvency and activation of FIGA. The stay lasted until May 2012 after FIGA had been substituted into the lawsuit as a defendant.
The court extended the stay in October 2012 after granting FIGA’s request for a neutral evaluation. The evaluator determined that sinkhole activity could not be ruled out as a cause of the policyholders’ loss and indicated certain subsurface repairs were appropriate. FIGA eventually acknowledged coverage for the sinkhole damage on April 15, 2013 via written correspondence. The policyholders replied to this correspondence by demanding appraisal. The trial court granted the policyholders’ motion to compel appraisal, and the insurer appealed the order mandating appraisal on multiple grounds.
As its first argument against appraisal, FIGA contended that appraisal was improper because the issue to be decided was the manner of repair rather than the value of the loss. The court gave short shrift to this contention because the court’s prior decision in FIGA v. Branco rejected essentially the same argument. In essence, the Branco court reasoned that identifying the method of repair was part and parcel to determining the value of the claim.
The insurance carrier then contended that the insured waived any right to appraisal by engaging in litigation activity from the time of the loss until the request for appraisal. The court noted that its past decisions established that neither the passage of time nor a specific number of litigation actions necessarily constitute a waiver. Because there was no dispute of the facts that the insured requested appraisal only a month after the insurer acknowledged coverage, the policyholders had not allowed the lapse of time or significant litigation activities to constitute such a waiver. The court observed that a waiver of appraisal rights is appropriate in the context of an insurance dispute if the party seeking to compel appraisal has engaged in conduct inconsistent with the right of appraisal. A single month with no significant litigation activity did not come close to meeting this standard.
Finally, FIGA contended that the trial court should have conducted an evidentiary hearing prior to granting the order to compel appraisal. While the court conceded that under certain circumstances an evidentiary hearing might be appropriate to determine whether the conduct of a party constitutes a waiver of appraisal, the court determined such a hearing was unnecessary when the undisputed facts of the case make it clear that no waiver had occurred.
If you have questions about Miami-Dade homeowners insurance claims, you are welcome to contact our experienced Miami homeowners insurance attorneys. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.