Court Erred In Denying Appraisal & Appraisal Premature For Items Not Yet Adjusted

In American Capital Assurance Corporation v. Courtney Meadows Apartment, L.L.P. (1D09-2940), the First District agreed both with the insurance company on appeal and the insured on cross-appeal.  The court stated:

the insurer argues the trial court erred in denying a portion of its motion to compel appraisal because its demand was untimely. The insured argues on cross-appeal that the trial court erred in granting appraisal of four items that had not been adjusted. We agree with both parties and reverse and remand.

The facts were described as follows:

On June 1, 2008, a microburst hail storm caused damage to the complex, after which the insured filed a claim. In July 2008, the parties met to discuss the extent of damage to the complex. The insurer believed a majority of the complex’s damaged roofs could be repaired, but the insured believed the same needed replacing.

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In a November 18, 2008, letter to the insured, the insurer demanded appraisal. On December 23, 2008, the insured filed a complaint, which was subsequently amended, seeking declaratory relief and alleging numerous breaches of contract. The insurer in turn moved to dismiss and/or abate the action and to compel appraisal, arguing that it had properly invoked the appraisal process under the terms of the policy.

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The trial court agreed that the appraisal demand was untimely, finding that, when an insurer admits liability and coverage for loss, formal proof of loss is waived and the time in which the insurer is required to demand appraisal under the terms of the policy begins to run from its admittance of liability and coverage....The trial court further found sections E.4.a.(3) and E.4.c. of the policy required the insurer to notify the insured of its intention to seek appraisal within 30 days after this date, such that the insurer’s November 18, 2008, demand for appraisal was untimely. Accordingly, the trial court denied the motion to compel appraisal of the items included the final estimate, but granted the motion to compel appraisal of the additional items of loss in the insured’s November 11, 2008, correspondence (the trash compactor area, the garage fascia, pillar damage, and interior apartment damage).

The First District reversed the trial court and held:

The underlying insurance policy does not set forth a time limit for demanding appraisal....There is no indication that this provision extends to the time in which the insurer must demand appraisal....The instant case is distinguishable because there is no language in the policy that requires appraisal to be invoked, if at all, within any set time from receiving or waiving the sworn proof of loss. Thus, under the terms of the instant policy, the insurer’s demand for appraisal was not untimely. Furthermore, the insurer has not waived its right to appraisal as it has not acted inconsistently with that right from the time of demand....Accordingly, because the insurance contract provided for appraisal, the insurer’s demand for such was not untimely, and the insurer did not waive its right to appraisal, the trial court erred in partially denying the motion to compel appraisal.

Additionally, because appraisal is premature if a portion of a claim had not been previously adjusted, the court reversed the portion of the order requiring appraisal of previously unclaimed items.  The court stated:

Furthermore, granting appraisal of the items of loss in the insured’s cross-appeal was premature as those items had yet to be adjusted. Without adjustment, it is impossible to know whether the parties disputed the amount of loss to warrant appraisal. See United States Fidelity & Guar. Co. v. Romay, 744 So. 2d 467, 469-70 (Fla. 3d DCA 1999).

The briefs filed in the First District can be viewed at the links below:

*Initial Brief;
*Answer Brief;
*Reply Brief.