Ezequiel Lugo and Sarah Lahlou-Amine weigh in on “Common Issues In Insurance Appraisal Non-Final Appeals”.
Hurricane Irma left billions of dollars in damages across Florida. Like after past hurricanes, disputes between policyholders and insurers about the amounts of loss will ensue. Many of these disputes will be resolved through the “appraisal” process.[1] But when either party disputes whether appraisal should proceed, Florida Rule of Appellate Procedure 9.130(a)(3)(C)(iv) will allow interlocutory appeals of non-final orders that determine a party’s entitlement to an appraisal. These appeals will likely address the following issues:
1. Waiver – Perhaps the most litigated issue in recent appraisal appeals is whether the right to appraisal has been waived. Waiver usually exists where the party seeking appraisal has participated in litigation or otherwise taken action inconsistent with appraisal.[2] An insurer can also waive appraisal if it fails to give the policyholder notice of mediation under section 627.7015, Florida Statutes.
2. Ripeness – Appraisal cannot be compelled until the circuit court holds an evidentiary hearing and “make[s] a preliminary determination as to whether the demand for appraisal is ripe.”[3] Appraisal is ripe after: (1) the policyholder complies with all post-loss obligations under the policy and (2) the insurer has a reasonable opportunity to investigate and adjust the claim.[4]
3. Appraisable Issue – Appraisal is ordinarily limited to resolving issues regarding the “amount of loss.”[5] Much litigation centers on the rule “that causation is a coverage question for the court when an insurer wholly denies that there is a covered loss and an amount-of-loss question for the appraisal panel when an insurer admits that there is covered loss, the amount of which is disputed.”[6] However, recent cases have addressed this issue in the context of sinkhole claims, holding that disputes about the “method of repair” concern the “amount of loss” and are appraisable.[7]
4. Timing of Appraisal – Florida courts disagree as to whether coverage issues must be resolved before appraisal. The Second and Third DCAs follow the “dual-track” approach that gives circuit courts “discretion to control the order in which an appraisal and coverage determinations proceed.”[8] By contrast, the Fourth DCA has held that coverage issues must be resolved before appraisal.[9] This conflict remains unresolved.
These recurring issues provide a preliminary roadmap for trial attorneys to argue for or against a request for appraisal, and for appellate attorneys to evaluate whether to appeal an order granting or denying an appraisal.
[1] See Citizens Prop. Ins. Corp. v. Mango Hill #6 Condo. Ass’n, Inc., 117 So. 3d 1226, 1229 (Fla. 3d DCA 2013) (explaining the main features of an insurance appraisal).
[2] Fla. Ins. Guar. Ass’n v. Waters, 157 So. 3d 437, 440 (Fla. 2d DCA 2015).
[3] Citizens Prop. Ins. Corp. v. Admiralty House, Inc., 66 So. 3d 342, 344 (Fla. 2d DCA 2011).
[4] Id.
[5] Mango Hill #6, 117 So. 3d at 1229.
[6] Johnson v. Nationwide Mut. Ins. Co., 828 So. 2d 1021, 1022 (Fla. 2002).
[7] Cincinnati Ins. Co. v. Cannon Ranch Partners, Inc., 162 So. 3d 140, 143 (Fla. 2d DCA 2014).
[8] Admiralty House, 66 So. 3d at 344; Sunshine State Ins. Co. v. Rawlins, 34 So. 3d 753, 754-55 (Fla. 3d DCA 2010).
[9] Citizens Prop. Ins. Corp. v. Michigan Condo. Ass’n, 46 So. 3d 177, 178 (Fla. 4th DCA 2010).
