Florida law requires all insurance companies to act in good faith when approving, denying, or settling claims. An insurer that fails in this duty may face a bad faith lawsuit from an aggrieved policyholder or third-party victim. In defending against such claims, however, the person alleging bad faith still has to present evidence in support of their case. Put another way, an insurance company is not guilty of bad faith based merely on the say-so of the plaintiff.

Federal Court Rules GEICO Not Responsible for $14.9 Million Stipulated Judgment in Motorcycle Accident

A recent decision from the U.S. 11th Circuit Court of Appeals, Pelaez v. Government Employees Insurance Company, provides a useful example. This case arose from a 2012 motor vehicle accident in Florida. An 18-year-old man was driving his mother’s car to his high school prom when he collided with a motorcycle. The mother insured the car with GEICO. The son reported the accident to GEICO but did not mention any injuries, even though the motorcycle driver had been airlifted to a hospital.

The next business day, GEICO assigned a claims adjuster to investigate the accident. Within two days, the adjuster reached a preliminary conclusion that the motorcycle driver had been speeding just before the collision. About a week after that, the motorcyclist’s personal injury attorney contacted GEICO but did not make any settlement demands. The day after that–by this point, 11 days after the accident–GEICO decided to offer a $50,000 settlement, which was the limit of the mother’s policy.

GEICO sent the motorcyclist’s attorney a $50,000 check and a proposed release form, which is standard practice in insurance settlements. The release essentially absolved the mother and son of any further liability for the accident. GEICO did not present this as a “take it or leave it” offer. Instead, it invited the motorcyclist’s attorney to review and suggest any changes to the release form.

About a week later, the motorcyclist’s attorney rejected the offer, on the grounds the proposed release was too broad. Indeed, the attorney accused GEICO of acting improperly by demanding any release at all. GEICO informed its policyholders of the rejection.

Five months later, the motorcyclist filed a personal injury lawsuit against the mother and son in Florida state court. GEICO initially defended them against the lawsuit. But the mother and son eventually agreed to a “stipulated judgment” of $14.9 million with the motorcyclist. GEICO did not consent to this judgment. Both sides then filed a bad faith lawsuit against GEICO in federal court.

The 11th Circuit eventually affirmed a lower court’s dismissal of the case. Under these facts, the appellate court said no rational jury could find that GEICO acted in bad faith. The mere fact that GEICO’s settlement offer came with a release form that the motorcyclist’s attorney considered “overbroad” was insufficient to support a bad faith claim. Indeed, the 11th Circuit said the actions of the motorcyclist’s attorney demonstrated “he had higher goals to pursue” and that factored in the “totality of the circumstances” supporting dismissal.

Speak with a Central Florida Bad Faith Insurance Lawyer Today

It is not unusual for a plaintiff’s attorney in a personal injury case to jump up and cry “bad faith” when they are unhappy with a settlement offer. But merely claiming bad faith is not proof. And insurance companies have every right to defend against such spurious claims.

If you are involved in this type of dispute and need legal advice from a skilled Tampa bad faith insurance attorney, contact HD Law Partners today to schedule a consultation.

Source:

media.ca11.uscourts.gov/opinions/pub/files/202012053.pdf

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Insurance companies have a duty to act in good faith when handling an insured party’s claims. This often includes defending the insured against lawsuits that are within the scope of a policy. If an insurer wrongfully refuses to provide such a defense, the insured can settle the case themselves in exchange for the plaintiff promising to only seek collection from the insurance company. This is known as a Coblentz agreement based on a 1969 federal appeals court decision.

The problem with Coblentz agreements is they are susceptible to collusion between the insured party and the person suing them. For this reason, courts will only enforce such agreements if the plaintiff–the party seeking to collect against the insurer–can show that coverage existed, the insurer wrongfully refused to defend the insured defendant, and that the terms of the ultimate settlement were reasonable and made in good faith.

Appeals Court: Insurer Not Liable for Policyholder’s Negligent Management of Citrus Grove

A recent decision from the U.S. 11th Circuit Court of Appeals, Travelers Indemnity Company of Connecticut v. Richard McKenzie & Sons, Inc., illustrates a case where the plaintiff failed to make these required showings. This case involved a Florida citrus grove. The owner of the grove–the plaintiff in the underlying lawsuit–hired the defendant to manage the grove on his behalf. Essentially, the plaintiff was a hands-off absentee landlord who trusted the defendant to plant and maintain the trees on the grove.

The arrangement soured, however, when the plaintiff said he discovered the defendant billed him for trees that were never planted, stealing his supplies, and in general damaging the groves through negligence. The plaintiff fired the defendant and sued him for breach of contract. The plaintiff subsequently added a negligence claim after discovering the defendant had insurance that might cover such damages.

The plaintiff and defendant eventually settled their non-negligence claims for $200,000, which the defendant agreed to pay personally. The parties also included a Coblentz agreement with respect to the negligence claims in the amount of $2,965,750 in damages. The plaintiff then asserted the right to collect this amount from the insurer.

Understandably, the insurer balked. The insurance company filed its own lawsuit in federal court seeking a declaratory judgment that it had no duty to defend or indemnify the defendant against the plaintiff’s original negligence claims. The insurer further maintained this was a case of improper collusion between the plaintiff and the defendant.

A federal judge granted summary judgment to the insurer. The 11th Circuit affirmed that decision on appeal. The main issue, the Court of Appeals noted, was that the insurance policy contained an exclusion for any “property damage” caused by the defendant “performing operations.” Here, the defendant’s negligence occurred while performing operations on the plaintiff’s citrus grove. His actions therefore fell within the exclusion and the insurer had no duty to indemnify or defend.

Speak with a Florida Insurance Bad Faith Attorney Today

Insurance companies are required to pay legitimate claims. But they are certainly under no obligation to honor Coblentz agreements that attempt to circumvent the clear language of a policy exclusion. If you represent an insurance company looking to defend against such bad faith lawsuits, contact the Tampa bad faith insurance lawyers at HD Law Partners today to schedule a consultation.

Source: https://scholar.google.com/scholar_case?case=5557052695403336909

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The COVID-19 pandemic has caused a significant disruption to many Florida business owners. It has also led to litigation over the scope of “business interruption” insurance. In other words, if a business loses revenue due to pandemic-related restrictions, does that qualify as an insurable loss?

The United States Court of Appeals for the 11th Circuit recently addressed this question in a Georgia breach of contract lawsuit, Gilreath Family & Cosmetic Dentistry, Inc. v. Cincinnati Insurance Company. The plaintiff in this case is a dental practice based in Marietta, Georgia. Following the Georgia governor’s declaration of a public health emergency in early 2020 due to COVID-19, the plaintiff followed official guidance and canceled its routine and elective procedures. As this was the bulk of the practice, the plaintiff said it lost a “substantial portion” of its income.

The plaintiff therefore filed a claim on its business interruption coverage with the defendant insurance company. The policy provided coverage for income lost “due to the necessary suspension of its operations” as well as compensation for additional expenses “sustained during that suspension.” The defendant denied the claim, however, noting that business interruption coverage only applied if the suspension was due to a “direct loss to property,” i.e., damage to the insured premises itself. In effect, the insurer’s position was that there had to be some physical damage to the dental office itself–the mere interruption of business due to the state’s health restrictions was not sufficient.

The plaintiff then sued the defendant for breach of contract. But a federal trial court, and later the 11th Circuit, ultimately sided with the insurance company. The 11th Circuit explicitly rejected the plaintiff’s argument that the business interruption language of its policy applied “when government restrictions were in effect” on its practice. As the insurer maintained, the appellate court said the policy language required “physical loss” or damage to the plaintiff’s property. The 11th Circuit added that the Georgia Court of Appeals, interpreting similar policy language, had previously reached the same conclusion.

And there was no dispute that nothing contained in the state’s COVID restrictions damaged the plaintiff’s property. Indeed, the plaintiff never alleged any such damage. The appellate court added that the restrictions did not even force the closure of the plaintiff’s practice, as it remained open for emergency procedures. And even the possibility that keeping the practice partly open during the pandemic–where COVID particles might infect surfaces inside the office–was not enough to qualify as property damage.

Speak with a Florida Insurance Lawyer Today

This is not the last time we will see litigation related to insurance coverage and COVID-19. Insurance companies certainly have a legitimate interest in rejected invalid claims. And businesses affected by the pandemic also have the right to seek clarification as to their rights under a particular policy.

If you need legal advice or representation from a qualified Tampa insurance attorney, contact HD Law Partners today to schedule a consultation.

Source:

https:///scholar.google.com/scholar_case?case=3683333503521726912&q=hurricane&hl=en&scisbd=2&as_sdt=4,10,121,325,326,327

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In early August, the U.S. Centers for Disease Control and Prevention (CDC) issued a new 60-day moratorium on residential evictions in certain parts of the country that continue to experience a “high community transmission” rate of the COVID-19 virus. This includes most of Florida. So if you are a Florida resident currently behind on their rent, you may continue to be eligible for certain protections under the new CDC order.

Prior CDC eviction moratorium orders applied nationwide. As noted above, the new order only covers those counties within the United States that are “experiencing substantial or high levels of community transmission.” As of August 24, every county in Florida meets that requirement, according to the Tampa Bay Times. However, if in the future any particular county goes 14 consecutive days below the “substantial” or “high” levels of community transmission, the CDC’s moratorium will not apply to that county until the rates again meet the required threshold.

The new order is also limited to a 60-day period from August 3 until October 3, 2021, although it is possible the moratorium may again be extended either by the CDC or through congressional action.

Are You Covered by the New Eviction Moratorium?

So does the CDC’s order mean that no Florida renter can be evicted until October 3, 2021? Not exactly. The order only applies to certain “covered persons,” which is defined as any residential tenant who files a sworn declaration with their landlord that all of the following conditions are true:

1. The renter has used all of their best efforts to apply for government assistance to pay their rent;
2. The renter earned no more than $99,000 during 2020 or expects to earn no more than $99,000 in 2021 (if the renters are a married couple, these amounts double to $198,000);
3. The renter is unable to pay their rent, in full or in part, due to a “substantial loss of household income” or “extraordinary out-of-pocket medical expenses”;
4. The renter has made their best efforts to pay at least part of their rent; and
5. Eviction would render the renter homeless, or force them to “live in close quarters” with others due to a lack of other housing options.

Again, the moratorium’s protection is not automatic. As the renter, you have the burden of filing a written declaration, as described above, with your landlord. Also keep in mind, the moratorium does not eliminate your obligation to eventually pay any back rent due. You must continue to pay what you can. The CDC’s order only prevents your landlord from taking steps to evict you based on non-payment of your full rent, provided you comply with the conditions spelled out above. Your landlord could still try and evict you for other violations of your lease separate from any nonpayment of rent.

Contact HD Law Partners Today

The COVID-19 pandemic has been stressful for everyone. And the prospect of losing one’s home makes things even scarier. So if you need legal advice regarding a landlord-tenant dispute, contact HD Law Partners today to schedule a free consultation with one of our Tampa insurance attorneys.

Sources:

https://news.yahoo.com/florida-landlords-renters-cdc-eviction-180300359.html

https://cdc.gov/media/releases/2021/s0803-cdc-eviction-order.html

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It is common practice for homeowners to assign their insurance benefits to businesses that perform repair work. But such assignments must strictly comply with the terms of the underlying policy. Insurance companies are under no obligation to pay over benefits to an unauthorized third party.

Appeals Court Grants Insurer’s Request to Reverse Summary Judgment

A recent decision from the Florida Fourth District Court of Appeals provides a useful example. In this case, QBE Specialty Insurance Company v. United Reconstruction Group, Inc., a homeowner sustained water damage to their property. The day the damage was found, the homeowner hired a contractor–the plaintiff in this case–to perform emergency mitigation services.

As a condition of receiving mitigation services, the homeowner and the plaintiff signed a written contract, which purported to include an assignment of the homeowner’s insurance benefits to the plaintiff. Of note, the agreement had spaces for the homeowner to provide his printed name and signature. There was a signature but the printed name space was left blank.

After completing work, the plaintiff sent the homeowner’s insurance company a bill for $10,897.91. The plaintiff and the insurer then negotiated a reduced fee of $8,603.20. But the insurer sent the final payment to the homeowner directly, not the plaintiff.

This prompted the plaintiff to sue, alleging the insurer failed to honor the terms of the assignment and the insurance policy. Specifically, the policy said that the insurer would pay the homeowner “unless some other person … is legally entitled to receive payment.” The plaintiff argued it was such a person.

The insurer’s response was that since the homeowner’s did not provide a complete signature on the contract with the plaintiff, there was no valid assignment. Indeed, the insurer presented evidence from a forensic document examiner, who testified the signature on the purported assignment appeared to be different than the homeowner’s known signature.

Despite this evidence, a trial court granted summary judgment to the plaintiff, finding there was a “valid assignment” and thus the insurer should have paid the plaintiff directly for its services. The insurer appealed. The Fourth District agreed with the insurer that summary judgment was inappropriate, reversed the lower court’s order, and returned the case for trial.

The Fourth District explained the burden was on the plaintiff to prove there was a valid assignment. The insurer had already presented evidence demonstrating the opposite. Since the plaintiff had yet to present its own evidence rebutting the forensic examiner’s testimony, there was a material “issue of fact,” which as a matter of law cannot be resolved at the summary judgment stage.

Speak with a Tampa Mold & Water Damage Lawyer Today

Insurance companies have every right to insist policyholders and potential assignees strictly comply with the terms of a policy. Certainly, no insurer is required to honor a forged or fraudulent assignment. That is why it is crucial to work with an experienced Tampa insurance attorney who can review the facts of a case and provide you with skilled representation. Contact HD Law Partners today if you would like to schedule a consultation with a member of our team.

Source:

https://scholar.google.com/scholar_case?case=8453754403865153681

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Insurance policies are contracts. As such, when an insurer fails to pay a valid claim, it is subject to suit for breach of that contract. But this works both ways. If the policyholder fails to live up to their contractual obligations, that can supply the insurer a valid defense to any alleged breach.

A recent decision from the Florida Third District Court of Appeal, Nunez v. Universal Property Casualty Insurance Company, provides a helpful illustration. In this case, the plaintiff insured her home with the defendant. The plaintiff reported a claim in 2015 over purported water damage from two leaks in her kitchen and bathroom, respectively. She later submitted written proof of loss, asserting $50,000 in total damages.

The defendant investigated the claims. As part of the investigation, the defendant requested the plaintiff attend an Examination Under Oath (EUO), which is a common procedure in resolving insurance claims. The plaintiff refused to appear. Indeed, she declined to respond to multiple EUO requests. Accordingly, the defendant denied the plaintiff’s water damage claims. She, in turn, filed a breach of contract lawsuit.

At trial, the defense argued the plaintiff’s failure to attend the EUO was itself a “material breach of the insurance contract” preventing her from recovering any damages. The trial judge instructed the jury that it had to find that the defendant proved the plaintiff “unreasonably failed to attend her” EUO to sustain this defense. The jury ultimately rejected the defense and returned a verdict for the plaintiff.

Sometime after the trial, the Third District issued an opinion in another case, American Integrity Insurance Company v. Estrada, that held when an insurance company establishes that a policyholder has “failed to materially satisfy any contractually mandated post-loss obligations, then the burden shifts” to the policyholder to establish their breach did not prejudice the insurer’s rights.

Based on the Estrada decision, the defendant in Nunez argued it was entitled to a new trial. The trial court granted that motion. Indeed, the judge issued a directed verdict holding that the plaintiff breached the insurance contract. The judge then ordered a new trial to determine whether the defense was prejudiced by this breach.

The plaintiff appealed, hoping to reinstate the original jury verdict, but the Third District affirmed the trial judge’s decisions. The appellate court pointed out that unlike the earlier Estrada case–where there was a genuine factual dispute over whether the policyholder complied with the insurance contract–here the plaintiff’s noncompliance was not in dispute. Instead, the plaintiff argued during the original jury trial that the defendant’s request for an EUO was itself unreasonable. But the Third Circuit said that was a legally irrelevant argument.

Speak with a Florida Insurance Attorney Today

Insurance litigation often involves a number of technical and fact-specific issues. That is why it is important to work with an experienced Tampa mold and water damage attorney who understands the process and can work with you to secure the most favorable outcome. Contact HD Law Partners today to schedule a consultation.

Source:

scholar.google.com/scholar_case?case=12520752558871577193

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Even when an insurance company agrees to provide coverage for damage to a home, they will often challenge the extent or cost of the insurable loss. This then forces the homeowner to take legal action to protect their contractual rights. Such litigation then often ends up being a “battle of the experts,” with each side offering qualified testimony to establish the true extent of the damages involved.

Federal Court Revives Homeowners’ Lawsuit Over Hurricane Irma Damage

A recent decision from the U.S. 11th Circuit Court of Appeals, Izquierdo v. Certain Underwriters at Lloyd’s London, provides an example of such a dispute. The plaintiffs in this case own a South Florida home that sustained roof damage due to Hurricane Irma in 2017. According to the plaintiffs, their roof had no leaks prior to the storm. Post-Irma, however, they noticed roof leaks and water damage inside their home.

A public adjuster inspected the property and recommended replacing the entire roof. Together with other damages, the adjuster valued the plaintiffs’ insurance claim at about $230,000. The plaintiffs later obtained an estimate for just the cost of replacing the roof, which came to $109,300.

Meanwhile, the insurance company conducted its sown inspection through a third-party administrator. The administrator concluded that while the storm “resulted in 24 fractured and 83 loose concrete roof tiles,” it did not create any “openings” in the roof that would cause water leakage. Instead, the administrator believed there must have been water leaking through “preexisting openings.” As such, the insurer said it would not replace the roof and only offered about $28,000 on the plaintiffs’ claim (which would then be reduced by a $14,400 deductible).

The plaintiffs subsequently sued the insurance company for breach of contract in Florida state court. The insurer exercised its right to remove (transfer) the case to federal court. To support their case, the plaintiffs disclosed their intentions to call three expert witnesses at trial.

Federal court rules require parties to make certain “disclosures” regarding expert witnesses prior to trial. This is to ensure neither side is unfairly surprised. The rules distinguish between expert witnesses who need to provide a written report and those who do not. This latter group is often referred to as “hybrid” witnesses, as their testimony combines both factual observations and opinion.

In this case, the plaintiffs classified their experts as hybrid witnesses, which do not require the same level of disclosure as pure fact witnesses. The insurance company objected and claimed the witnesses should be held to the stricter disclosure standard. The trial judge sided with the insurer, struck the testimony of all three of the plaintiffs’ proposed experts, and dismissed the case outright.

On appeal, the 11th Circuit said the trial judge failed to meaningfully justify their decisions. The trial court was at least bound to give more careful consideration to the plaintiffs’ arguments before throwing out their entire case, the appellate court said. So it returned the case to the lower court for further proceedings.

Speak with a Florida Insurance Lawyer Today

Insurance litigation is rarely quick or easy. But when your contractual rights are at stake, you should not hesitate to assert yourself in court when necessary. If you need legal advice or representation from an experienced Tampa insurance litigation attorney, contact HD Law Partners today.

Source:

scholar.google.com/scholar_case?case=8285043308027703791

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If you have ever filed an insurance claim, you have no doubt dealt with an adjuster, i.e., the person employed by the insurance company to review your case. But there are also individuals known as public adjusters who are licensed by the State of Florida to represent individuals, such as yourself, in protecting your interests during the claims process. Remember, the insurance company’s adjuster is there to protect the company, not you. A public adjuster can thus help to level the playing field, as they understand how insurance policies and laws work better than you.

Can Public Adjuster Also Serve as Disinterested Appraisers?

Of course, public adjusters are not free. They work on a contingency basis. That means you do not have to pay them any upfront fees, but they are entitled to an agreed-upon percentage of whatever settlement you ultimately receive from the insurance company. This makes the public adjuster an interested party in resolving your insurance claim favorably.

This “interest” was also the subject of a recent decision from the Florida Second District Court of Appeals, State Farm Insurance Co. v. Parrish. This case involved a homeowners’ policy claim arising from Hurricane Irma. The homeowner retained a company as public adjuster and agreed to pay them 10 percent of any settlement.

An employee of the public adjuster subsequently appraised the homeowner’s claim at $495,079.25, which was submitted to the insurance company, State Farm. In submitting this claim, the employee also invoked the homeowner’s right under the policy to “select a qualified, disinterested appraiser” in the event State Farm disputed the amount of the claim. The employee designated the president and owner of his company as the appraiser.

State Farm objected and filed a petition in Collier County Circuit Court to “compel appraisal with [a] disinterested appraiser.” In simple terms, State Farm argued that the public adjuster could not designate itself as the disinterested appraiser, since it had a financial interest in the final settlement. The Circuit Court dismissed this petition, however, prompting State Farm to appeal to the Second District.

The appellate court sided with State Farm, albeit with some confusion. The Second District noted that State Farm appeared to have invented a new type of legal proceeding. That is, there was no such thing as a “Petition to Compel Appraisal with Disinterested Appraiser” under Florida law. Nevertheless, the Second District decided to treat this as an appeal of a final order in a normal civil case.

And in reviewing that order, the Second District said it was clear that a public adjuster hired by the homeowner could not also serve as a “disinterested appraiser,” such as that term was used in the insurance policy. Since the whole point of the appraisal process is to recommend a monetary award to the homeowner, the public adjuster’s “contingency stake” in said award was clearly a “pecuniary interest.”

The Second District noted its holding put it in conflict with the Third District Court of Appeals, which has previously held that a contingency fee arrangement does not automatically disqualify an adjuster from serving as an appraiser, so long as that arrangement is disclosed. The Second District certified the conflict to the Florida Supreme Court, which has the option of taking up the case to resolve the matter.

Contact HD Law Partners Today

If you are involved in any type of claims dispute following a hurricane or other disaster and need advice or representation from an experienced Tampa insurance attorney, contact HD Law Partners today to schedule a consultation.

Source: https://scholar.google.com/scholar_case?case=1161512211674549717

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After a bad storm, a homeowner might notice damage to their property and assume that the weather was responsible. From the insurance company’s perspective, however, correlation does not necessarily mean causation. In other words, the evidence may show that the damage to the property was the result of normal wear and aging and not a specific weather event.

When these type of disputes arise, the homeowner may assume that a judge will simply “take their word for it” that the storm was responsible and thus the insurance company is responsible for the damages. But that is not how insurance law works. If the homeowner disputes the insurance company adjuster’s findings, they need to respond with credible evidence beyond their own say-so.

Judge Strikes “Expert” Testimony Due to Unreliable Methodology

A recent decision from a federal judge in Jacksonville, Dias v. GeoVera Specialty Insurance Company, provides a helpful illustration. In this case, a homeowner filed a claim with an insurance company, alleging that his roof was damaged in a storm that occurred on December 20, 2018. More precisely, the homeowner told the insurer the damage “may have been due” to this particular storm.

The insurance company retained an independent adjuster to conduct an inspection. The adjuster noted the homeowner’s roof had been in place since the initial construction in 1985, more than 30 years ago. Critically, while the adjuster did observe some cracks in the roof tiles, he concluded this was not the result of wind from a storm but rather “wear and tear over time.” Since the homeowner’s policy excluded coverage for “wear and tear” of this sort, the insurer denied the claim for roof damage.

The homeowner sued. In court, the homeowner presented a conflicting expert report from his own adjuster. The insurer also retained a second expert to re-inspect the property. As you might expect, the dueling adjusters came to different conclusions. The insurer’s expert found the roof damage was not caused by wind from the 2018 storm; the homeowner’s expert said just the opposite.

The judge, however, ruled the testimony from the homeowner’s expert inadmissible. Federal and state courts follow certain rules when admitting expert testimony of any kind. These rules require the judge to decide, among other things, if the expert is qualified and whether they used “reliable” methodology in reaching their conclusions.

In this case, the judge said the homeowner’s adjuster did not use a reliable methodology in concluding the roof was damaged by the storm. To the contrary, the judge said the adjuster’s “methodology” was basically accepting what the homeowner had told him, i.e., that wind caused the roof damage. The adjuster only examined the roof personally one time and he “did not review other records or documents.” As such, the judge found the testimony inadmissible. And since the homeowner had no other evidence to support his case, the judge dismissed in favor of the insurance company.

Speak with a Florida Homeowners’ Insurance Lawyer Today

Insurance companies must balance their responsibility to policyholders with their fiduciary duty to shareholders. No insurer is required to pay a claim that lacks any substantiation. If you are involved in a dispute and need representation from a qualified Tampa insurance litigation attorney, contact HD Law Partners today to schedule a consultation.

Source:

scholar.google.com/scholar_case?case=12145268693202774204

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When a home sustains water damage, the property owners understandably want to take immediate action to mitigate the problem. But sometimes this means they do not take the time to read–or follow–the terms of their homeowner’s insurance policy. Many insurance contracts require advance notice or approval before undertaking even emergency repairs to a property. Such provisions help protect insurers against fraudulent or exaggerated damage claims.

Florida Appeals Court Rejects Home Contractor’s “Gotcha” Tactics Against Insurer

A recent decision from the Florida Fourth District Court of Appeals, Restoration v. Citizens Property Insurance Corporation, provides a case in point. A condominium unit in Palm Beach County sustained some water damage. The homeowners hired a restoration company to provide water removal and remediation services. Under the terms of the homeowner’s insurance policy, coverage for “reasonable emergency measures taken solely to protect covered property from further damage” was limited to $3,000 or 1 percent of the policy’s liability limits. The owners could ask to exceed the limit of the cap by asking for approval, which the insurer was required to grant or deny within 48 hours of receiving such a request. If the insurer did not answer the request within the 48-hour period, the homeowner was entitled to reimbursement for the full amount of any reasonable emergency measures.

In this case, the property owners assigned their insurance benefits to the restoration company. The company proceeded to remove damaged drywall from the property, as well as the wet, moldy portions of the affected walls. The restoration company then filed a claim with the insurance company, which was for an amount greater than $3,000.

The insurer held its ground, stating it was only required to pay up to the $3,000 cap for reasonable emergency measures. The restoration company then filed a lawsuit in Palm Beach County Circuit Court, alleging that the insurer had not responded to its claim within 48 hours and thus was on the hook for the full amount of its invoice. Essentially, the company argued that by receiving an assignment of benefits from the homeowner, that functioned as an “official request to exceed the $3,000 cap.”

The courts did not see it that way. The Fourth District, upholding a prior ruling from the Circuit Court, said the restoration company essentially engaged in a “gotcha” tactic. It sent an email to the insurance company that contained the assignment of benefits from the homeowner. What it did not contain was an explicit request to exceed the $3,000 cap. But by sending the email, the restoration company hoped to start the 48-hour clock. The Fourth District said it would “not permit such tactics.”

Speak with a Tampa Mold and Water Damage Attorney Today

Insurance policies are carefully drafted to ensure there is no ambiguity as to the obligations by all parties. And while an insurance company is required to pay any valid claims, that does not mean insured parties are relieved of their own duties to follow the terms of the policy when filing a claim. If you are an insurer involved in litigation over an improper mold or water damage claim and need representation from a qualified Tampa mold & water damage lawyer, contact HD Law Partners today.

Source:

https://scholar.google.com/scholar_case?case=3149558130986093115

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