Castle Key Ins. Co. v. Wooden Family Trust

• Decision Date: 01 June 2021
• Docket Number: No. 1D20-1373,1D20-1373
• Citation: 321 So.3d 346
• Parties: CASTLE KEY INSURANCE COMPANY, Appellant, v. WOODEN FAMILY TRUST, Appellee.
• Court: Florida District Court of Appeals

321 So.3d 346

CASTLE KEY INSURANCE COMPANY, Appellant,

v.WOODEN FAMILY TRUST, Appellee.

No. 1D20-1373

District Court of Appeal of Florida, First District.

June 1, 2021

Scot E. Samis of Traub Lieberman Straus & Shrewsberry LLP, St. Petersburg, for Appellant.

Samuel Alexander of Alexander Appellate Law P.A., DeLand, for Appellee.

Jay, J.

Defendant below, Castle Key Insurance Company ("Castle Key"), appeals from the nonfinal order denying its Motion to Abate Action, Stay Discovery and Compel Appraisal in this breach of insurance contract action.¹ The trial court agreed with Plaintiff below, Wooden Family Trust ("the Trust"), that Castle Key actively litigated the case and, thus, waived its right to compel an appraisal. We disagree. We hold that Castle Key's motions were reasonable under the circumstances, its participation in the litigation did not imply a voluntary and intentional relinquishment of its contractual right to compel an appraisal, and—in all relevant respects—its actions were indistinguishable from those undertaken by the insurer in State Farm Florida Insurance Co. v. Nordin , 312 So. 3d 200 (Fla. 1st DCA 2021), in which we reversed a similarly-based nonfinal order. Consequently, for the reasons expressed in Nordin , we also reverse the nonfinal order denying Castle Key's motion and remand the case for further proceedings. We write only to clarify why Castle Key was entitled to file a motion for more definite statement without crossing the implied line between a legitimate litigation position and conduct effecting the waiver of its express right to an appraisal.

I.

Castle Key insured the Wooden Family Trust's property under a homeowner's policy from March 16, 2018, through March 16, 2019. In October 2018, the Trust filed a claim for property damages caused by a hurricane. Castle Key accepted coverage for the claim under the policy and advanced payments in November and December 2018.

In March 2019, the Trust's public adjuster submitted an estimate that was significantly higher than Castle Key's initial estimate. Castle Key returned to the property and, upon inspection, issued a supplemental payment in May 2019.

Notwithstanding, in August 2019, the Trust sued Castle Key for breach of contract and declaratory relief, alleging Castle Key had not paid its claim as required by the policy. Written discovery was served with the lawsuit. In paragraph 13 of Count I of the complaint the Trust alleged that Castle Key failed to

(i) acknowledge coverage for the Loss; and/or (ii) acknowledge that payment of insurance proceeds for the Loss [would] be forthcoming; and/or (iii) issue payment in full of insurance proceeds for the Loss to Plaintiff.

It was further alleged that said conduct constituted a breach of contract entitling the Trust to payment of all unpaid bills with interest.

Castle Key responded by filing a motion for more definite statement pursuant to Florida Rule of Civil Procedure 1.140(e). The motion focused on the allegations pleaded in the alternative in paragraph 13. Castle Key asserted it could not determine from the paragraph which coverage or what damages were at issue, or whether the Trust was alleging additional damages. As a result, Castle Key maintained it was "unable to intelligibly evaluate the claims at issue or formulate its response to the Complaint whether in the form of an answer and affirmative defenses, or demand for appraisal." In short, Castle Key averred that it could not "determine the specific matter which [was] in dispute" and, consequently could not "frame a response to the Complaint." In addition, Castle Key filed a motion to dismiss the separate count for declaratory relief.

At the hearing on the motions, counsel for Castle Key distilled its argument for a more definite statement to its essence:

So it's unclear what the Plaintiff is seeking or what the issue is. Are they saying there's no payment? Are they saying that the payment was not enough? So we're not really understanding what the Plaintiff is seeking, what's at issue, so we can't really frame a response to the count for breach of contract. We're not sure how to plead or whether it's even necessary to plead and whether this is something that can simply be resolved through appraisal , because Defendant did actually extend coverage and issue payment, and so that is why we are requesting a more definite statement.

(Emphasis added.) The trial court denied both of Castle Key's motions and ordered Castle Key to respond to the Trust's written discovery requests by November 13, 2019. It also granted the Trust's motion to compel depositions.

Promptly, on November 26, 2019, Castle Key filed its Motion to Abate Action, Stay Discovery and Compel Appraisal, expressly invoking its right to an appraisal in accordance with the policy terms, which were set forth in full in its motion. The motion asserted that a dispute regarding the amount of loss existed and should be resolved by appraisal. That same day, Castle Key filed an answer denying any breach and raising the appraisal provision as an affirmative defense.

The motion to compel appraisal was not heard until March 26, 2020. At the hearing, argument was directed principally to the issue of waiver, with the Trust's attorney arguing that if Castle Key had intended to invoke its right to appraisal under the policy, it should have done so when the public adjuster first made it aware of a dispute over the amount of covered losses in March 2019. In response, Castle Key claimed its participation in the litigation had been entirely passive and consistent with its appraisal right.

The trial court denied Castle Key's motion for an appraisal, finding that it had waived its right. At the hearing, the judge expressed his rationale as follows:

I agree with the defense in one respect. I agree that I don't think that any presuit activity in terms of reinspecting the property or issuing additional payments could be conceived or perceived as being [a] waiver of the right to request appraisal. Because as we well know that's a part of the process is that ... you go back out and readjust and inspect and issue additional payments and I think that happens all the time.

But ... to me the more important focus of this – on this particular case with this particular record has to do with the activity after suit was filed. And it's not – you know, not one that's necessarily easy to rule on. Some of these are very easy, this one ... I think is a little bit trickier.

But I'm going to have to tell you that I have ruled repeatedly that throughout the last 16, or 17, or 18 months, however long it's been since that hurricane hit here, that the demand for appraisal can be made after suit is filed and I think the case law supports that.

However, in this particular instance where what we did in response to the complaint is a Motion for More Definite Statement as to Count 1 and a Motion to Dismiss to Count 2, and then a hearing on that, and then a couple of Motions for Extension of Time, and then an Answer to [sic] Motion to Compel Appraisal, that to me is a different picture than what I have seen repeatedly; which is as soon as the defendant is served with the complaint, we get a Motion to Stay Discovery or Motion for Protective Order and a Motion to Dismiss the Case or Stay it pending appraisal.

So in this particular case with this particular record I'm going to conclude that indeed the defense did waive the right to demand appraisal by not asserting it earlier in the litigation.

II.

As generally recognized, "[a]n appraisal clause may be invoked for the first time after litigation has commenced." Fla. Ins. Guar. Ass'n, Inc. v. Castilla , 18 So. 3d 703, 705 (Fla. 4th DCA 2009) (citing Gonzalez v. State Farm Fire & Cas. Co. , 805 So. 2d 814 (Fla. 3d DCA 2000) ); accord People's Tr. Ins. Co. v. Fernandez , 317 So. 3d 207 (Fla. 3d DCA Feb. 24, 2021) (reaffirming Castilla ); Fla. Ins. Guar. Ass'n v. Branco , 148 So. 3d 488, 494 (Fla. 5th DCA 2014). But a waiver of that right "occurs when the party seeking appraisal actively participates in a lawsuit or engages in conduct inconsistent with the right to appraisal." Fla. Ins. Guar. v. Rodriguez , 153 So. 3d 301, 303 (Fla. 5th DCA 2014) (citing Branco , 148 So. 3d at 493 ).

It is worth noting that two of the motions filed by Castle Key—the motion for more definite statement and the motion to dismiss—had also been filed by the defendant insurer, in Nordin , neither of which, in this Court's opinion, constituted participation in the litigation so as to be inconsistent with its right to compel an appraisal. Specifically, we held that State Farm's motions for more definite statement and to stay discovery were filed "with the express purpose of determining whether appraisal was appropriate." 312 So. 3d at 204. We further noted that it was not until State Farm received Nordin's amended complaint that it "knew the dispute was over the amount of loss and that appraisal would be appropriate." Id. State Farm then responded to the amended complaint by moving to compel appraisal under the policy and raised its right of appraisal as an affirmative defense in its answer. Accordingly, we held that "the length of litigation, the number of filings, and the substance of State Farm's motions and pleadings were all consistent with its right of appraisal" and that "the record reflect[ed] deliberate action to evaluate the nature of the claims and then invoke appraisal at the first reasonable opportunity." Id. at 204–05. We see no compelling reason to depart from that holding in this case.

III.

It is abundantly clear that Castle Key's motion for more definite statement was a key component of the trial court's decision to deny its motion to compel an appraisal. In our view, however, given the vague and ambiguous nature of the Trust's claims in Count I, it was unreasonable to require Castle Key to file a responsive pleading.

Florida Rule of Civil Procedure 1.140(e) addresses a motion for more definite statement in the...