Cincinnati Ins. Co. v. Cannon Ranch Partners, Inc.
| Decision Date | 31 December 2014 |
| Docket Number | No. 2D14–827.,2D14–827. |
| Citation | 162 So.3d 140 |
| Parties | The CINCINNATI INSURANCE COMPANY, a foreign corporation doing business in the State of Florida, Appellant, v. CANNON RANCH PARTNERS, INC., a Florida corporation, Appellee. |
| Court | Florida District Court of Appeals |
Guy E. Burnette, Jr., of Guy E. Burnette, Jr., P.A., Tallahassee, for Appellant.
John J. Thresher and Kimberly D. Thresher of Thresher and Thresher, P.A., Tampa, for Appellee.
The Cincinnati Insurance Company seeks review of the order denying its motion to compel appraisal and abate litigation.1 Because the matter in dispute is one subject to appraisal, we reverse and remand for further proceedings.
Cincinnati Insurance insures a piece of commercial real property owned by Cannon Ranch Partners, Inc. The Cannon Ranch policy includes coverage for sinkhole damage. On August 14, 2012, Cannon Ranch discovered structural damage on its property and subsequently filed a claim with Cincinnati Insurance. Cincinnati Insurance sent a letter to Cannon Ranch confirming the receipt of the claim and advising that an investigator would inspect Cannon Ranch's property to determine the cause of the damage. The investigator hired by Cincinnati Insurance, AMEC Environmental and Infrastructure, determined that the damage was caused by a sinkhole. AMEC recommended that perimeter compaction grout and shallow chemical grout be applied to remediate the sinkhole activity at a cost of roughly $220,000. AMEC further determined that underpinning was not necessary to repair Cannon Ranch's property.
Cincinnati Insurance provided AMEC's report to Cannon Ranch. After reviewing AMEC's report, Cannon Ranch contacted Cincinnati Insurance to express concern that AMEC did not include underpinning in its repair recommendation and that AMEC was biased in its investigation because it had been hired by Cincinnati Insurance. In response, Cincinnati Insurance offered Cannon Ranch the opportunity to nominate a list of five investigators, one of which would be chosen by Cincinnati Insurance to conduct a second investigation. Using this method, C.E. Odell & Associates was hired to reinspect Cannon Ranch's premises. C.E. Odell conducted a survey and determined that underpinning was necessary in addition to the grouting procedure recommended by AMEC, and it estimated that the repairs would cost approximately $495,945.
At Cincinnati Insurance's insistence, a third company, Geohazards, conducted a peer review of the reports from both AMEC and C.E. Odell. Geohazards determined that underpinning was not necessary and furthermore that AMEC's testing was insufficient to establish that even shallow chemical grout was required to restore the property to its pre-sinkhole state.
Following its receipt of these divergent reports, Cannon Ranch entered into a contract with RAB Foundation Repair LLC to perform repairs, including underpinning, on the property consistent with the recommendations of C.E. Odell at an estimated cost of $566,755. However, according to its terms, the contract was contingent on Cincinnati Insurance's approval. Not unexpectedly, Cincinnati Insurance refused to approve the contract because the repairs were not based on the recommendations of AMEC or Geohazards. Instead, Cincinnati Insurance sent a letter to Cannon Ranch demanding an appraisal of the damage and citing the following provision from paragraph 2, Section D of the insurance policy:
(Emphasis added.) Cannon Ranch refused to participate in the appraisal process and brought suit against Cincinnati Insurance for breach of contract. Cincinnati Insurance subsequently filed its motion to abate the litigation and compel appraisal.
At the hearing on the motion, Cincinnati Insurance argued that the disagreement on the appropriate method of repair and the estimated costs of restoration was a dispute over the amount of “loss” that was subject to...
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