Johnson v. Nationwide Mut. Ins. Co.
Decision Date | 26 September 2002 |
Docket Number | No. SC01-91, No. SC01-321. |
Citation | 828 So.2d 1021 |
Parties | Peter JOHNSON and Christine Johnson, Petitioners, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Respondent. State Farm Fire and Casualty Company, Petitioner, v. Mariano R. Gonzalez and Rene Gonzalez, Respondents. |
Court | Florida Supreme Court |
George A. Vaka of Vaka, Larson & Johnson, P.L., Tampa, FL, and Alan S. Marshall and Craig A. LeValley of Marshall & LeValley, P.L., Palm Harbor, FL; and William S. Berk of Adorno & Zeder, P.A., and Richard A. Warren of Hardeman & Suarez, P.A., Miami, Florida, for Petitioners.
W. Douglas Berry and Anthony J. Russo of Butler Burnette Pappas, Tampa, FL; and Linda Spaulding White and Douglas T. Marx of Conrad & Sherer, LLP, Fort Lauderdale, FL, for Respondents.
We have for review Nationwide Mutual Insurance Co. v. Johnson, 774 So.2d 779 (Fla. 2d DCA 2000), and Gonzalez v. State Farm Fire & Casualty Co., 805 So.2d 814 (Fla. 3d DCA 2000), which expressly and directly conflict on the issue of whether causation is a coverage question for the court or an amount of loss question for the appraisal panel when the insurer wholly denies that there is a covered loss.1 We have jurisdiction. See art. V, § 3(b)(3), Fla. Const. We quash Johnson, approve Gonzalez, and hold 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.
The relevant facts of the Johnson case are set forth in the district court opinion.
Nationwide issued a property insurance policy to the Johnsons on residential property they own and rent to others in Pasco County. The Johnsons reported damage to the property to Nationwide, and Nationwide's subsequent investigation determined that the damage was not the result of a covered cause of loss. The Johnsons contend that their loss was caused by a sinkhole, a covered peril, while Nationwide contends that the loss was caused by earth movement, an excluded cause. The Johnsons instituted this lawsuit for breach of the insurance contract. In response, Nationwide filed a motion to stay the trial court proceedings and sought to invoke its right to appraisal of the amount of loss as provided in the policy. Following a hearing on the motion, the trial court held that it would determine the issue of whether there was a covered loss and then have the appraisal panel determine the dollar amount of the loss.
Johnson, 774 So.2d at 780 (footnote omitted). The appraisal clause in Nationwide's policy provided:
Id. at 780 n. 1. Nationwide filed an interlocutory appeal, and the Second District "reverse[d] the trial court's order denying the motion to stay in favor of appraisal and remand[ed] with directions to allow the appraisal to proceed." Id. at 780.
The court relied on State Farm Fire & Casualty Co. v. Licea, 685 So.2d 1285 (Fla. 1996), and Florida Select Insurance Co. v. Keelean, 727 So.2d 1131 (Fla. 2d DCA 1999), in holding that "causation is an amount of loss issue for the appraisal panel." Johnson, 774 So.2d at 781. The court recognized that coverage issues are exclusively judicial questions but found that "Licea and Keelean lead us to the conclusion that a factual determination of whether the loss here was caused by a sinkhole or earth movement is an inquiry for the appraisal panel." Id. The court then stated that the First District's decision in Opar v. Allstate Insurance Co., 751 So.2d 758 (Fla. 1st DCA), review denied, 767 So.2d 459 (Fla.2000), appears to conflict with the Johnson and Keelean decisions. See Johnson, 774 So.2d at 781
.
The relevant facts of the Gonzalez case are also set forth in the district court opinion:
Gonzalez, 805 So.2d at 815 (footnote omitted). The appraisal clause stated:
6. Appraisal. If you and we fail to agree on the amount of loss, either one can demand that the amount of loss be set by appraisal. If either makes a written demand for appraisal, each shall select a competent, independent appraiser. Each shall notify the other of the appraiser's identity within 20 days of receipt of the written demand. The two appraisers shall then select a competent, impartial umpire. If the two appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the residence premises is located to select an umpire. The appraisers shall then set the amount of the loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon shall be the amount of the loss. If the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two of these three shall set the amount of the loss. Each appraiser shall be paid by the party selecting that appraiser. Other expenses of the appraisal and the compensation of the umpire shall be paid equally by you and us.
The Third District reversed and remanded the trial court's final judgment, concluding "that the appraisers impermissibly decided whether the entire claim was within the coverage of the insurance policy." Id. at 815. The Third District, quoting Licea, reiterated that coverage issues are exclusively judicial questions. See id. at 816. Because State Farm's initial defense to the claim was that there was no coverage whatsoever, the Third District found that the Licea statements regarding appraisers deciding causation did not apply. See id. at 817.
The conflicting decisions of Johnson and Gonzalez cite this Court's decision in Licea to support their holdings. The issue in Licea, however, was not the issue that is presented in Johnson or Gonzalez. In Licea, this Court addressed whether an appraisal clause was void for lack of mutuality of obligation. See Licea, 685 So.2d at 1286
. This Court held that the clause was not void for lack of mutuality simply because the clause had a retained rights clause.2
See id. at 1289. Relying on Judge Cope's dissent in American Reliance Insurance Co. v. Village Homes at Country Walk, 632 So.2d 106 (Fla. 3d DCA 1994), this Court found that the purpose of the retained rights clause was "to state, quite simply, that if the insured requests appraisal and the insurer proceeds with the appraisal process, the insurer has not thereby abandoned any coverage defenses which may be available to it." Licea, 685 So.2d at 1287 (quoting Village Homes, 632 So.2d at 108 (Cope, J., dissenting)).
Thus, the Licea decision resolved the issue of whether an appraisal provision lacked mutuality by including a retained rights provision. See id. at 1289. In Licea, this Court addressed the appraisal process by stating:
Licea, 685 So.2d at 1287-88 (omission in original). This part of the Licea opinion is the focus of the conflict between the Johnson and Gonzalez cases with respect to the appraisal panel's role in determining the amount of loss. We resolve this conflict by again adopting an analysis of...
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