People's Trust Ins. Co. v. Vidal

• Decision Date: 13 May 2020
• Docket Number: No. 3D19-930,3D19-930
• Citation: 305 So.3d 710
• Parties: PEOPLE'S TRUST INSURANCE COMPANY, Appellant, v. Nicole VIDAL and Sergio Serrano, Appellees.
• Court: Florida District Court of Appeals

305 So.3d 710

PEOPLE'S TRUST INSURANCE COMPANY, Appellant,

v.Nicole VIDAL and Sergio Serrano, Appellees.

No. 3D19-930

District Court of Appeal of Florida, Third District.

Opinion filed May 13, 2020.

Cole, Scott & Kissane, P.A., and Mark D. Tinker (Tampa), for appellant.

Alonso & Perez, LLP, and Rafael F. Alonso, for appellees.

Before SALTER, SCALES and MILLER, JJ.

SCALES, J.

People's Trust Insurance Company, the defendant below, seeks review of the trial court's April 10, 2019 non-final order denying its motion to compel appraisal of a covered claim under a homeowner's insurance policy issued to the plaintiffs below, Nicole Vidal and Sergio Serrano ("Insureds"). Because, under the particular facts and circumstances of this case, the trial court erred in finding that People's Trust waived its right to appraisal, we reverse and remand for further proceedings.

I. RELEVANT FACTS AND PROCEDURAL BACKGROUND

A. Insureds’ insurance policy

People's Trust issued a homeowners’ insurance policy covering Insureds’ Miami home for the policy period of September 25, 2016 through September 25, 2017. In return for a premium discount, the subject policy contained a Preferred Contractor Endorsement. The endorsement allowed People's Trust, after inspecting a loss, to elect to have its own contractor, Rapid Response Team, LLC, repair Insureds’ damages in lieu of issuing a loss payment that would otherwise be due under the policy. The endorsement required that People's Trust notify Insureds of its election of the right to repair within thirty days of its inspection of a reported loss. The endorsement also contained an appraisal clause that provided, in relevant part:

Where "we" elect to repair:

1. If "you" and "we" fail to agree on the amount of loss, which includes the scope of repairs, either may demand an appraisal as to the amount of loss and the scope of repairs. In this event, each party will choose a competent appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire.... The appraisers will separately set the amount of loss and scope of repairs. If the appraisers submit a written report of an agreement to "us", the amount of loss and scope of repairs agreed upon will be the amount of loss and scope of repairs. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss and the scope of repairs. ....

B. Insureds’ policy claim

Insureds’ home suffered water damage due to Hurricane Irma on September 10, 2017, and they notified People's Trust of the loss. People's Trust's field adjuster inspected Insureds’ home on December 13, 2017, and, the next day, prepared an Estimate and Scope of Repairs. The field adjuster's report estimated that the cost of repairing the damage to Insureds’ home was $39,208.58, well above the policy's $4,738 deductible.

At some point, Insureds retained legal counsel to represent them in pursuing their insurance claim. On December 16, 2017, People's Trust sent Insureds’ attorney a letter notifying Insureds that their loss was covered and that, pursuant to the Preferred Contractor Endorsement, People's Trust "has elected to use its preferred contractor, Rapid Response Team, LLC., ... to repair your property to its pre-loss condition by making repairs to all covered damages." The December 16, 2017 letter notified Insureds that if they disagreed with the scope of repairs set forth in the Estimate and Scope of Repairs, Insureds should provide People's Trust with their own repair estimate. The December 16, 2017 letter further informed Insureds that if, after receipt of Insureds’ repair estimate, there was continued disagreement as to the scope of repairs, then "either of us may submit the scope difference to an appraisal process" under the appraisal provision of the Preferred Contractor Endorsement. Attached to the December 16, 2017 letter were People's Trust's Estimate and Scope of Repairs, a copy of the Preferred Contractor Endorsement and a work authorization form.

Insureds did not sign the work authorization form. Instead, Insureds, through their attorney, provided People's Trust with a Sworn Statement in Proof of Loss, dated February 15, 2018, that estimated the net amount of their claim against the policy was $112,430.25.¹ On March 20, 2018, People's Trust sent Insureds’ attorney a letter acknowledging receipt of the Sworn Statement in Proof of Loss and, because there was a disagreement as to the scope of repairs, demanding an appraisal pursuant to the appraisal clause set forth in the Preferred Contractor Endorsement.

C. The instant litigation

On March 6, 2018, Insured Nicole Vidal² filed the instant breach of contract action against People's Trust.³ Insureds’ amended complaint alleged, among other things, that People's Trust had failed to: (i) accept or deny coverage for their loss; (ii) properly investigate and/or evaluate the nature and extent of their loss; and (iii) make any payments on the amounts due on their claim.

On April 3, 2018, People's Trust filed, in the same pleading, its answer, affirmative defenses and counterclaims against Insureds. As its second affirmative defense, People's Trust asserted a coverage defense, claiming that the breach of contract action was barred because Insureds had failed to participate in appraisal as required by the Preferred Contractor Endorsement. As its fourth affirmative defense, People's Trust asserted another coverage defense, claiming that Insureds’ failure to participate in the appraisal process was a material breach of the policy.

People's Trust's counterclaims set forth claims for injunctive relief/specific performance (count I), breach of contract (count II), and declaratory relief (count III). While count II sought to void coverage, both counts I and III sought, in the alternative, Insureds’ compliance with the Preferred Contractor Endorsement. Specifically, People's Trust demanded both that Insureds participate in the appraisal process and that People's Trust's selected subcontractor (Rapid Response Team, LLC) be permitted to make the repairs to Insureds’ home.

On July 31, 2018, Insureds filed their answer and affirmative defenses to People's Trust's counterclaims. Therein, Insureds denied many of the counterclaims’ general allegations with respect to the Preferred Contractor Endorsement and People's Trust's invocation of the appraisal process. Insureds’ pleading also set forth several affirmative defenses as to why the Preferred Contractor Endorsement and the appraisal provision contained therein are unenforceable.

On October 29, 2018, People's Trust filed an omnibus motion seeking, among other things, to compel appraisal. On March 19, 2019, Insureds filed a response arguing that People's Trust's demand for appraisal was untimely and that People's Trust had waived appraisal by failing to demand appraisal as an affirmative defense to the original complaint, by filing a counterclaim (count II for breach of contract) seeking to void coverage, and by otherwise participating in the litigation.

The trial court docket reflects that, on April 10, 2019, the trial court held a hearing on People's Trust's omnibus motion during its five-minute motion calendar. There is no hearing transcript. Following the hearing, the trial court entered an order denying People's Trust's motion to compel appraisal. The order says simply, "Defendant's Motion to Compel Appraisal is denied based on Court's determination that Defendant's right to appraisal has been waived by Defendant actively litigating this case." People's Trust appeals this non-final order. We have jurisdiction. See Fla. R. App. P. 9.130(a)(3)(C)(iv).

II. ANALYSIS⁴

A. Waiver based on affirmative defenses

Insureds first argue that People's Trust waived the right to compel appraisal by not invoking its appraisal right as an affirmative defense. In general, where an insured files a first party breach of contract action against an insurer and the insurer fails to either (i) immediately move to compel appraisal, or (ii) seek to invoke its right to appraisal as an affirmative defense in its first responsive pleading, the insurer will, because of the insurer's active litigation of the case, be deemed to have waived its right to seek appraisal. See Castilla, 18 So. 3d at 705 (concluding the insurer did not waive its right to seek appraisal by actively participating in the litigation where, after moving unsuccessfully to dismiss the insureds’ complaint, insurer raised its right to appraisal under an insurance policy as an affirmative defense); Gonzalez v. State Farm Fire & Cas. Co., 805 So. 2d 814, 817 (Fla. 3d DCA 2000) (concluding that State Farm did not waive its right to seek appraisal by actively participating in the litigation where, within thirty days after the homeowner's filed suit, "State Farm promptly answered and in the answer, demanded appraisal"); Gray Mart, Inc. v. Fireman's Fund Ins. Co., 703 So. 2d 1170, 1171 (Fla. 3d DCA 1997) (determining that "[Insurer] waived its right to an appraisal by actively and aggressively litigating this cause for over fourteen months and not demanding an appraisal until approximately one month prior to the scheduled trial"). While People's Trust did not seek to invoke its right to appraisal as an affirmative defense in response to Insureds’ complaint,⁵ People's Trust did, in the same pleading containing its affirmative defenses, assert two counterclaims expressly seeking Insureds’ compliance with the appraisal provision. Specifically, People Trust's claims for injunctive relief/specific performance (count I) and for declaratory relief (count III) sought, in part, Insureds’ compliance with the appraisal demand People's Trust had earlier made in its March 20, 2018 letter. Because People's Trust invoked its right to appraisal in its first responsive pleading, we conclude People's Trust did not waive the right to seek appraisal by actively litigating the case. See Casti...