Progressive Am. Ins. Co. v. Glassmetics, LLC

• Decision Date: 20 May 2022
• Docket Number: 2D21-488
• Citation: 343 So.3d 613
• Parties: PROGRESSIVE AMERICAN INSURANCE COMPANY, Appellant, v. GLASSMETICS, LLC, a/a/o Devan Hammond, Appellee.
• Court: Florida District Court of Appeals

343 So.3d 613

PROGRESSIVE AMERICAN INSURANCE COMPANY, Appellant,

v.GLASSMETICS, LLC, a/a/o Devan Hammond, Appellee.

No. 2D21-488

District Court of Appeal of Florida, Second District.

May 20, 2022

Alexandra Valdes and Kurt T. Koehler of Cole, Scott & Kissane, P.A., Miami, for Appellant.

David M. Caldevilla of de la Parte & Gilbert, P.A., Tampa; Anthony T. Prieto of Morgan & Morgan, P.A., Tampa; and Christopher P. Calkin and Mike N. Koulianos of The Law Offices of Christopher P. Calkin, P.A., Tampa, for Appellee.

SILBERMAN, Judge.

Glassmetics, LLC, a/a/o Devan Hammond, filed a small claims lawsuit in county court against Progressive American Insurance Company for the alleged underpayment of an insurance claim for repair of a damaged windshield.Progressive now challenges a nonfinal order that denies Progressive's amended motion to dismiss or, alternatively, motion to abate or stay and motion to compel appraisal.

The trial court refused to enforce the insurance policy's appraisal provision on a number of grounds, and Progressive raises multiple issues on appeal.¹We reverse the order because the trial court erroneously determined (1) that the appraisal provision was against the public policy underlying section 627.428, Florida Statutes(2016);(2) that the appraisal provision failed to provide sufficient procedures and methodologies; (3) that Progressive waived its appraisal right; (4) that the appraisal provision was unenforceable because Progressive failed to prove that the insured knowingly, voluntarily, and intelligently waived his rights of access to courts, to a jury trial, and to due process; and (5) that the appraisal provision contains an ambiguity.In light of our conclusions, we remand for further proceedings consistent with this opinion.

I.FACTS AND PROCEDURAL HISTORY

This case involves a Progressive policy issued to Frank Hammond as the named insured.Devan Hammond is listed as a driver and resident relative.The effective date of the policy is September 16, 2016.The appraisal provision provides:

If we cannot agree with you on the amount of a loss, then we or you may demand an appraisal of the loss.Within 30 days of any demand for an appraisal, each party shall appoint a competent and impartial appraiser and shall notify the other party of that appraiser's identity.The appraisers will determine the amount of loss.If they fail to agree, the disagreement will be submitted to an impartial umpire chosen by the appraisers, who is both competent and a qualified expert in the subject matter.If the two appraisers are unable to agree upon an umpire within 15 days, we or you may request that a judge of a court of record, in the county where you reside, select an umpire.The appraisers and umpire will determine the amount of loss.The amount of loss agreed to by both appraisers, or by one appraiser and the umpire, will be binding.You will pay your appraiser's fees and expenses.We will pay our appraiser's fees and expenses.All other expenses of the appraisal, including payment of the umpire if one is selected, will be shared equally between us and you .Neither we nor you waive any rights under this policy by agreeing to an appraisal.

Devan had Glassmetics repair a damaged windshield and assigned to Glassmetics his right to payment under the policy.On December 1, 2016, Glassmetics sent an invoice for $187.25 to Progressive.On December 12, 2016, Progressive issued a check for $64.20.After cashing the check, Glassmetics filed suit in county court on December 27, 2016, and alleged that Progressive had breached the insurance policy by failing to pay the full value of benefits under the policy.On February 16, 2017, Progressive filed a notice invoking the appraisal provision and its motion to dismiss or alternatively to stay and enforce appraisal.Glassmetics amended its complaint, and Progressive filed its amended motion to dismiss or, alternatively, motion to abate or stay and motion to compel appraisal (the amended motion).

The trial court conducted a nonevidentiary hearing on the amended motion.In the order now on appeal, the court noted that Progressive had filed a copy of a presuit letter dated December 8, 2016, invoking its right to appraisal.The court found that a disputed issue of fact remained as to whether Progressive actually mailed or delivered the letter and properly invoked the appraisal provision before Glassmetics filed suit.The court then determined that apart from the presuit issue, Progressive waived its right to compel appraisal by challenging Glassmetics' standing in the amended motion, even though in that motion Progressive sought, in the alternative, to compel appraisal.The court then ruled that the appraisal provision was invalid because it violated the public policy underlying section 627.428 that provides for an award of attorney's fees to a prevailing insured.The court also ruled that the provision was invalid and unenforceable because it lacks procedures and methodologies to govern the appraisal process.

Further, the trial court ruled that the appraisal provision was ambiguous based on its view that the retained rights clause conflicts with the language that the determination of the amount of loss would be binding.The trial court construed the retained rights clause as preserving an "[i]nsured's contractual right to insist upon receiving full payment up to the maximum amount allowable" under the policy notwithstanding the provision that the appraisal determination would be binding.

Although in its order the trial court stated that it was denying Progressive's motion to compel appraisal without prejudice, the order was in effect a denial with prejudice because the court found the appraisal provision to be invalid and unenforceable.As a result, Progressive was precluded from invoking its contractual right to an appraisal.²

Progressive originally sought certiorari review of the order denying its right to an appraisal in the circuit court.The case was subsequently transferred to this court after the change in appellate jurisdiction.Seech. 2020-61, § 3, Laws of Fla.(effective Jan. 1, 2021).This court has jurisdiction of this appeal from a nonfinal order that determined Progressive's entitlement to appraisal under the insurance policy.Seeart. V, § 4(b)(1), Fla. Const.;Fla. R. App. P. 9.030(b)(1)(B);Fla. R. App. P. 9.130(a)(3)(C)(iv);Progressive Am. Ins. v. Broward Ins. Recovery Ctr., LLC , 322 So. 3d 103, 104(Fla. 4th DCA2021)(citingMallory v. Brinckerhoff , 312 So. 3d 944(Fla. 4th DCA2021) ).

II.ANALYSIS

A.Public policy and section 627.428

Progressive contends that the trial court erred in concluding that the appraisal provision violates the public policy underlying section 627.428.We agree.

In making this argument, Progressive asserts that it invoked appraisal via the letter of December 8, 2016, before Glassmetics filed suit.The trial court correctly recognized that Progressive needed to show the letter was sent but failed to do so.However, the court found that Progressive invoked the appraisal "process during the lawsuit by virtue of its alternative motion to compel appraisal."

The trial court determined that the appraisal provision violated public policy based on section 627.428, which provides insureds with an award of attorney's fees when they obtain a judgment against an insurance company that underpaid a claim.Section 627.428(1), provides as follows:

(1) Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured's or beneficiary's attorney prosecuting the suit in which the recovery is had.

Section 627.428's purpose "is to discourage the contesting of valid claims against insurance companies and to reimburse successful insureds for their attorney's fees when they are compelled to defend or sue to enforce their insurance contracts."Ins. Co. of N. Am. v. Lexow , 602 So. 2d 528, 531(Fla.1992).In addition to discouraging insurers "from withholding benefits on valid claims,"the statute further serves to "make an already financially burdened insured whole again."Johnson v. Omega Ins. , 200 So. 3d 1207, 1209(Fla.2016).But section 627.428 also "discourage[s] litigation and encourage[s] prompt disposition of valid insurance claims without litigation."Goff v. State Farm Fla. Ins. , 999 So. 2d 684, 688(Fla. 2d DCA2008)(alterations in original)(quotingJerkins v. USF & G Specialty Ins. , 982 So. 2d 15, 17(Fla. 5th DCA2008) ).

Under section 627.428, "an incorrect denial of benefits, followed by a judgment or its equivalent of payment in favor of the insured, is sufficient for an insured to recover attorney's fees."Johnson , 200 So. 3d at 1219;see alsoBarreto v. United Servs. Auto. Ass'n , 82 So. 3d 159, 162(Fla. 4th DCA2012)("Here, because the insurer paid the full amounts claimed only after suit was filed, it essentially confessed judgment.")."It is only when the claims adjusting process breaks down and the parties are no longer working to resolve the claim within the contract, but are actually taking steps that breach the contract, that the insured may be entitled to an award [of] fees under section 627.428."Hill v. State Farm Fla. Ins. , 35 So. 3d 956, 960(Fla. 2d DCA2010);see alsoGoldman v. United Servs. Auto. Ass'n , 244 So. 3d 310, 311(Fla. 4th DCA2018)(quotingHill , 35 So. 3d at 960 ).The right to a fee award "turns upon whether the filing of the suit served a legitimate purpose."Barreto , 82 So. 3d at 162(quotingLewis v. Universal Prop. & Cas. Ins. , 13 So. 3d 1079, 1082(Fla. 4th DCA2009) ).

For instance, in Goff...