Siegel v. Tower Hill Signature Ins. Co.

• Decision Date: 30 August 2017
• Docket Number: No. 3D16-1861.,3D16-1861.
• Citation: 225 So.3d 974
• Parties: David SIEGEL and Tamara Siegel, Appellants, v. TOWER HILL SIGNATURE INSURANCE COMPANY, Appellee.
• Court: Florida District Court of Appeals

225 So.3d 974

David SIEGEL and Tamara Siegel, Appellants,

v.TOWER HILL SIGNATURE INSURANCE COMPANY, Appellee.

No. 3D16-1861.

District Court of Appeal of Florida, Third District.

Opinion filed August 30, 2017

Mintz Truppman, P.A., and Timothy H. Crutchfield ; Insurance Litigation Group, P.A., and Tracy L. Kramer and John F. Lakin, for appellants.

Kelley Kronenberg and Jorge L. Cruz–Bustillo ; Methe & Rockenbach, P.A., and Kara Berard Rockenbach and David A. Noel (West Palm Beach), for appellee.

Before LOGUE, SCALES and LINDSEY, JJ.

LINDSEY, J.

Insured homeowners David and Tamara Siegel appeal two orders granting final summary judgment in favor of their insurer, Tower Hill Signature Insurance Company. The court below concluded that Tower Hill complied with its policy obligations by paying the Siegels' claim based on its independent adjuster's estimate. The court also determined that the Siegels breached a condition precedent by failing to allow a plumbing inspection before filing suit. Because we find that genuine issues of material fact exist as to (1) Tower Hill's initial payment and (2) the Siegels' post-loss obligation to allow inspection, we reverse.

I. BACKGROUND

On May 15, 2015, a drain line collapsed under the foundation of the Siegels' home. The property was covered under a Tower Hill homeowners' policy and insured at replacement cost value.¹ The Siegels notified Tower Hill of their claim on June 8, 2015, and on June 19, 2015, the property was inspected by Tower Hill's independent adjuster. On August 12, 2015, the Siegels submitted an estimate to Tower Hill prepared by a public adjuster in the amount of $30,716.23 ($33,216.23 minus the $2,500 deductible). Tower Hill then sent a payment letter dated August 17, 2015, informing the Siegels that, based on Tower Hill's current information, the amount of their claim settlement was $4,304.75, which represented the $6,804.75 estimate prepared by Tower Hill's independent adjustor, less the $2,500 deductible. The payment letter advised the Siegels that this amount does not necessarily constitute a full and final settlement of their claim and stated that the Siegels could submit supplemental claims for any damages discovered in the covered reconstruction and repair of the above mentioned property. On August 28, 2015, the Siegels filed suit against Tower Hill for breach of contract, alleging that the $4,304.75 payment was inadequate.

Before Tower Hill was served with the lawsuit, it sent the Siegels two additional letters. In the first letter, dated September 3, 2015, Tower Hill informed the Siegels of their post-loss obligation to show the damaged property as often as reasonably required. Additionally, the letter stated that "Master Plumbing has been requesting inspection of the plumbing system of your home since August 18, 2015. To date, we have not been able to gain access." In another letter, dated September 9, 2015, Tower Hill informed the Siegels that it was rejecting their proof of loss and continuing its investigation. Tower Hill was served on September 10, 2015.

On February 10, 2016, Tower Hill moved for summary judgment, arguing that it had performed as required under the policy, applicable statute, and case law. The motion was supported by an affidavit of Tower Hill's corporate representative, David Polson, with the insurance policy, the estimate prepared by Tower Hill's independent adjustor, and the August 17, 2015 payment letter attached as exhibits. Tower Hill filed a second motion for summary judgment on February 23, 2016, contending that the Siegels were in breach for failing to allow Master Plumbing to inspect their plumbing system prior to filing suit. In support, Tower Hill submitted another affidavit from Mr. Polson attaching the insurance policy, the September 3, 2015 letter, and the September 9, 2015 letter as exhibits. On June 7, 2016, the trial court held a hearing, and subsequently entered two orders granting Tower Hill's motions for summary judgment. After denying the Siegels' motion for rehearing and reconsideration of both of those orders, the trial court entered a final judgment on June 15, 2016. This appeal follows.

II. STANDARD OF REVIEW

The two issues before us are whether genuine issues of material fact exist as to (1) Tower Hill's required initial payment and (2) the Siegels' compliance with the policy's post-loss obligation to allow reasonable inspections. We review the trial court's orders granting final summary judgment de novo . See Save Calusa Trust v. St. Andrews Holdings, Ltd., 193 So.3d 910, 914 (Fla. 3d DCA 2016). Similarly, a trial court's decision construing a contract presents an issue of law subject to de novo review. Flagship Resort Dev. Corp. v. Interval Int'l, Inc., 28 So.3d 915, 920–21 (Fla. 3d DCA 2010) (citing Florida Power Corp. v. City of Casselberry, 793 So.2d 1174, 1178 (Fla. 5th DCA 2001) ).

III. ANALYSIS

Summary judgment is proper under Florida Rule of Civil Procedure 1.510(c) where "the pleadings, depositions, answers to interrogatories, admissions, affidavits, and other materials as would be admissible in evidence on file show that there is no genuine issue as to any material fact." Arce v. Wackenhut Corp., 40 So.3d 813, 815 (Fla. 3d DCA 2010). The movant bears the initial burden of demonstrating the nonexistence of any genuine issue of material fact. Id. (citing Valderrama v. Portfolio Recovery Assocs., LLC, 972 So.2d 239 (Fla. 3d DCA 2007) ). "Once competent evidence to support the motion has been tendered, the opposing party must come forward with admissible counter-evidence sufficient to reveal a genuine issue of material fact." Arce, 40 So.3d at 815 (emphasis in original) (citing Fla. R. Civ. P. 1.510 ; Michel v. Merrill Stevens Dry Dock Co., 554 So.2d 593, 596 (Fla. 3d DCA 1989) ).

A. Tower Hill's Initial Payment

Tower Hill's position is that although the Siegels obtained an estimate that was significantly higher than its initial payment, Tower Hill fully complied with the policy because its payment was based on the estimate prepared by its independent adjuster. In support, Tower Hill relies on Slayton v. Universal Prop. & Cas. Ins. Co., 103 So.3d 934 (Fla. 5th DCA 2012).

As in this case, the underlying action in Slayton was for breach of contract, resulting from a disagreement over claim estimates. Following property damage suffered in a windstorm, Ms. Slayton, the insured homeowner, submitted an estimate prepared by a public adjuster for $61,638.00. Id. at 936. Her insurer paid $27,915.87, which was based on its lower estimate of the cost of repair. Id. The insurer notified Ms. Slayton that she could submit supplemental claims for additional damages "discovered in the covered reconstruction and repair" of her property. Id. Ms. Slayton did not submit any supplemental claims and instead filed suit against her insurer for breach of contract. Id. Despite Ms. Slayton's higher estimate, the Fifth District Court of Appeal upheld entry of a directed verdict in favor of the insurer, finding that the insurer's decision to pay the amount of its estimate was consistent with the unambiguous loss settlement provision in the policy. Id.

Tower Hill argues that Slayton controls and mandates affirmance because the loss settlement provision in this case is "identical" to the provision in Slayton. We disagree. Both loss settlement provisions provide, in pertinent part, as follows:

b. Buildings under Coverage A or B at replacement cost without deduction for depreciation, subject to the following:

(1) If, at the time of loss, the amount of insurance in this policy on the damagedbuilding is 80% or more of the full replacement cost of the building immediately before the loss, we will pay the cost to repair or replace, after application of deductible and without deduction for depreciation, but not more than the least of the following amounts:

(a) The limit of liability under this policy that applies to the building;

(b) The replacement cost of that part of the building damaged for like construction and use on the same premises; or

(c) The necessary amount actually spent to repair or replace the damaged building.

As the Fifth District explained in Slayton, "[t]he insurance provision cited above unambiguously limited [the insurer's] liability for the replacement or repair costs to the lesser of [a] the policy limits, [b] the replacement costs for like construction and use, or [c] the necessary amounts actually spent to repair or replace. " 103 So.3d at 936 (emphasis added). Consequently, an initial payment based on the amount of the insurer's estimate (less deductible) coupled with an allowance for supplemental claims is certainly consistent with the terms of the loss settlement provision, as the Fifth District held in Slayton. Id. However, the analysis does not end there.

Section 627.7011(3)(a), Florida Statutes (2017), sets a minimum amount for initial payments made pursuant to a replacement cost homeowners' policy:

(3) In the event of a loss for which a dwelling or personal property is insured on the basis of replacement costs:

(a) For a dwelling, the insurer must initially pay at least the actual cash value of the insured loss, less any applicable deductible. The insurer shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred. If a total loss of a dwelling occurs, the insurer shall pay the replacement cost coverage without reservation or holdback of any depreciation in value, pursuant to s. 627.702.

(emphasis added). On its face, the current version of the statute requires an initial payment of at least the actual cash value; that is, the replacement cost less depreciation.² This statutory requirement is reflected in an endorsement to the policy before us now:

b. (4) We will initially pay at least the "actual cash value" of the insured loss, less any applicable deductible. We shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses

...