A Florida court has reversed a lower court's decision regarding an insurance appraisal dispute involving People’s Trust Insurance Company and homeowners Nicole Vidal and Sergio Serrano. The Third District Court of Appeal ruled that the insurance company did not waive its right to compel an appraisal of a claim related to water damage caused by Hurricane Irma. This ruling could have significant implications for homeowners and insurance companies navigating similar disputes.
The case, titled People’s Trust Insurance Company v. Nicole Vidal and Sergio Serrano, was filed under docket number 3D19-0930. The appeal arose from a non-final order issued by the Circuit Court for Miami-Dade County on April 10, 2019, which denied People’s Trust's motion to compel appraisal. The court's decision to reverse the lower court's ruling means that the appraisal process can now proceed.
Background
People’s Trust Insurance Company issued a homeowners' insurance policy to Nicole Vidal and Sergio Serrano covering their home in Miami from September 25, 2016, to September 25, 2017. The policy included a Preferred Contractor Endorsement, which allowed the insurance company to choose a contractor to repair damages instead of issuing a payment for the loss. This endorsement also contained an appraisal clause, allowing either party to demand an appraisal if they disagreed on the amount of loss or scope of repairs.
The homeowners reported significant water damage to their property due to Hurricane Irma on September 10, 2017. Following an inspection by People’s Trust’s field adjuster, the company estimated the repair costs to be over $39,000, exceeding the homeowners' deductible of $4,738. After the adjuster’s report, People’s Trust informed the Serranos that they would use their preferred contractor to make the necessary repairs. However, the Serranos did not sign the work authorization and instead submitted a Sworn Statement in Proof of Loss, claiming over $112,000 in damages.
In response to the Serranos' claim, People’s Trust filed a counterclaim and sought to compel appraisal, arguing that the homeowners had not participated in the appraisal process as required by the policy. The Serranos countered that the insurance company had waived its right to appraisal by not asserting it as an affirmative defense in their initial response to the lawsuit.
The Ruling
The Third District Court of Appeal, with Judges Salter, Scales, and Miller presiding, ruled that the trial court erred in concluding that People’s Trust had waived its right to compel appraisal. The court stated, "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." The appellate court found that People’s Trust had invoked its right to appraisal in its first responsive pleading, which included counterclaims that sought compliance with the appraisal provision.
The court also determined that the appraisal demand made by People’s Trust was timely, as it was sent before the company was officially notified of the lawsuit. The appellate ruling emphasized that the lower court's decision to deny the motion to compel appraisal was based on an incorrect interpretation of waiver and timing.
Impact
This ruling has significant implications for both homeowners and insurance companies. It clarifies that an insurance company can still demand an appraisal even after engaging in litigation, as long as it asserts its appraisal rights in a timely manner. The decision reinforces the importance of adhering to the specific terms outlined in insurance policies, particularly regarding appraisal clauses.
Homeowners facing disputes with their insurance companies may find this ruling encouraging, as it affirms their rights under appraisal provisions. Conversely, insurance companies may need to be more vigilant in asserting their rights to appraisal to avoid waiving them through litigation actions. This case may set a precedent for future disputes involving appraisal clauses in insurance policies.
What's Next
The case has been remanded to the lower court for reconsideration of People’s Trust’s motion to compel appraisal. The trial court will have the discretion to determine the order in which coverage issues and appraisal will be addressed. It is unclear if the Serranos will appeal this ruling or if there are related cases pending.