Am. Coastal Ins. Co. v. Villas of Suntree Homeowners Ass’n, Inc.

By: Allison J. Van Fleet

No. 5D21-1354, 2022 WL 1814253 (5th DCA 06/03/2022)

(District Court of Appeal of Florida, Fifth District)

The Fifth District Court of Appeals addressed whether a trial court may compel appraisal on the insured’s initial and supplemental claims before the insurer’s determination of coverage of the entire claim. The Fifth District held that a trial court may compel appraisal in the trial court’s discretion (“dual-track approach”) if the insured has satisfied their post-loss obligations and the insurer has not denied coverage.

Following Hurricane Irma, Suntree filed a claim for alleged wind damage to the roofs of certain buildings of the property. The insurer ACIC paid $373.40 for the wind damage that exceeded the per-building deductible on one building. More than two years later, Suntree, through counsel, filed a supplemental claim for Hurricane Irma, adding to its claim windows, doors, and more roofs. Suntree’s attorney sent a sworn proof of loss, a damage estimate, photographs, and a hyperlink to 2,036 pages of documents supposedly related to the claim. ACIC said it could not access the documents due to a defect in the hyperlink, and Suntree’s attorney again sent what appeared to be the same hyperlink. Afterwards, ACIC issued an additional payment of $738,598.63 to Suntree for undisputed damage, and advised that it was continuing the investigation of the remainder of the claim. ACIC sent a second follow-up request seeking documentation. Suntree’s counsel then provided ACIC with a hyperlink to a Dropbox account. ACIC was finally able to review the documents, but claimed that it was not provided with all the documentation it had requested, without stating the specific documents lacking, but stating that it could not make a coverage determination on the remainder of the claim without the requested documentation.

The lawsuit followed, in which Suntree moved to compel appraisal. An evidentiary hearing proceeded to determine whether Suntree had complied with it post loss duties, which was required prior to appraisal. The parties stipulated that the documents attached to Suntree’s Motion would be admitted as evidence. Without making specific fac findings in its order, the trial court granted Suntree’s Motion to Compel Appraisal and ACIC appealed.

First, the Fifth District rejected ACIC’s argument that the trial court must include specific fact findings in the order compelling appraisal, as it found no statutes or rules of civil procedure requiring specific factual findings for appraisal. Second, the Fifth Circuit consider whether the appraisal was premature given ACIC’s assertion that it could not make a coverage determination on the remainder of the claim without the additional documentation. Disagreement exists between the appellate courts on the sequence in which a trial court should resolve appraisal and coverage issues. The Second and Third Districts have adopted the “dual track approach,” but the Fourth District has held a trial court must resolve all underlying coverage issues before ordering appraisal where the insurer wholly denies coverage.

The Fifth District recognized that it had not previously taken a position directly on the issue. The Court had merely held that appraisal is appropriate where an insurer did not wholly deny

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