Certain Underwriters at Lloyd’s v. Lago Grande 5-D Condo. Ass’n, Inc.

By: David A. Mervine

Certain Underwriters at Lloyd’s v. Lago Grande 5-D Condo. Ass’n, Inc., No. 3D21-636, 2022 WL 1397382 (Fla. Ct. App. May 4, 2022).

This matter came before the appellate court on appeal from the Trial Court Order Compelling Appraisal of a loss arising from Hurricane Irma submitted by the Lago Grande 5-D Condominium Association.  After an investigation, the insurer determined that exterior damages were covered but the interior water damages were not. The insurer sent a letter explaining its coverage decision along with an engineer’s report and a check for the covered damages in June 2019. The insurer cited the policy provision excluding wear and tear and lack of maintenance, coupled with wind driven rain for the denied interior portion of the claim.

The insured did not respond to the letter until ten months later when a two-count lawsuit was filed for declaratory relief and breach of contract. The insurer filed a motion to dismiss and opposed appraisal given the failure to comply with post-loss obligations. Plaintiff filed a motion to compel appraisal.

Under U.S. Fid. & Guar. Co. v. Romay, 744 So. 2d 467 (Fla. 3d DCA 1999), and its progeny,  appraisal is ripe once post-loss conditions are met, the insurer has reasonable opportunity to investigate and adjust, and there is a disagreement as to the value of the property or amount of the loss. The Plaintiff argued that Romay did not apply because the insurer “ was able to come to a determination of the alleged amount of the Loss through its investigation when it found coverage to the exterior damages to the Property and denied coverage for the interior damages.” The Court found Romay to be controlling and that because the parties did not engage in meaningful exchange sufficient to establish a disagreement regarding the value of the property or amount of the loss appraisal is premature.

The insured’s only response to the insurer’s coverage-determination letter was to file a lawsuit. The insured did not provide a competing estimate, demand additional payment, or  express disagreement with the insurer’s coverage determination. The parties never engaged in a meaningful exchange of information sufficient to establish a genuine disagreement over the amount of loss, and therefore the matter was not ripe for appraisal.

The appellate court reversed the Order of the trial court, and the matter was remanded for further proceedings.

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