Universal Property & Casualty Ins. Co. v. Monika Horne

By: Jennifer N. Myers

2021 WL 191546 (Fla. 3d DCA Jan. 20, 2021)

This case involved post-loss compliance with an insured’s policy obligations. When the insured’s public adjuster initially reported the claim (on the same day as the loss), Universal sent a letter requesting eleven items per the policy’s post-loss provisions.  One such request was for a sworn proof of loss in sixty days. The public adjuster responded with several items such as photographs and an estimate. Without receiving the requested sworn proof of loss, Universal accepted coverage, with there being a disagreement on the amount of damages due under the policy. Suit was filed in response.

Universal asserted the insured’s failure to provide a sworn proof of loss as requested was a defense to payment. Four months after the original request for a sworn proof of loss, and after suit was filed, Horne complete one in the amount of the estimate previously provided by her public adjuster, which was substantially more than amount of Universal’s valuation of the claim.

Universal moved for summary judgment, which the Trial Court denied, finding Universal had waived the policy requirement through payment, that there was substantial compliance as a sworn proof of loss was eventually provided, and that Universal was not prejudiced under these circumstances. The jury awarded Horne damages for breach of contract, agreeing that Universal’s estimate was not sufficient. Universal appealed, arguing that its motion for summary judgment on the sworn proof of loss issue was not decided correctly.

The Appellate Court first ruled that Florida Statute §627.426(1)(c)(2007) was applicable.  This statute provides that “(1) Without limitation of any right or defense of an insurer otherwise, none of the following acts by or on behalf of an insurer shall be deemed to constitute a waiver of any provision of a policy or of any defense of the insurer thereunder:  (c) investigating any loss or claim under any policy or engaging in negotiations looking toward a possible settlement of any such loss or claim.” As such, “the lower court’s conclusion that Universal waived its post-loss affirmative defense by issuing payment to Horne was incorrect.”  Id. at *3.

As for whether Horne forfeited coverage due to her failure to timely submit a sworn proof of loss, the Appellate Court referenced and applied American Integrity Ins. Co. v. Estrada, 276 So. 3d 905 (Fla. 3d DCA 2019). There is a “two-step, ‘if-then’ framework.” When an insurer establishes “than an insured has failed to substantially comply with a contractually mandated post-loss obligation, prejudice to the insurer from the insured’s material breach is presumed, and the burden then shifts to the insured to show that any breach of post-loss obligations did not prejudice the insurer.” Id. at *4, quoting Estrada, 276 So. 3d at 916

The lower court’s ruling was reversed so the parties could “present their cases under the framework established in Estrada”.  Id. at *4.

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