Kelley Kronenberg - In the Know - First-Party Property Appellate - April/May 2024

FIRST-PARTY PROPERTY APPELLATE TEAM

Kimberly J. Fernandes Partner

Tallahassee | Atlanta

T: (850) 577-1301

kfernandes@kklaw.com

Daniel Montgomery Partner

Jacksonville

T: (904) 549-7700

dmontgomery@kklaw.com

ADMISSIONS

For any questions, please contact:

Jeffrey M. Wank

Chair, First-Party Property and Insurance Coverage Division

Fort Lauderdale

T: (954) 370-9970

jwank@kklaw.com

Florida • Georgia • United States Court of Appeal, Eleventh Circuit

SELECTED OPINIONS

w Expert Inspections, LLC d/b/a ITest d/b/a Moldexpert.com a/a/o Pat Beckford v. United Property & Casualty Insurance Company, 333 So.3d 200 (Fla. 4th DCA 2022) (holding that an insurer cannot be required to follow the terms of an AOB contract where the insurer is not a party to that contract).

w The Kidwell Group, LLC d/b/a Air Quality Assessors of Florida a/a/o Maria Amadio v. Olympus Insurance Company, Case No. 5D21-2955 (Fla. 5th DCA July 22, 2022) (interpreting section 627.7152, F.S., as applying to AOB contracts executed after the enactment of the statute, finding the policy inception date irrelevant to the analysis).

w Saunders v. Florida Peninsula Insurance Company, 314 So.3d 592 (Fla. 3d DCA 2020) (interpreting the “faulty workmanship” policy exclusion to include the workmanship process as well as the finished product in affirming the insurer’s denial of a property damage claim).

w The Kidwell Group, LLC d/b/a Air Quality Assessors of Florida a/a/o Benjamin Kivovitz, Case No. 4D21 2843 (Fla. 4th DCA June 15, 2022) (enforcing the new section 627.7152, F.S., requirement of including a line-item estimate with an AOB contract at the time of execution)

ADMISSIONS

Florida • U.S. District Court, Northern District of Florida • U.S. District Court, Middle District of Florida

SELECTED OPINIONS

w Progressive American Insurance Company v. Glassmetics, LLC, No. 2D21-488, 2022 WL 1592154 (Fla. 2d DCA 2022) (“we reverse the trial court’s order and its conclusions (1) that the appraisal provision was against the public policy underlying section 627.428; (2) that the appraisal provision failed to provide sufficient procedures and methodologies; (3) that Progressive waived its appraisal right; (4) that the appraisal provision was unenforceable because Progressive failed to prove that the insured knowingly, voluntarily, and intelligently waived his rights of access to courts, to a jury trial, and to due process; and (5) that the appraisal provision contains an ambiguity.”).

w All Auto Glass v. Progressive American Ins. Co., Case No. 2018-SC-3126, 2019-33-AP (Fla. Seminole Cnty. Appellate Division.) (“reversing trial court, holding ruling of district court of appeal in jurisdiction other than where trial court is located is binding upon trial court absent conflict with another district court of appeal. )

w Progressive Am. Ins. Co. v Broward Ins. Recovery Ctr., LLC, 322 So. 3d 103 (Fla. 4th DCA 2021) (“reversing trial court, holding prohibitive cost doctrine inapplicable to appraisal”).

Universal Property and Casualty Ins. Co. a/s/o Virgilio Perez Y. Perez and Sirkka Perez v. Laguan Rivera Condoiminium Ass’n, Inc., 2D23-34 (Mar. 1, 2024)

Vested Rights

Universal Property and Casualty Ins Co a/s/o Virgilio Perez Y Perez and Sirkka Perez v Laguan Rivera Condoiminium Ass’n, Inc , 2D23-34 (Mar 1, 2024)

KK TAKEAWAY:

A vested right is one of present or present, fixed right of future enjoyment. This is distinct from a future right based upon a future occurrence.

KK TAKEAWAY:

Subrogation rights do not vest until the conditions allow for subrogation.

BACKGROUND:

In July 2021, section 627.714(4) was amended to restrict an insurance policy from subrogation rights against a condominium association unless a condominium

association provides subrogation rights. Universal sought subrogation against Laguan, premised on the issuance of the policy before the statutory amendment.

After the amendment, Universal paid for a pipe burst claim and sought reimbursement. Laguan sought to apply the statutory amendment to preclude the subrogation action. The trial court agreed and granted summary judgment in favor of Laguan.

Universal argued that its right to subrogation is vested upon the policy issuance. However, the Second District Court of Appeal disagreed. Under the policy, the Second District held that subrogation did not vest until Universal paid the claim, which, in this instance, was after the statutory amendment. The right to subrogation was not vested but was contingent on the condition of payment.

The Second District further elaborated that a common law right can be substantively changed by the legislature, thus, it does not vest until the cause of action accrues. In this instance, the payment of the claim by Universal.

Appraisal – Due Process

Homeowners Choice Prop & Casualty Ins Co , v Angus Murry, 3D23-0256 (Mar 27, 2024)

KK TAKEAWAY:

Bilateral appraisal condition requires bilateral agreement.

KK TAKEAWAY:

A party has the due process right to be notified of intent to seek appraisal.

BACKGROUND:

Homeowners Choice appeals a trial court order compelling appraisal based upon a ore tenus motion at a pretrial hearing. The Third District reversed and remanded this order, clarifying that a bilateral appraisal provision requires both parties’ agreement. The trial court cannot go beyond the policy’s language to impose a condition that did not exist.

The Third District also reversed as the trial court violated Homeowners Choice’s due process rights as it showed up for a pretrial hearing with no prior knowledge of addressing appraisal.

Summary Judgment – Limitations on the scope of summary judgment determination

Florida Ins Guaranty Association, v Manuel V FEijoo, M D and Manuel V FEijoo, M D , P A , etc , 3D22-1529 (April 10, 2024)

KK TAKEAWAY:

The trial court cannot grant summary judgment on a claim outside the complaint.

BACKGROUND:

Feijoo filed a complaint for breach of contract for failure to pay PIP benefits and declaratory relief regarding the improper cancelation of the policy. FIGA made a full payment during litigation, and Feijoo sought summary judgment. However, the summary judgment sought a finding that the policy was in effect, that the policy was not void, and that there was no material misrepresentation under the policy. The trial court granted Feijoo’s motion.

The Third District Court of Appeals reversed, holding the Complaint sought a declaration that the policy was not properly canceled, but via summary judgment, sought a determination that the policy was in effect, not void, and had no material misrepresentations. These two positions are contradictive. The claim sought in summary

Summary Judgment – Policy Interpretation

Florida Farm Bureau General Ins Co , v Linda Williams, 5D23-0183 (Apr 9, 2024)

KK TAKEAWAY:

The Court will only interpret ambiguous policy provisions.

KK TAKEAWAY:

A reasonable interpretation will control if the counter is not reasonable.

BACKGROUND:

Florida Farm Bureau appealed the trial court application of an all-perils deductible, claiming the hurricane deductible applied. The National Hurricane Center placed a hurricane watch on Florida’s east coast on Jul. 31, 2020. The Insured suffered a hail loss on Aug. 4, 2020. Florida Farm Bureau issued a claim payment but reduced the claim by the hurricane deductible. After competing summary judgments, the trial court granted the Insured’s summary judgment, finding the hurricane deductible could not apply to the Insured’s hail loss, albeit during the hurricane warning period.

The material issue was the policy’s definition of when the deductible applied “72 hours following the termination of the last hurricane watch.” Both parties agree that the Hurricane did not cause the damage. Insured argued that causation was still the covered event, which would create coverage. Florida Farm argued the deductible was applied as a broad reading of the language that allowed for application during the policy-defined “hurricane period.”

The Fifth District Court of Appeal agreed with the trial court, holding that the Insured’s interpretation was the only reasonable interpretation, but also the only one consistent with the remaining Hurricane deductible section.

Directed Verdict - Notice

Ira Wenzel and Nicole Wenzel, v Homeowners Choice Property & Casualty Ins Co , 4D2023-0088 (April 24, 2023)

KK TAKEAWAY:

After the jury trial, the trial court granted a directed verdict in favor of Homeowners Choice regarding untimely notice after the verdict in favor of the Insured. The Fourth judgment was distinct from the petition. Thus, Feijoo was not entitled to summary judgment on a claim that was never pled.

Prompt notice is generally a question of fact.

BACKGROUND:

District reversed this finding, holding that prompt notice is usually a question of fact. Even five days can be untimely notice and prejudicial, but there is no bright line rule. The evidence submitted to the jury was susceptible to different reasonable inferences.

Evidence –Business Record

Universal Property & Casualty Ins Co , v Luis Nacimiento, 3D23-0301 (April 3, 2021)

KK TAKEAWAY:

Business records can only be verified by corporate representatives for businesses who created records.

KK TAKEAWAY:

Records received by other parties are not business records.

KK TAKEAWAY:

Admission by a party in another claim is not necessarily admission for another claim and, thus, irrelevant.

BACKGROUND:

Universal sought an appeal after a verdict in favor of the Insured. This was a water damage claim arising from a roof leak in 2016. Coverage was opened, and payment was issued. Insured subsequently sued for breach of contract.

During litigation, another claim occurred concerning a bathroom water leak. Insured submitted a sworn proof of loss and estimate. During the litigation in the 2016 roof leak claim, Universal discovered during the deposition that Rafel Leyva, the producer of Insured’s estimate, was unaware of the

2020 bathroom claim when he prepared an updated estimate. Based on his testimony, Universal amended its answer to include an affirmative defense of concealment or fraud.

At trial, Leyva testified that when he inspected the property for the 2016 claim, he was unaware of the 2020 bathroom claim. He admitted that he had removed it from his estimate once he found out. Universal’s corporate representative testified but was precluded from entering the 2021 proof of loss and estimate for the water claim. Universal argued it was a business record, but the trial court determined they were not as Univeral did not create them. The trial court also found the records were not admissions by a party opponent as they were records for another claim., thus not relevant.

The Third District Court of Appeal upheld the trial court, holding that the corporate representative cannot lay the foundation for the business record for records created outside of Univeral. While the person who made the record does not have to tesity, a person with knowledge as to how the record was made. Here, Universal did not show any basis for how it would have such knowledge.

These records were further not relevant to the 2016 claim. The records were submitted only under the 2020 claim. Additionally, Universal was allowed to cross-examine the witness who admitted the estimate, which initially included a portion of the subsequent claim. Under an abuse of discretion standard, there is nothing to support the trial court abused its discretion regarding relevance.

Attorney Fees –Necessary Trial Court Findings

Universal Property & Casualty Ins Co , v Yimi Elis Santos, 3D23-0940 (April 17, 2024)

KK TAKEAWAY:

The trial court must make factual findings specific to determining reasonable fees.

BACKGROUND:

Universal sought an appeal of an attorney fee award of $254,525 in fees for 358.2 hours. Insured submitted affidavits from four attorneys attesting to rates and 388.2 hours worked on the case. Universal’s expert testified the hours and rate sought by the Insured were excessive, seeking a reduction of 182 hours. The Insureds expert at the hearing only referenced a reduction of 30 hours to address the potential for excess without correlating the reasonableness of the rates and time sought. The trial court accepted the Insureds recommended reduction without any specific findings regarding the reasonableness of rates or hours.

The Third District held the 10-hour-perlawyer cut to reach the 30-hour reduction as arbitrary as it did not include specific findings. The Third District reversed and remanded the order for the trial court to conduct an additional evidentiary hearing, allowing for the trial court to consider

Attorney Fees –Defense Fees

USAA Casualty Ins Co , v Health Diagnostics of Fort Lauderdale, LLC, etc , 3D22-2023 (Apr 17, 2024)

KK TAKEAWAY:

PFS does not nullify an alternative fee agreement. The trial court must analyze reasonable fees.

BACKGROUND:

USAA appealed after the trial court entered judgment for a fraction of what USAA sought. The appeal implicated the interplay between an alternative recovery clause and a PFS. During fee discovery, USAA identified a Master Engagement Agreement (MEA) but refused disclosure based on attorney-client privilege. USAA produced a $4,000 fee invoice, but there was no testimony that it was a final invoice. While the trial court agreed with privilege, it allowed a one-time inspection to occur at USAA’s office. The agreement has fee ranges upon certain resolutions, including a prevailing offer of judgment. The trial

court found it was a valid agreement. Health Diagnostics argued that USAA was capped at $4,000, the amount it was invoiced for services because USAA did not introduce the MEA agreement under attorney-client privilege claims. The trial court entered a judgment for fees of $4,000.

The Third District Court of Appeals reversed on four grounds:

1. Regardless of a fee arrangement, the trial court is bound to award reasonable appellate fees during litigation.

2. The trial court found the MEA agreement to be valid, but it did not enforce its rates. USAA’s alternative reliance on feeshifting PFS did not waive the right to fee recovery under the agreement.

3. The evidence demonstrated the invoice was a retainer and not a final invoice.

4. Allowing USAA to recover 1/13 of its sought recovery makes USAA absorb the additional cost, which distorts the punitive purpose of the Offer of Judgment Statute.

Application of Policy Deductibles

Citizens Property Ins Corp , v Marie Avil and Clifford Romain 4D20220360 (Mar 27, 2024)

KK TAKEAWAY:

General practice requires a trial court to apply a policy deductible after the jury verdict.

KK TAKEAWAY:

Refusal to apply deductible post-verdict is error.

BACKGROUND:

A jury entered a verdict consistent with the Plaintiffs’ damage claim of $1,750. Citizens did not present any evidence of setoff or discuss the deductible to the jury. Citizens agreed not to list the deductible in the verdict form under the condition the trial court would apply deductibles after the verdict. After verdict, Citizens argued judgment could not

be entered in favor of the Insured as the policy deductible was $2,900. The trial court denied the motion and a subsequent motion to alter the final judgment.

The Fourth District reversed and remanded with instructions to enter judgment in favor of Citizens. The trial court was bound to apply a post-verdict setoff because no evidence was presented to the jury. A deductible is a part of the contract and need not be raised as an affirmative defense.

Application of Prejudgment Interest

Aymee Taylor v State Farm Florida Ins Co , 5D23-0243 (April 12, 2024)

KK TAKEAWAY:

Policy language binds a carrier to prejudgment interest by its terms.

KK TAKEAWAY:

If a policy does so, a stand-alone action can be maintained.

BACKGROUND:

Section 627.70131, Florida Statutes, has not been a stand-alone action for prejudgment interest per its express terms. However, in this claim, the policy language expressly required payment within 60 days of the entry of an appraisal award. In this claim, the appraisal award was not timely, thus, the Insured had a stand-alone cause of action based on breach of contract. Because State Farm did not expressly rely upon the entirety of section 627.70131, which would include the express prohibition of a stand-alone action, it was subject to a breach of contract action.

ACCOLADES AWARDS AND FIRM AWARDS

Kelley Kronenberg has been the recipient of numerous awards and honors both firm-wide and for a number of our practices, including individual accolades. Below is a select list of recognition and awards:

MEET THE

CONTRIBUTORS

Jeffrey M Wank Chair, First-Party Property and Insurance Coverage Division

Email Jeffrey M. Wank

Jeffrey Wank is Chair of First-Party Property and Insurance Coverage focusing his practice on first-party property insurance Defense, including coverage and bad faith litigation. Jeffrey also handles the defense of a wide array of third-party insurance defense claims.

Jeffrey assists insurers in all aspects of coverage disputes, including responses to civil remedy notices of insurer violations, pre-suit investigations and coverage evaluations, declaratory judgment and bad faith litigation. He defends property insurers throughout Florida in first-party coverage matters, where many of the claims involve sinkhole, windstorm, fire, mold, theft and water losses.

In addition, Jeffrey serves as coverage and bad faith counsel in third-party actions, including monitoring the defense of litigation. As part of this role, he is often asked to draft detailed coverage opinions, reservation of rights letters, declinations, and prosecute declaratory relief actions.

Jeffrey also has experience in handling complex civil and commercial matters, including the defense of personal injury, premises liability, employment discrimination, medical malpractice, nursing home liability, homeowner and condominium association claims, and construction defect cases.

Jeffrey has been named a Florida Super Lawyer Rising Star since 2014. In 2011, he was elected to the Broward Bar Association Young Lawyers Section Board of Directors, where he served as Secretary on the organization’s Executive Board and moved up to President in June 2015. Jeffrey was also named the Chair on the Board of Directors of Legal Aid Service of Broward County & Coast to Coast Legal Aid of South Florida for the 2019 term and previously served as the Vice Chair for the 2018 term.

Jeffrey earned his Bachelor of Science in Political Science from Florida State University and went on to earn his Juris Doctor degree from Nova Southeastern University Shepard Broad Law Center.

Daniel Montgomery Partner

Email Daniel Montgomery

Daniel Montgomery is a Partner at Kelley Kronenberg where he assists in handling matters related to first-party property insurance defense. Daniel handles all aspects of first-party property defense, including coverage disputes, pre-suit investigations, fraud investigations, and CRN responses. Additionally, our clients frequently engage Daniel to assist with the development of claims processes and procedures. Daniel’s practice is also focused on the highly-specialized areas of first-party property appeals and auto glass defense.

Prior to joining Kelley Kronenberg, Daniel worked as an Associate Attorney with an Am Law 200 firm, focusing his practice on first-party auto coverage and litigation, general liability litigation, and appellate law. Daniel also practiced as an Assistant State Attorney for Florida’s Fourth Judicial Circuit, in Jacksonville, where he litigated a variety of criminal proceedings through trial and served as a liaison for UVISA Certifications.

Daniel received his Bachelor of Science degree in Criminal Justice, summa cum laude, with a Certificate of Crime Scene Investigation, from Colorado Technical University. He then went on to earn his Juris Doctor degree from Florida Coastal School of Law, graduating cum laude.

Since Law School, Daniel continued his education by obtaining a Master of Science, summa cum laude, from Florida State University, with a Certificate in U.S. Intelligence. Daniel acquired an additional LL.M. in Executive Litigation Management from Baylor Law School.

During Daniel’s career he has served on several committees and groups continually working to develop awareness, knowledge, and best practices in a variety of areas including mental health, utilizing technology to drive efficiencies, special investigations, and litigation management best practices.

Employees Attorneys Locations

Founded in 1980, Kelley Kronenberg is an award winning, multi-practice national law firm with 495 employees, 220 attorneys, and 16 locations throughout Florida and the United States.

We are privileged to represent large public and private companies, small businesses, and individuals nationwide. With more than 40 practice areas, and growth on the horizon, we offer a comprehensive catalog of legal services to protect your legal interests in business and at home. Our firm is progressive and technologically advanced, while remaining true to our customer service heritage: integrity, ingenuity, and sincerity. Ever mindful of our history, but intensely committed to our future, we offer our clients a small firm feel with large firm resources. more than with over the convenience of 495

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