Kelley Kronenberg - In the Know - First-Party Property Appellate - January 2024

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FIRST- PARTY PROPERTY APPELLATE EDITION

IN THIS ISSUE: • Limits of Motion to Dismiss • Sufficiency of AOB • Policy Interpretation – Defining “Incur” • Exclusions – Water Damage Exclusion and Limited Water Damage Coverage

FIRST-PARTY PROPERTY APPELLATE TEAM

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

ADMISSIONS 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).

Partner

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).

Tallahassee | Atlanta T: (850) 577-1301 kfernandes@kklaw.com

w The Kidwell Group, LLC d/b/a Air Quality Assessors of Florida a/a/o Benjamin Kivovitz, Case No. 4D212843 (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)

Kimberly J. Fernandes

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.”).

Daniel Montgomery Partner Jacksonville T: (904) 549-7700 dmontgomery@kklaw.com

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”).

TABLE OF

CONTENTS Limits of Motion to Dismiss ADVANCE MOLD SERVICES, INC., ETC. v. UNIVERSAL NORTH AMERICA INS. CO., 3523-0240 (Dec. 20, 2023) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Sufficiency of AOB THE KIDWELL GROUP, LLC DBA AIR QUALITY ASSESSORS OF FLORIDA A/A/O JOSE LINARES and CELIA LINARES v. SAFEPOINT INS. CO., 4d2022-2806 (Dec. 20, 2023). . . . . . . . . . . . . . . . 5

Policy Interpretation – Defining “Incur” STATE FARM FLORIDA INS. CO. v. JORETHA M. JAMES, 5D22-1404 (Dec. 1, 2023). . . . . . . . . . 7

Exclusions – Water Damage Exclusion and Limited Water Damage Coverage PEOPLE’S TRUST INS. CO. v. KIMBERLY DIAZ and EVARISTO DIAZ, 5D22-1006 (Dec. 1, 2023) . . . 8

Limits of Motion to Dismiss ADVANCE MOLD SERVICES, INC., ETC. v. UNIVERSAL NORTH AMERICA INS. CO., 3523-0240 (Dec. 20, 2023).

KK TAKEAWAY: Motion to Dismiss is not to determine facts.

KK TAKEAWAY: Motion to Dismiss is limited to the issue of legal sufficiency.

KK TAKEAWAY: Factual determinations regarding the type of service are beyond pleadings.

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BACKGROUND: Advance Mold filed a breach of contract for insurance benefits for mold remediation services. Universal sought a dismissal, arguing that a line item within the assignment’s estimate was administrative.

The item was “[h]azardous waste/mold cleaning-supervisory/admin-per hour.”

Universal argued that the line item contains admin, thus prohibited under section 627.7152(2)(b), “an assignment agreement may not contain….an administrative fee. At the hearing, Advance Mold argued that the line item was for supervisory charges, not administrative. Universal argued the use of admin was enough on its face to enable the court to dismiss without making a factual finding.

The Third District Court of Appeals reversed the dismissal, per curriam, holding the trial court could not determine factual issues, rather just the legal sufficiency. The trial court exceeded its review by making a factual determination on the nature of the fee.

Sufficiency of AOB THE KIDWELL GROUP, LLC DBA AIR QUALITY ASSESSORS OF FLORIDA A/A/O JOSE LINARES and CELIA LINARES v. SAFEPOINT INS. CO., 4d2022-2806 (Dec. 20, 2023) KK TAKEAWAY: Assignment of benefits with an invoice for the same day of assignment is part of the assignment.

BACKGROUND: Kidwell filed a breach of contract for failure to pay for forensic engineering services pursuant to its assignment of benefits agreement. Safepoint sought dismissal,

arguing that the assignment did not contain a line item estimate as required by section 627.7152(2)(a). The trial court dismissed the complaint, finding that the invoice was not a line item estimate pursuant to The Kidwell Group, LLC, d/b/a Air Quality Assessors of Florida a/a/o Ben Kikovitz v. UNITED PROPERTY & Casualty Insurance Company, 343 So. 3d 97 (4th DCA 2022).

The Fourth District Court of Appeal reversed the order of dismissal, holding the trial court erred in finding the invoice was not part of the assignment because the assignment expressly incorporated the invoice dated the same day. The Fourth District relied on standing case law that a separate document incorporated in or expressly relied on is part of the original writing. The distinction in Kikovitz was the invoice post-dated the assignment by five days.

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Policy Interpretation – Defining “Incur” STATE FARM FLORIDA INS. CO. v.

JORETHA M. JAMES, 5D22-1404 (Dec. 1, 2023) KK TAKEAWAY: Incur is not limited to a contractual obligation to pay; rather, the liability for the cost is sufficient.

BACKGROUND: State Farm appealed a final order finding that the Insured “incurred” the tear-out costs based upon a repair contract that could be

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canceled. State Farm’s argument to the trial court was that the insured did not incur a cost of tear out because the contract could be canceled, thus illusory. However, the Insured argued the appraisal determination and executed contract were sufficient.

The Fifth District Court of Appeals affirmed the trial court, holding that incur is limited to “become liable” for, not an irrevocable contract. The Fifth District relied upon Ceballo, in which the Florida Supreme Court noted to “incur” an expense “means to become liable for it, but not necessarily to have actually expended it. Ceballo v. Citizens Property Insurance Corp., 967 So. 2d 811, 815 (Fla. 2007). The Fifth District also noted no language in the policy suggesting that a party expend funds to be entitled to proceeds. State Farm could have modified the language to do so.

Exclusions – Water Damage Exclusion and Limited Water Damage Coverage PEOPLE’S TRUST INS. CO. v.

KIMBERLY DIAZ and EVARISTO DIAZ, 5D22-1006 (Dec. 1, 2023) KK TAKEAWAY: Policy language must be strictly construed, and a WDX endorsement that excludes water losses removes pre-existing tear-out.

KK TAKEAWAY: A LWD endorsement only creates limited coverage by its express terms.

BACKGROUND: After trial, the jury awarded $9,500 in damages and $25,300 in tear-out costs.

People’s Trust appealed whether tear-out was covered under the policy under the Limited Water Damage (“LWD”) endorsement, which modified the Water Damage Exclusion (“WDX”).

The Fifth District Court of Appeals reversed and remanded the jury verdict, joining the Third, Fourth, and Sixth Districts on the same issue those Courts addressed.

The commonality is that even if tear-out coverage previously existed, the WDX endorsement removed any water loss coverage. The LWD endorsement was only clawed by limited coverage by its express terms, it did not reinstate any other aspect of previous coverage.

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NOTABLE

CASE WINS Kelley Kronenberg Achieves Victory Exposing Insurance Fraud in Plumbing Loss Case Read More Jake D. Huxtable

Melissa Usher

Zachary A. Schiffman

Partner

Partner

Attorney

Kelley Kronenberg Secures Victory in FirstParty Property Appeal After Securing Lower Court Dismissal Kimberly J. Fernandes

Read More

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For additional successes in First-Party Property cases, please click here.

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AWARDS AND

ACCOLADES 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:

2021 – 2023 Top Workplaces USA Energage

2020 – 2023 Top Workplaces Sun Sentinel

2019 – 2024 Best Law Firms U.S. News - Best Lawyers

2022 – 2023 Best Places To Work New Orleans CityBusiness

2020 – 2022 Compass Award Leadership Council on Legal Diversity

2021 – 2022 Top Places To Work Ragan Communications

2019, 2021 – 2023 Women In Law Scorecard The National Law Journal

2016 – 2023 Largest Law Firms Tampa Bay Business Journal

2017 – 2022 Biggest Law Firms in Florida Florida Trend

2012 – 2023 NLJ 500 The National Law Journal

2020 – 2022 Business of the Year South Florida Business Journal

2012 – 2023 Top Law Firms South Florida Business Journal

2017 – 2022 400 Largest Law Firms Law360

2011 – 2022 100 Largest Law Firms Daily Business Review

2016 – 2022 Largest Central Florida Law Firms Orlando Business Journal

2022 Best Midsize Law Firm To Work For Vault

2021 Diversity Scorecard The American Lawyer

2021 Diversity Team Award Profiles in Diversity Journal

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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

Jeffrey also has experience in handling complex

and Insurance Coverage focusing his practice on

civil and commercial matters, including the defense

first-party property insurance Defense, including

of personal injury, premises liability, employment

coverage and bad faith litigation. Jeffrey also

discrimination, medical malpractice, nursing home

handles the defense of a wide array of third-party

liability, homeowner and condominium association

insurance defense claims.

claims, and construction defect cases.

Jeffrey assists insurers in all aspects of coverage

Jeffrey has been named a Florida Super Lawyer

disputes, including responses to civil remedy

Rising Star since 2014. In 2011, he was elected

notices of insurer violations, pre-suit investigations

to the Broward Bar Association Young Lawyers

and coverage evaluations, declaratory judgment

Section Board of Directors, where he served as

and bad faith litigation. He defends property

Secretary on the organization’s Executive Board

insurers throughout Florida in first-party coverage

and moved up to President in June 2015. Jeffrey

matters, where many of the claims involve sinkhole,

was also named the Chair on the Board of Directors

windstorm, fire, mold, theft and water losses.

of Legal Aid Service of Broward County & Coast to

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

Coast Legal Aid of South Florida for the 2019 term and previously served as the Vice Chair for the 2018 term.

often asked to draft detailed coverage opinions,

Jeffrey earned his Bachelor of Science in Political

reservation of rights letters, declinations, and

Science from Florida State University and went

prosecute declaratory relief actions.

on to earn his Juris Doctor degree from Nova Southeastern University Shepard Broad Law Center.

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Daniel Montgomery Partner Email Daniel Montgomery

Kelley

Daniel received his Bachelor of Science degree

Kronenberg where he assists in handling matters

in Criminal Justice, summa cum laude, with a

related to first-party property insurance defense.

Certificate of Crime Scene Investigation, from

Daniel handles all aspects of first-party property

Colorado Technical University. He then went on to

defense, including coverage disputes, pre-suit

earn his Juris Doctor degree from Florida Coastal

investigations, fraud investigations, and CRN

School of Law, graduating cum laude.

Daniel

Montgomery

is

a

Partner

at

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.

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.

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A Firm Built on Relationships KELLEY KRONENBERG IS A MULTI-PRACTICE BUSINESS LAW FIRM.

with over

485

Employees

more than

the convenience of

Attorneys

Locations

225

16

Founded in 1980, the firm is one of the fastest-growing law firms in Florida and amongst the largest in the U.S. The firm serves all types and sizes of public and private companies, including small businesses and individuals nationwide.

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LOCATIONS CHICAGO MERRILLVILLE INDIANAPOLIS

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LOCATIONS

NAPLES

MIAMI

FORT LAUDERDALE

NEW YORK CITY

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MERRILLVILLE

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