DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
PEOPLE’S TRUST INSURANCE COMPANY,
Appellant,
v.
LILLIAN LAMOLLI,
Appellee.
No. 4D21-2638
[December 21, 2022]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; David A. Haimes, Judge; L.T. Case No. CACE20-006482.
Mark D. Tinker and Mary Lou Cuellar-Stilo of Cole, Scott & Kissane,
P.A., Tampa, for appellant.
Wm. Allen Bonner of South Florida Appeals, PA, Miami, and Rene M.
Delombard of Vargas Gonzalez Hevia Baldwin LLP, Coral Gables, for
appellee.
WARNER, J.
People’s Trust Insurance Company appeals a final judgment for the
amount of an appraisal award. In granting final judgment, the court held
that the preferred contractor endorsement in the insured’s policy did not
authorize People’s Trust’s preferred contractor to perform roofing repairs
using subcontractors. The court based its decision on the fact that the
preferred contractor did not have a roofing contractor’s license, and thus
could not personally make the repairs required by the covered loss.
Therefore, the court granted judgment for the insured in the amount of the
appraisal award. We reverse, as we conclude that the policy did not
prohibit the preferred contractor from using subcontractors to perform
work on the insured’s home.
People’s Trust insured the home of the appellee insured. The insurance
policy included a preferred contractor endorsement (“PCE”). The PCE
provided that in exchange for a credit of $179 per year on the insured’s
policy, People’s Trust would have the option to use its preferred licensed
Florida Contractor, Rapid Response Team, LLC (“RRT”) to make claimed
repairs in lieu of a loss payment that People’s Trust would otherwise owe
the insured for the claims. The PCE included the following pertinent
provisions:
THIS ENDORSEMENT ALLOWS US AT OUR OPTION TO
SELECT RAPID RESPONSE TEAM, LLC™ TO MAKE
COVERED REPAIRS TO YOUR DWELLING OR OTHER
STRUCTURES.
“You” agree that in the event of a covered loss to “your”
dwelling or other structures on the “residence premises,”
other than a sinkhole loss “we” at our option may select Rapid
Response Team, LLC™ to repair “your” damaged property as
provided by the policy and its endorsements.
....
K. Loss Payment, the following is added:
4. When we have exercised our option to repair “your”
damaged property pursuant to this Preferred Contractor
Endorsement, we will repair the damaged property with
material of like kind and quality without deduction for
depreciation. Such repair is in lieu of issuing any loss
payment that would otherwise be due under the policy.
S. Appraisal, the following is added to the policy:
Where “we” elect to repair:
....
2. The scope of repairs shall establish the work to be
performed and completed by Rapid Response Team, LLC™.
Such repair is in lieu of issuing any loss payment to “you” that
otherwise would be due under the policy. The amount of loss
shall establish only the initial amount paid to Rapid Response
Team, LLC™ by “us”, and any additional amounts required to
complete repairs shall be “our” responsibility and will be paid
to Rapid Response Team, LLC™ without regard to policy limits
or the amount of initial payments.
2
Also, section J.6 of the general policy required that “[the insured] must
execute all work authorizations to allow contractors and related parties
entry to the property.” (Emphasis supplied.)
The insured’s underlying claim was for property damage to her home
caused by Hurricane Irma in 2017. In an email, People’s Trust accepted
coverage of the claim, but stated that the damages did not exceed the
insured’s deductible. People’s Trust also notified the insured, pursuant to
the PCE, that it was electing to exercise its right to use RRT to repair any
covered losses that exceeded the deductible amount.
The insured filed suit for breach of contract, alleging that People’s Trust
was refusing to provide full coverage under the insurance policy for the
damages to her home. People’s Trust filed a motion to abate and compel
appraisal, a motion to compel its right to repair, and a motion to compel
payment of the policy’s deductible. The motion included a request that
the insured “be compelled to attend appraisal, sign a work authorization,
pay the applicable deductible to RRT, and let RRT and/or its subcontractors
perform all covered repairs pursuant to the appraisal panel award to follow
subject to that award exceeding the Policy’s deductible.” (Emphasis
supplied.)
Upon stipulation by the parties, the court issued an agreed order for
appraisal and to abate the litigation. The damage was then appraised at
$59,170.03. This included the entire roofing system and screen enclosure
damages. When RRT sought authorization from the insured for entry of
its subcontractors onto the insured’s premises to make the repairs, the
insured objected and claimed that the policy required RRT alone to make
the repairs, not subcontractors. As RRT was a general contractor and did
not have a license to perform roofing or screening repairs, the insured
argued RRT could not comply with the policy provisions.
The insured filed a motion to compel payment of the appraisal award,
contending that RRT using subcontractors to perform the work on the
home was a breach of the insurance policy. The insured claimed that she
had agreed under the policy terms for only RRT to perform repairs.
Because RRT could not perform the repairs to her roof and screen, she
argued that she was entitled to a judgment for the amount of the appraisal.
At the final hearing, the court considered People’s Trust’s motion to
compel repairs as well as the insured’s motion to compel payment of the
award. The court agreed with the insured that the policy permitted only
RRT to make repairs, not any subcontractor. In its order compelling
repairs by People’s Trust, the court limited the ability of RRT to use
3
subcontractors:
Pursuant to the plain language of the insurance policy
between the parties, Peoples [sic] Trust Insurance may only
elect to have Rapid Response Team perform the repairs and
Rapid Response cannot then subcontract the repairs,
including putting a new roof on Plaintiff’s property, that Rapid
Response Team cannot perform itself.
Because RRT could not perform the repairs without a roofing
subcontractor, the court ultimately entered judgment for the insured in
the amount of the appraisal award. People’s Trust then filed this appeal.
The issue in this case involves the interpretation of an insurance
contract, which is a question of law subject to de novo review. See Wash.
Nat’l Ins. Corp. v. Ruderman,
117 So. 3d 943, 948 (Fla. 2013).
People’s Trust argues that the policy’s language in conjunction with
section 489.113(3), Florida Statutes (2016), governing general contractors,
requires that RRT be allowed to subcontract the roofing repairs for which
it is unlicensed.
The insured argues that the policy unambiguously gives People’s Trust
two options when a covered loss occurs: 1) pay the claim; or 2) employ RRT
to perform the repairs if it is licensed to do so. She further argues that the
lack of discussion of subcontractors renders the policy ambiguous as to
this issue, and that this silence must be construed against People’s Trust
as the contract’s drafter. Therefore, she argues, People’s Trust is required
to pay her the appraisal award.
We agree with People’s Trust that the policy does not require RRT alone
to make repairs, as the policy contemplates the use of subcontractors.
“We begin with the guiding principle that insurance contracts are
construed in accordance with ‘the plain language of the polic[y] as
bargained for by the parties.’” Fayad v. Clarendon Nat’l Ins. Co.,
899 So.
2d 1082, 1086 (Fla. 2005) (quoting Auto-Owners Ins. Co. v. Anderson,
756
So. 2d 29, 33 (Fla. 2000)) (alteration in original). “[T]erms of an insurance
policy should be taken and understood in their ordinary sense and the
policy should receive a reasonable, practical, and sensible interpretation
consistent with the intent of the parties—not a strained, forced, or
unrealistic construction.” Siegle v. Progressive Consumer Ins. Co.,
819 So.
2d 732, 736 (Fla. 2002) (quoting Gen. Accident Fire & Life Assurance Corp.
v. Liberty Mut. Ins. Co.,
260 So. 2d 249, 253 (Fla. 4th DCA 1972)).
4
When “[a] provision of the policy is ambiguous and susceptible to more
than one interpretation, the ‘meaning must be construed in favor of the
insured, since it is the insurer who usually drafts the policy.’” Meister v.
Utica Mut. Ins. Co.,
573 So. 2d 128, 130 (Fla. 4th DCA 1991) (quoting State
Farm Mut. Auto. Ins. Co. v. Pridgen,
498 So. 2d 1245, 1248 (Fla. 1986)).
However, while ambiguities are to be construed against the drafter, “a
court must construe a contract in a manner that accords with reason and
probability; and avoid an absurd construction.” Kipp v. Kipp,
844 So. 2d
691, 693 (Fla. 4th DCA 2003). An insurance policy’s plain meaning should
be construed as it would be understood by an ordinary person. Harrington
v. Citizens Prop. Ins. Corp.,
54 So. 3d 999, 1001 (Fla. 4th DCA 2010).
A contract’s silence does not always create an ambiguity. The Florida
Supreme Court has held that “[i]t is fundamental that the laws of Florida
are a part of every Florida contract.” Dep’t of Ins., State of Fla. v. Tchrs.
Ins. Co.,
404 So. 2d 735, 741 (Fla. 1981); see also Per Jonas Ingvar
Gustafsson v. Aid Auto Brokers, Inc.,
212 So. 3d 405, 408 (Fla. 4th DCA
2017); S. Crane Rentals, Inc. v. City of Gainesville,
429 So. 2d 771, 773
(Fla. 1st DCA 1983) (“The laws which exist at the time and place of the
making of a contract enter into and become a part of the contract made,
as if they were expressly referred to and incorporated in its terms,
including those laws which affect its construction, validity, enforcement or
discharge.”). Thus, a contract’s silence as to an issue does not create a
latent ambiguity where there is applicable law on that issue. See S. Crane
Rentals,
429 So. 2d at 773; see also Brandt v. Brandt,
525 So. 2d 1017,
1020 (Fla. 4th DCA 1988).
We conclude that the insurance policy allows RRT to use
subcontractors in completing repairs on an insured’s covered property
both by its terms as well as by existing law. As to the policy language
itself, the policy requires the insured to “execute all work authorizations
to allow contractors and related parties entry to the property.” (Emphasis
supplied.) If RRT were the only entity authorized by the insurance policy
to work on the property, the policy would not use the plural of contractor
or related party. Thus, the policy contemplates that entities or persons
other than RRT may perform work on the property.
The insured argues that because a company “only act[s] through its
employees,” it is reasonable to interpret the PCE’s reference to “related
parties” as referring to RRT’s own employees, citing Vesta Constr. &
Design, L.L.C. v. Lotspeich & Assocs., Inc.,
974 So. 2d 1176, 1180 (Fla. 5th
DCA 2008). However, for that reason it would be a “redundancy or
surplusage” for “related parties” to mean RRT’s employees. As RRT itself
5
is authorized to enter, and since RRT may only act through its employees,
RRT’s employees would already be authorized to enter. “[R]ules of
construction require that no word or part of an agreement is to be treated
as a redundancy or surplusage if any meaning, reasonable and consistent
with other parts, can be given to it[.]” Royal Am. Realty, Inc. v. Bank of
Palm Beach Tr. Co.,
215 So. 2d 336, 338 (Fla. 4th DCA 1968). Therefore,
in order to give the phrase “related parties” meaning and make it
consistent with other parts, the PCE necessarily includes any party
necessary to complete the repairs. See
id. Such parties reasonably would
include subcontractors, as would the reference in the policy to the plural
“contractors.”
Furthermore, application of existing law shows that a general
contractor is not only authorized, but required, to use subcontractors
properly licensed for the work to be performed. Section 489.113, Florida
Statutes (2016), covering the requirements for general contractors in the
state, provides:
(3) A contractor shall subcontract all electrical, mechanical,
plumbing, roofing, . . . unless such contractor holds a state
certificate or registration in the respective trade category,
however:
(a) A general, building, or residential contractor, except as
otherwise provided in this part, shall be responsible for any
construction or alteration of a structural component of a
building or structure, . . .
By law, a general contractor must subcontract roofing repairs where it
does not have a license for such trade, but the general contractor remains
responsible for any roofing construction or alteration. Thus, even if a
subcontractor was used to repair the insured’s roof, RRT would remain
ultimately responsible for the subcontractor’s work.
Pursuant to the insurance policy, the insured agreed to People’s Trust’s
use of RRT as the general contractor. And in order to comply with the
statute, RRT must use a licensed subcontractor to complete the roofing
repairs. Further, the policy contemplates the use of other “contractors
and related parties” and a “reasonable, practical, and sensible
interpretation” of that language would include subcontractors. See Siegle,
819 So. 2d at 736.
6
Conclusion
The court erred in determining that the insurance policy did not
authorize the use of subcontractors to make repairs. The policy allows
People’s Trust to use RRT as its preferred contractor. Because RRT is a
general contractor, it must use a licensed subcontractor to complete roof
repairs. Both the policy language and existing law authorize the use of
subcontractors to effectuate repairs. We reverse and remand for vacation
of the final judgment and for further proceedings.
Reversed and remanded.
DAMOORGIAN and CONNER, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
7
