Florida Insurance Guaranty Association, Inc. v. Waters , 157 So. 3d 437 ( 2015 )

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
FLORIDA INSURANCE GUARANTY )
ASSOCIATION, INC., as statutory )
successor in interest to HOMEWISE )
PREFERRED INSURANCE COMPANY, )
)
Appellant, )
)
v. ) Case No. 2D13-4455
)
DARLENE WATERS, )
)
Appellee. )
___________________________________ )
Opinion filed February 6, 2015.
Appeal pursuant to Fla. R. App. P. 9.130
from the Circuit Court for Pasco County; W.
Lowell Bray, Jr., Judge.
G. William Bissett, Jr. of Kubicki Draper, PA,
Miami, for Appellant.
George A. Vaka and Nancy A. Lauten of
Vaka Law Group, Tampa, and Kenneth C.
Thomas, Jr., of Marshall Thomas Burnett,
Land O'Lakes, for Appellee.
SILBERMAN, Judge.
Florida Insurance Guaranty Association, Inc. (FIGA), appeals a nonfinal
order that compels an appraisal for Darlene Waters' sinkhole claim. Based on this
court's recent decision in Florida Insurance Guaranty Ass'n v. de la Fuente, 40 Fla. L.
Weekly D123 (Fla. 2d DCA Jan. 7, 2015), we conclude that the trial court erred in
determining that Waters was entitled to an appraisal under her insurance policy. And,
even if Waters had a right to an appraisal, she waived any right she had by taking action
inconsistent with that right by actively litigating the case for over two years. Therefore,
we reverse the order compelling appraisal and remand for further proceedings.
In October 2009, Waters' home sustained damage due to a sinkhole. She
sought insurance benefits from her homeowners' insurance company, HomeWise
Preferred Insurance Company (HomeWise). A geological investigation detected
evidence of sinkhole activity, and remediation by pressure grout injections was
recommended. HomeWise obtained two bids and agreed to pay either contractor to
complete those repairs once Waters entered into a repair contract. Waters disagreed
with HomeWise's assessment and requested neutral evaluation.
The neutral evaluation report issued in June 2010. The neutral evaluator
also recommended compaction grouting and did not find underpinning was necessary.
HomeWise accepted the neutral evaluator's findings. Waters then had further testing
done at her own expense. The resulting report recommended compaction grouting and
full underpinning for subsurface stabilization and foundation repair. Waters entered into
a contract with Champion Foundation Repair Systems (Champion) to perform those
repairs. The estimated cost was substantially greater than the estimated costs for
repairs without underpinning. Waters submitted the Champion contract to HomeWise
for approval in January 2011, but HomeWise failed or refused to approve it. At this
point, Waters did not demand an appraisal under the terms of her policy.
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On April 26, 2011, Waters sued HomeWise for breach of the insurance
contract and alleged HomeWise refused to pay all benefits due. Waters served
interrogatories, a request for admissions, and a request for production. She later set
the case for jury trial. However, on November 4, 2011, a liquidation order was entered
that declared HomeWise insolvent and activated FIGA to handle the covered claims of
the insolvent insurer pursuant to sections 631.50 through 631.70, Florida Statutes
(2011), the FIGA Act.
On April 11, 2012, FIGA informed Waters that it would provide coverage in
accord with the neutral evaluator's recommendations once she entered into a contract
for those repairs. Instead, Waters forwarded the Champion contract for FIGA's
approval, but FIGA did not approve the contract. On June 14, 2012, Waters filed an
amended complaint naming FIGA and alleging that FIGA breached the insurance policy
by failing to authorize and approve the Champion contract. Waters also served
interrogatories, requests for production, and requests for admissions on FIGA. After
FIGA filed its answer and affirmative defenses, Waters served a notice on October 26,
2012, that the matter was at issue and ready for trial. On February 1, 2013, the trial
court entered an order setting the jury trial for the week of August 12, 2013. Waters
initiated further discovery directed to FIGA.
In correspondence to FIGA on May 13, 2013, Waters demanded an
appraisal. FIGA did not respond, and both parties filed witness and exhibit lists. Six
weeks before the trial date, on July 1, 2013, Waters filed a motion to compel appraisal
and stay proceedings. FIGA argued that no appraisable issue existed and also raised
the issue of waiver. After a hearing on the motion to compel, the trial court ordered
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appraisal. In doing so, the trial court made no findings regarding waiver. FIGA appeals
from that order compelling appraisal.
In de la Fuente, this court determined that rather than the statutory
definition of "covered claim" in effect when the insurer issued the policy, the more
restrictive version of the definition in effect at the time the insurer was adjudicated
insolvent applied and governed the scope of FIGA's liability for sinkhole loss. Id. at
D124; see also Fla. Ins. Guar. Ass'n v. Bernard, 140 So. 3d 1023, 1031 (Fla. 1st DCA
2014), review denied, No. SC14-1416, 2014 WL 6883868 (Fla. Dec. 5, 2014). The
application of the 2011 definition of "covered claim" prohibits "FIGA from paying an
insured directly for a sinkhole loss. Instead, FIGA may only pay a contractor for the
'actual repairs to the property' for such a loss up to the amount of the policy limits and
the statutory limits on FIGA's obligations to pay, whichever is less." de la Fuente, 40
Fla. L. Weekly at D124.
This court also determined in de la Fuente that the 2011 definition
effectively prohibits an appraisal under the terms of the policy because "requiring FIGA
to participate in the appraisal process is at odds with FIGA's statutory mandate to pay
only for the actual cost of repair for a covered sinkhole loss." Id. at D125. The court
observed that the nature of sinkhole repairs made it unlikely that FIGA would be able to
comply with the statutory requirements if the appraisal process were utilized. Id. The
pertinent policy provisions in de la Fuente are the same as the provisions in the present
case. Therefore, under this court's reasoning in de la Fuente, Waters would not be
entitled to an appraisal. See id.; but see Fla. Ins. Guar. Ass'n v. Branco, 148 So. 3d
488, 492-93, 496 (Fla. 5th DCA 2014) (determining that the amount of loss is an
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appraisal issue and affirming portion of order that directed parties to engage in the
appraisal process); see also Fla. Ins. Guar. Ass'n v. Sill, 39 Fla. L. Weekly D2575,
D2575 (Fla. 5th DCA Dec. 12, 2014); Fla. Ins. Guar. Ass'n v. Santos, 148 So. 3d 837,
838-39 (Fla. 5th DCA 2014). Accordingly, we reverse the trial court's order determining
that Waters was entitled to invoke the appraisal process.
Even if Waters had the right to an appraisal, she waived that right by
taking action inconsistent with it by actively litigating the case for over two years. The
trial court did not explicitly rule on the waiver issue. However, because the trial court
ordered appraisal, it implicitly rejected FIGA's waiver argument.
On appellate review of a ruling on a motion to compel appraisal, factual
findings are reviewed for competent, substantial evidence, and the application of the law
to the facts is reviewed de novo. See Fla. Ins. Guar. Ass'n v. Castilla, 18 So. 3d 703,
704 (Fla. 4th DCA 2009). But when the trial court makes no findings of fact on the issue
of waiver and the facts are undisputed, appellate review is de novo. Branco, 148 So. 3d
at 493; see also Mora v. Abraham Chevrolet-Tampa, Inc., 913 So. 2d 32, 33-34 (Fla. 2d
DCA 2005) (regarding issue of arbitration waiver). Based on the undisputed facts here,
our review is de novo.
The Florida Supreme Court has "long held that a party's contract rights
may be waived by actually participating in a lawsuit or taking action inconsistent with
that right." Raymond James Fin. Servs., Inc. v. Saldukas, 896 So. 2d 707, 711 (Fla.
2005) (citing Klosters Rederi A/S v. Arison Shipping Co., 280 So. 2d 678, 680 (Fla.
1973)). Like an arbitration right or any other contract right, a party can waive a right to
an appraisal when the party's conduct is inconsistent with that right. See Fla. Ins. Guar.
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Ass'n v. Reynolds, 148 So. 3d 840, 842 (Fla. 5th DCA 2014); see also Citizens Prop.
Ins. Corp. v. Admiralty House, Inc., 66 So. 3d 342, 344-45 (Fla. 2d DCA 2011) (stating
that although the insured had litigated the case for ten months, the insured had not
maintained a position inconsistent with the remedy of appraisal because the insured
made a presuit demand for appraisal and pleaded a claim for a declaratory action to
determine its right to an appraisal).
Here, Waters did not invoke the appraisal clause until litigation had been
ongoing for two years. HomeWise had acknowledged that a sinkhole loss existed but
refused to approve the Champion contract that called for underpinning in addition to
grouting. Rather than seek appraisal, Waters filed suit against HomeWise in April 2011,
engaged in discovery, and in September 2011 filed a notice that the case was at issue
and ready for jury trial.
After FIGA became obligated on any covered claim upon HomeWise's
insolvency, FIGA agreed to provide coverage in accord with the neutral evaluator's
report once Waters entered into a contract for repairs. Waters submitted the Champion
contract rather than a contract consistent with the neutral evaluation, and FIGA did not
approve the Champion contract. Then, on June 12, 2012, instead of seeking appraisal,
Waters filed her amended complaint. She added FIGA as a defendant, demanded a
jury trial, engaged in substantial discovery, and eventually had the case set for trial.
On May 13, 2013, Waters sent correspondence to FIGA demanding an
appraisal. FIGA did not respond. In June 2013 both parties filed their witness and
exhibit lists. On July 1, 2013, six weeks before the trial date, Waters filed a motion to
compel appraisal and stay proceedings.
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Waters voluntarily participated in this lawsuit against HomeWise and FIGA
after both had agreed that there was a sinkhole loss but disputed the amount of loss.
Under these circumstances, in which Waters pursued discovery and sought a jury trial
on the same issues that would be addressed in an appraisal, we conclude that her
conduct was inconsistent with the right to an appraisal and that she waived any right
she had to an appraisal. See Reynolds, 148 So. 3d at 842 (determining that the
insureds waived the right to appraisal when they pursued significant litigation activities
and waited over a year after FIGA admitted coverage before demanding an appraisal);
Fla. Ins. Guar. Ass'n v. Maroulis, 39 Fla. L. Weekly D2198, D2199 (Fla. 5th DCA Oct.
17, 2014) (determining that waiver occurred when the insureds engaged in significant
litigation activities and waited almost a year after FIGA accepted coverage to demand
appraisal); Fla. Ins. Guar. Ass'n v. Rodriguez, 39 Fla. L. Weekly D2196, D2197 (Fla. 5th
DCA Oct. 17, 2014) (determining that waiver occurred when the insureds engaged in
litigation activity against original insurer and FIGA and waited three years to demand
appraisal); cf. Fla. Ins. Guar. Ass'n v. Martucci, 152 So. 3d 759 (Fla. 5th DCA Dec. 5,
2014) (determining that no waiver occurred when the insureds demanded appraisal five
months after FIGA admitted coverage and did not file any discovery requests or motions
during that time).
Thus, we reverse the order compelling appraisal and remand for further
proceedings.
Reversed and remanded.
KELLY and VILLANTI, JJ., Concur.
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