PEOPLE'S TRUST INSURANCE COMPANY v. RESTORATION GENIE, INC. a/a/o YANET GRUZ and DANIEL RODRIGUEZ

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
PEOPLE’S TRUST INSURANCE COMPANY,
Appellant,
v.
RESTORATION GENIE INC.,
a/a/o Yanet Cruz and Daniel Rodriguez,
Appellee.
No. 4D21-628
[March 30, 2022]
Appeal from the County Court for the Seventeenth Judicial Circuit,
Broward County; Kathleen McCarthy, Judge; L.T. Case Nos. COCE18-
1882 and CACE20-13749.
Brett R. Frankel and Jonathan M. Sabghir of People’s Trust Insurance
Co., Deerfield Beach, and Mark D. Tinker and Mary Lou Cuellar-Stilo of
Cole, Scott & Kissane, P.A., Tampa, for appellant.
Adrian Neiman Arkin of Mintz Truppman, P.A., North Miami, for
appellee.
WARNER, J.
Appellant People’s Trust Insurance Company (“insurer”) appeals a final
summary judgment entered in favor of assignee/appellee Restoration
Genie, Inc. (“assignee”), arising from an insurance claim for water
mitigation services. Insurer claims that material disputed issues of fact
remain as to whether assignee complied with the policy provisions for
payment. Assignee concedes that there are issues of fact. However,
assignee contends that the limitation of its invoice to the amount insurer’s
preferred contractor would charge for the same service based upon a
service agreement essentially created a policy limit for services for which
insureds were provided no notice. We reject assignee’s policy argument
and reverse the summary judgment because disputed issues of fact
remain.
Insureds purchased a homeowners insurance policy which included a
“Preferred Contractor Endorsement.” The endorsement provided insureds
with an annual premium credit of $75 per year in exchange for their
agreement to allow insurer the option to select Rapid Response Team
(“RRT”) as its preferred vendor to make covered repairs.
The endorsement substantially altered the policy’s “Reasonable
Repairs” provision. The endorsement provides:
SECTION I – PROPERTY COVERAGES
E. Additional Coverages
2. Reasonable Repairs is deleted and replaced by the
following for losses other than sinkhole:
a. If a peril causing a loss and related damage are
covered . . . and repairs are necessary to protect covered
property from further damage, “you” must notify us
before authorizing or commencing repairs so “we”, at
our option, may select Rapid Response Team, LLC™ to
make the covered Reasonable Repairs.
b. If “you” do not notify “us” and allow “us”, at our
option, to select Rapid Response Team, LLC™ for the
covered Reasonable Repairs, “our” obligation for repairs
made to protect the covered property from further
damage is limited to the lesser of the following:
(1) The reasonable cost “you” incur for necessary
repairs made solely to protect the property from
further damage; or
(2) The amount “we” would have paid to Rapid
Response Team, LLC™ for necessary repairs made
solely to protect the covered property from further
damage.
The endorsement thus required notice to insurer of the occurrence of a
loss or damages before emergency services began to allow insurer to elect
its chosen vendor, RRT, to perform the reasonable repairs. In the event
insureds did not notify insurer of the loss, then insurer’s payment
obligation was limited to the lessor of the reasonable cost incurred for
necessary mitigation or the amount which insurer would have paid RRT
to perform those emergency services.
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During the term of the policy, insureds experienced a water leak in their
home and hired assignee to perform water mitigation services. Insureds
assigned their benefits under the policy to assignee that same day and
assignee provided emergency services drying out insureds’ home.
Assignee invoiced insurer for the total amount of $5,327.10. Insurer paid
assignee $2,000. Insurer explained its payment by quoting the policy that
when notice of the loss was not given for the need for repairs, the policy
provided that insurer’s obligation was limited to the amount which it
would have paid RRT. After the effective date of insureds’ policy, insurer
had entered into a service agreement with RRT for which all water
mitigation services would be performed for a flat fee of $2,000 per
assignment. Therefore, insurer issued a check to assignee for $2,000.
Assignee filed suit for the difference between insurer’s payment and its
bill. Insurer answered and contended that because assignee did not notify
it of the damage and give it the right to use RRT, its obligation to pay was
limited to the amount it would have paid RRT, i.e., $2,000. Assignee
moved for summary judgment, contending that it had notified insurer
according to the policy. Moreover, it argued that the service agreement
between insurer and RRT created a limitation of coverage of which
insureds were not notified and thus should not be enforced against it as
assignee.
With the motion for summary judgment, assignee filed its
representative’s affidavit. According to its representative, assignee notified
insurer of the loss and the immediate need for water mitigation service
before beginning any work. Insurer was difficult to reach and appeared to
be inundated and overwhelmed with claims, as Hurricane Irma had hit
around the same time. When contacted, insurer advised assignee that its
vendor was unable to perform the services. Insurer authorized assignee
to perform the necessary mitigation services without conditions or
limitations and to submit an invoice for payment.
In opposition to assignee’s representative’s affidavit, insurer’s
representative testified in a deposition and by affidavit that insurer did not
have any record of receiving a call or any notification from insureds.
Despite this apparent disputed issue of material fact, the trial court
granted assignee’s motion and entered final summary judgment for the
assignee. Insurer appeals that judgment.
On appeal, insurer contends that summary judgment was improper
because a material issue of fact is in dispute. Assignee admits that on the
issue of notice, a disputed issue of fact remains, as the affidavits are
conflicting as to whether the assignee gave notice as required by the policy
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prior to commencing repairs. But, even if no notice was given to insurer,
assignee claims that summary judgment should still be affirmed, because
subpart (b) of the property coverage endorsement constitutes a policy
limitation for which insureds were not provided notice. Thus, the policy
limitation cannot be enforced against insureds’ assignee.
An insurance policy’s coverage is defined by the policy’s plain language.
Fayad v. Clarendon Nat’l Ins. Co., 899 So. 2d 1082, 1086 (Fla. 2005).
“However, ambiguous provisions are liberally construed in favor of the
insured and strictly against the insurer.” Arguello v. People’s Tr. Ins. Co.,
315 So. 3d 35, 38 (Fla. 4th DCA 2021) (citing Auto-Owners Ins. Co. v.
Anderson, 756 So. 2d 29, 34 (Fla. 2000)). Nevertheless, “the rule of liberal
construction in favor of the insured applies only when a genuine
inconsistency, uncertainty, or ambiguity in meaning remains after resort
to the ordinary rules of construction[.]” Id. (quoting Liebel v. Nationwide
Ins. Co. of Fla., 22 So. 3d 111, 115 (Fla. 4th DCA 2009)).
Under the endorsement, insureds were required to notify insurer prior
to commencing any repairs, so that insurer could use RRT to make the
covered repairs. Subpart (b) provided a remedy to insurer if notice was
not given. Subpart (b) limited any payments for necessary repairs to
protect the property from further damages as the lesser of (1) the
reasonable cost incurred by insureds to make such repairs, or (2) the
amount insurer would have paid RRT for such repairs. Based upon an
agreement between insurer and RRT, entered into after the policy was
written, that amount was $2,000.
Rather than change the policy coverage, subpart (b) establishes an
agreed-upon remedy in the event that insureds failed to properly give
notice. See Orkin Exterminating Co., Inc. v. DelGuidice, 790 So. 2d 1158,
1161 (Fla. 5th DCA 2001) (noting that parties are limited by the remedy
provided for in their contract). The remedy does nothing more than
prevent insurer from being harmed by insureds’ breach of the policy by
restricting its obligation to the amount it would have paid if insureds had
not breached. The policy is not ambiguous.
Assignee contends that the service agreement between insurer and RRT
effectively amends the policy to limit the payment for water mitigation to
$2,000, and insureds should have been notified of that fact. The service
agreement does not amend the policy. It does not create a different policy
limit for coverage. Nor did the service agreement need to be incorporated
into the policy, where it was simply offered to prove how much insurer
would have paid RRT for the work. No policy provision prevents RRT from
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providing what may be a volume discount to insurer through its service
agreement.
Insureds could have rejected the preferred contractor endorsement, but
instead opted for a very modest discount on price in return for being bound
to use RRT to mitigate and repair any property loss. That choice may have
been a bad bargain, but it was agreed to by insureds.
Assignee cites several PIP cases in support which are inapposite, as PIP
is a mandatory coverage governed by statute, whereas homeowners
insurance is a voluntary coverage. See, e.g., Geico Gen. Ins. Co. v. Virtual
Imaging Servs., Inc., 141 So. 3d 147, 158 (Fla. 2013) (holding that an
insurer must provide notice in the policy of its election to use the fee
schedules under PIP statute before attempting to limit reimbursements for
covered reasonable expenses); Ward v. Nationwide Mut. Fire Ins. Co., 364
So. 2d 73, 77 (Fla. 2d DCA 1978). The supreme court has urged caution
on this very point: “[B]ecause both PIP and UM are statutorily mandated
coverages, analogies to cases interpreting coverages that are not
statutorily mandated, such as provisions in fire, life, and property
insurance policies, may not necessarily be illuminating in guiding our
analysis.” Flores v. Allstate Ins. Co., 819 So. 2d 740, 745 (Fla. 2002).
The relevant endorsement provisions set forth an unambiguous remedy
in case insureds failed to fulfill their notice obligation. The provisions did
not alter the policy limit. Thus, assignee’s alternative argument to sustain
the final judgment fails.
Because disputed issues of material fact remain, we reverse the final
summary judgment and remand for further proceedings.
Reversed and remanded.
LEVINE and KLINGENSMITH, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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