ALAN GRNJA and DENISE GRNJA v. PEOPLE'S TRUST INSURANCE COMPANY

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
ALAN GRNJA and DENISE GRNJA,
Appellants,
v.
PEOPLE’S TRUST INSURANCE COMPANY,
Appellee.
No. 4D22-2383
[May 10, 2023]
Appeal of a nonfinal order from the Circuit Court for the Fifteenth
Judicial Circuit, Palm Beach County; Richard L. Oftedal, Senior Judge;
L.T. Case No. 50-2022-CA-004355-XXXX-MB.
Blair M. Fazzio and Ardalan Montazer of Kanner & Pintaluga, P.A., Boca
Raton, for appellants.
Brett Frankel, Jonathan Sabghir and Jake A. Tover of People’s Trust
Insurance Company, Deerfield Beach, and Mark D. Tinker and Carly M.
Weiss of Cole, Scott & Kissane, P.A., Tampa, and Scott A. Cole of Cole,
Scott & Kissane, P.A., Miami, for appellee.
PER CURIAM.
Alan and Denise Grnja appeal a nonfinal order granting People’s Trust
Insurance Company’s motion to abate and compel appraisal. The Grnjas
argue that People’s Trust waived its right to appraisal by failing to give
timely notice of the Grnjas’ right to participate in mediation pursuant to
section 627.7015, Florida Statutes (2021). We disagree and affirm.
Factual & Procedural History
The Grnjas obtained a homeowners’ insurance policy with People’s
Trust effective from November 2020 to November 2021. The policy
contains an appraisal provision providing that either party may demand
an appraisal if they disagree on the amount of loss and the scope of
repairs.
In December 2021, the Grnjas reported a loss to their property that had
occurred in April 2021. People’s Trust notified the Grnjas that the claim
was covered and provided a proposed estimate and scope of repairs. The
correspondence noted that if the Grnjas did not agree with People’s Trust’s
assessment of repairs, “the policy’s appraisal provision provides a
mechanism by which to resolve that dispute.” The correspondence also
provided the following notice:
[People’s Trust] is also notifying you pursuant to Florida
Statute §627.2015 [sic], that you may have the right to attend
a non-binding mediation with [People’s Trust] and a neutral
third party mediator through the Florida Department of
Financial Services (FDFS). This program is available to
anyone with a disputed residential property claim, arising
from covered damage, in excess of $500.00. Enclosed for your
review, please find the FDFS Mediation Brochure which
details the program’s guidelines and contact information.
(Emphasis omitted). The accompanying brochure provided more
information regarding mediation pursuant to section 627.7015 to resolve
claim disputes. Other than this correspondence and brochure, People’s
Trust did not provide any additional notice of the Grnjas’ right to
mediation.
The Grnjas disagreed with People’s Trust’s estimate and scope of the
proposed repairs and submitted an executed sworn proof of loss and their
own estimate of damages. Less than a month later, the Grnjas filed suit
in the lower court for breach of contract.
People’s Trust subsequently filed a motion to abate the case and compel
an appraisal regarding the amount of loss and scope of repairs. In
response, the Grnjas argued, inter alia, that People’s Trust waived its right
to invoke an appraisal by People’s Trust’s “failure to strictly comply with
Fla. Stat. §627.7015.” Specifically, the Grnjas argued that People’s Trust
waived its right to appraisal because (1) it provided notice of the right to
participate in mediation pursuant to section 627.7015 prior to a dispute
arising between the parties, and (2) it failed to send such notice after the
Grnjas submitted the executed sworn proof of loss and their own estimate
of damages.
The lower court held a hearing on the motion, and the Grnjas
maintained that People’s Trust waived its right to appraisal by providing a
premature notice of mediation before a dispute arose as to their claim.
People’s Trust acknowledged that the Grnjas’ sworn proof of loss and
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estimate put it on notice of a dispute over the scope of repairs but argued
no precedent required an insurer to send a second mediation statement
under section 627.7015. The Grnjas responded that People’s Trust
“dropped the ball here, didn’t comply, and as a matter of law, we’re asking
the court to deny their motion because they failed to comply with the
statute.”
Characterizing the Grnjas’ argument as “somewhat hyper-technical,”
the lower court found that People’s Trust did not waive its right to
appraisal. The court issued a written order granting the motion to abate
and compel appraisal. The Grnjas appeal. We have jurisdiction. Fla. R.
App. P. 9.130(a)(3)(C)(iv).
Analysis
“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.” Fla. Ins. Guar.
Ass’n v. Waters, 157 So. 3d 437, 439-40 (Fla. 2d DCA 2015) (citing Fla.
Ins. Guar. Ass’n v. Castilla, 18 So. 3d 703, 704 (Fla. 4th DCA 2009)). To
the extent the issues raised in this appeal involve analysis of section
627.7015, Florida Statutes (2021), “[t]he interpretation of a statute is a
purely legal matter and therefore subject to the de novo standard of
review.” Kephart v. Hadi, 932 So. 2d 1086, 1089 (Fla. 2006).
As they did below, the Grnjas argue that People’s Trust waived its right
to appraisal by failing to strictly comply with section 627.7015. The
statute “sets forth a nonadversarial alternative dispute resolution
procedure for a mediated claim resolution conference prompted by the
need for effective, fair, and timely handling of property insurance claims.”
§ 627.7015(1), Fla. Stat. (2021). “The purpose of the statute [is] to use the
mediation process to encourage an inexpensive and speedy resolution of
insurance claims prior to commencing the appraisal process, or
commencing litigation.” Fla. Ins. Guar. Ass’n v. Shadow Wood Condo.
Ass’n, 26 So. 3d 610, 613 (Fla. 4th DCA 2009) (citation and internal
quotation marks omitted); see also § 627.7015(1) (“There is a particular
need for an informal, nonthreatening forum for helping parties who elect
this procedure to resolve their claims disputes because most homeowner
and commercial residential insurance policies obligate policyholders to
participate in a potentially expensive and time-consuming adversarial
appraisal process before litigation.”).
Section 627.7015(2) provides that “[a]t the time of issuance and renewal
of a policy or at the time a first-party claim within the scope of this section
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is filed by the policyholder, the insurer shall notify the policyholder of its
right to participate in the mediation program under this section.” §
627.7015(2), Fla. Stat. (2021). Section 627.7015(9) provides that, for
purposes of the statute, “the term ‘claim’ refers to any dispute between an
insurer and a policyholder relating to a material issue of fact” excepting
five dispute types not applicable to this case. § 627.7015(9), Fla. Stat.
(2021).
The legislature amended section 627.7015(2) in 2019 to add the “[a]t
the time of issuance and renewal of a policy” language. Ch. 19-108, § 15,
Laws of Fla. Prior to amendment, an insurer could comply with the statute
by providing the required notice only at the time of a dispute between the
parties relating to a material issue of fact. See generally § 627.7015(2),
(9), Fla. Stat. (2018).
An insurer’s failure to comply with section 627.7015(2) results in a
waiver of the right to compel appraisal. See § 627.7015(7), Fla. Stat. (2021)
(“If the insurer fails to comply with subsection (2) by failing to notify a
policyholder of its right to participate in the mediation program under this
section . . . , the policyholder is not required to submit to or participate in
any contractual loss appraisal process of the property loss damage as a
precondition to legal action for breach of contract against the insurer for
its failure to pay the policyholder’s claims covered by the policy.”).
On appeal, the Grnjas argue that because People’s Trust provided the
notice regarding mediation at the time of the claim but before any material
dispute of fact arose between the parties, People’s Trust waived its right to
appraisal. In support, they rely on this Court’s decision in State Farm
Florida Insurance Co. v. Lime Bay Condominium, Inc., 187 So. 3d 932 (Fla.
4th DCA 2016), and the Third District’s opinion in People’s Trust Insurance
Co. v. Lavadie, 306 So. 3d 285 (Fla. 3d DCA 2020).
In Lime Bay, the insurer sent the mediation notice five months after the
claim was filed. 187 So. 3d at 936. The policyholder argued that because
section 627.7015(2) required such notice “[a]t the time a first-party claim
within the scope of the section is filed,” the notice was untimely and
therefore the insurer did not comply with the statute. Id. at 935-36. This
Court disagreed, noting that sections 627.7015(2) and (9) “must be read
together,” and concluded “that the requirement for giving notice of the
right to participate in mediation regarding a claim does not ripen until the
insurer is put on notice that there is a dispute that relates to a material
issue of fact.” Id. at 936.
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In Lavadie, the Third District agreed with this Court’s interpretation in
Lime Bay. 306 So. 3d at 290. The policyholders had argued that the
insurer waived its right to appraisal because it failed to provide the
mediation notice at the time of the claim. Id. at 289. The Third District
disagreed, noting:
A mediation notice is irrelevant during the time when an
insured makes a “claim” and the adjustment process is
underway. If the adjustment process culminates in a payment
or repair without rising to the level of a “dispute,” the insurer
need not send the notice.
A threat of litigation, on the other hand, certainly indicates
the matter has ripened into a “dispute” within the meaning of
the statutory requirement, and the same seems true when the
insured has unequivocally rejected the insurer’s demand for
an appraisal to resolve a difference of opinions in the required
scope of work or the amount of loss.
Id. at 290.
The Grnjas rely on the language in Lime Bay and Lavadie to essentially
argue that People’s Trust’s mediation notice in this case was a nullity
because People’s Trust provided the notice before there was a “dispute”
between the parties. Instead, the Grnjas argue that “People’s Trust needed
to have sent the mediation notice when the dispute ripened and it was on
notice” of a dispute relating to a material issue of fact. We disagree.
Unlike here, where the Grnjas argue that People’s Trust provided the
mediation notice too early, Lime Bay and Lavadie addressed whether an
insurer waived its right to appraisal by providing the notice too late. While
both cases discuss when a claim is “ripe” for purposes of providing notice,
neither held that a notice provided before a dispute arises is void. The
notice requirement’s purpose “is to prevent an insurer from withholding
notification and thereby trapping ‘an uninformed insured into the very
same potentially lengthy and costly appraisal process the statute was
meant to guard against.’” Subirats v. Fid. Nat’l Prop., 106 So. 3d 997, 1001
(Fla. 3d DCA 2013) (quoting Universal Prop. & Cas. Ins. Co. v. Colosimo, 61
So. 3d 1241, 1245 (Fla. 3d DCA 2011)). While providing late notice
contravenes this purpose, providing early notice does not.
Furthermore, both Lime Bay and Lavadie analyzed section 627.7015
before the statute’s 2019 amendment. The amended statute, applicable
here, allows an insurer to comply with the statute’s mediation notice
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requirements “[a]t the time of issuance and renewal of a policy” not only
at the time of a “claim,” i.e., at the time of a dispute between the parties
relating to a material issue of fact, like the predecessor statute. See §
627.7015(2). Both Lime Bay and Lavadie addressed the pre-amendment
version of section 627.7015. See Lime Bay, 187 So. 3d at 936 (citing §
627.7015, Fla. Stat. (2012)); Lavadie, 306 So. 3d at 288 (citing § 627.7015,
Fla. Stat. (2016)). 1
Like the trial court, we conclude that People’s Trust did not waive its
right to appraisal simply by providing the required statutory notice before
a dispute arose between the parties.
Under the Grnjas’ interpretation of section 627.7015, an insurer would
comply with the statute if the insurer sent the mediation notice when a
policy was issued or renewed—when no claim or dispute even existed—
but an insurer would not comply with the statute if the insurer sent the
statutory notice after a claim was filed but before a dispute arose. We
reject this unreasonable interpretation. See Allstate Ins. Co. v. Rush, 777
So. 2d 1027, 1032 (Fla. 4th DCA 2000) (“In all, statutes must be construed
as to avoid an unreasonable or absurd result.”) (citing City of Boca Raton
v. Gidman, 440 So. 2d 1277, 1281 (Fla. 1983)). Even if such notice is
considered premature, it does not contravene the statute’s purpose of
preventing an insurer from trapping an uninformed insured into the
appraisal process. Subirats, 106 So. 3d at 1001.
As the lower court did not err in granting People’s Trust’s motion to
compel appraisal, we affirm.
Affirmed.
KLINGENSMITH, C.J., WARNER and LEVINE, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
1 The Grnjas also cite distinguishable cases in which the insurer never sent the
required notice but nonetheless sought to compel appraisal. See Colosimo, 61
So. 3d at 1243 (“In the case before us, Universal did not send notice to the
Insureds regarding the right to participate in the state mediation program as
required by section 627.7015.”); QBE Ins. Corp. v. Dome Condo. Ass’n, 577 F.
Supp. 2d 1256, 1258 (S.D. Fla. 2008) (“There is no question that QBE did not
notify Dome of its right to participate in the mediation program.”).
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