Kennedy v. First Protective Ins. Co.

271 So. 3d 106

• Court: District Court of Appeal of Florida
• Decided: March 6, 2019
• Docket: 18-1993
• Status: Published

Opinion

Third District Court of Appeal State of Florida

Opinion filed March 6, 2019. Not final until disposition of timely filed motion for rehearing.

________________

No. 3D18-1993 Lower Tribunal No. 18-919-K ________________

Michael Kennedy and Debra Kennedy, Appellants,

vs.

First Protective Insurance Company d/b/a Frontline Insurance, Appellee.

An Appeal from a non-final order from the Circuit Court for Monroe County, Timothy J. Koenig, Judge.

The Nation Law Firm and Mark A. Nation and Paul W. Pritchard (Longwood), for appellants.

Sheehe & Associates, P.A., and Karen Fultz; Jay M. Levy, P.A., and Jay M. Levy, for appellee.

Before EMAS, C.J., and SALTER, J., and LEBAN, Senior Judge.

LEBAN, Senior Judge. Plaintiffs below, Michael and Debra Kennedy (collectively “the Kennedys”),

appeal the trial court’s order granting Defendant, First Protective Insurance

Company d/b/a Frontline Insurance’s (“Frontline”) motion to compel appraisal as

to the Kennedys’ Hurricane Irma-related insurance claim.

In reviewing orders compelling appraisal, we review the trial court’s factual

findings under a competent substantial evidence standard. Fla. Ins. Guar. Ass’n,

Inc. v. Hunnewell, 173 So. 3d 988, 991(Fla. 2d DCA 2015). We review the trial

court’s application of the law to the facts de novo. Fla. Ins. Guar. Ass’n, Inc. v.

Lustre, 163 So. 3d 624, 628 (Fla. 2d DCA 2015).

The Kennedys contend, and the record reflects, that the parties corresponded

about a factual dispute just two months after the hurricane damaged the Kennedy

property. Beginning in October 2017, the Kennedys placed Frontline on notice

that their windows would need to be completely replaced. Frontline responded by

suggesting, among other things, that the Kennedys source the replacement glass

themselves and have the windows repaired. In response, the Kennedys explained

that their window model was no longer manufactured, and thus, the windows

would require a complete replacement. This dispute over replacing the glass

versus replacing the windows continued for some time.

In November 2017, the Kennedys requested that Frontline provide them with

copies of photos taken in connection with Frontline’s adjuster’s report. Frontline’s

2 Senior Concierge Adjuster, Jason James, provided the report, but refused to

provide the photos, stating, “[a]s far as the adjuster photos, unfortunately, they are

considered to be a work product [,] so we cannot release them.” In December

2017, the Kennedys threatened to file a complaint with the Florida Department of

Financial Services. Thereafter, in January 2018, Frontline provided the Kennedys

with a sample estimate which left most of their questions and concerns

unanswered. It was at this time, that the Kennedys advised Frontline of their

intent to retain counsel.

Several months later, Frontline issued, and the Kennedys received, a written

demand for appraisal pursuant to the insurance policy. Frontline’s demand,

however, was delivered to the Kennedys before Frontline provided its written

statutory notice to the Kennedys of their right to mediate, as mandated by Section

627.7015, Florida Statutes (2018). That notice followed the months of

disagreement between Frontline and the Kennedys regarding their claim.

The Kennedys filed suit on July 26, 2018, and Frontline immediately moved

to compel appraisal. The trial court granted the motion, and the Kennedys filed

this appeal following the denial of their motion for reconsideration

Section 627.7015 sets forth an alternative mediation procedure for the

resolution of disputed property insurance claims. The statute requires that “[a]t the

time a first-party claim within the scope of this section is filed by the policyholder,

3 the insurer shall notify the policyholder of its right to participate in the mediation

program under this section.” (Emphasis added). Subpart (9) defines a claim as,

“any dispute between an insurer and a policyholder relating to a material issue of

fact.” The statute’s mandatory language places the burden of notification squarely

on the insurer and provides that, absent proper notification of the right to mediate,

an insured cannot be required to participate in the appraisal process. See, §

627.7015 (2) & (7); see also, Universal Prop. & Cas. Ins. Co. v. Colosimo, 61 So.

3d 1241, 1242-44 (Fla. 3d DCA 2011).

Here, the record is replete with communications between the Kennedys and

Frontline that make clear that a dispute arose well before Frontline notified the

Kennedys of their right to mediate. Further, Frontline’s invocation of the work

product privilege is significant, because it implies that Frontline anticipated

litigation as early as November 2017. Notwithstanding this, Frontline chose to

wait until June 2018 – after making its demand for appraisal – to notify the

Kennedys of their statutory right to participate in mediation. Frontline’s actions

are in derogation of the salutary purpose of section 627.7015, i.e., to expeditiously

bring the parties together for a mediation without any of the trappings of an

adversarial process. See Colosimo, 61 So. 3d at 1245.

As we stated in Colosimo, section 627.7015 furthers the “particular need for

an informal, nonthreatening forum for helping parties . . . because most

4 homeowner’s . . . residential insurance policies obligate [the] insureds to

participate in a potentially expensive and time-consuming adversarial appraisal

process prior to litigation.” Id. at 1242.

We hold that once a dispute has arisen, an insurer may not demand appraisal

under the policy and pursuant to section 627.7015, prior to providing the insured

with notice of the right to mediate. An insurer who does so waives its right to

appraisal. Id. at 1241. Accordingly, the trial court’s order compelling appraisal is

reversed and this matter is remanded for further proceedings consistent with this

opinion.

Reversed.