Archives for September 2012

Florida Fire Damage Claim Disputes – A Bad Faith Analysis

As a South Florida homeowner, I know how hot it gets in the summer, wherein we sometimes experience extensive periods of heat, drought and lightning strikes.  These types of conditions can cause wildfires that reach your house or business, or your residence can simply experience an electrical problem or power surge, to which a fire breaks out as a result.  There are also  fires that occur due to arson, an accident (such as a product or appliance malfunction), or even a burglary gone wrong.  After a fire has devastated your home or business, several types of damage can result, including structural damage, water damage, smoke damage, roof damage, melting issues, damage to the building’s plumbing or electric systems, and damage to the personal property inside the structure (such as furniture, office equipment, appliances, clothes, papers, etc.).  A business may also suffer a significant loss of profits due to a business interruption.

When a fire occurs, a home or business owner may seek out the assistance of a fire damage insurance claim lawyer, given that insurance companies commonly look for ways to deny a property damage claim (by claiming fraud or arson), or they fail to pay the full value of the fire damage loss.  If your fire damage claim has been denied, delayed, disputed or evaluated in bad faith by your insurance company, you may have to file a bad faith lawsuit for breach of the insurance contract.

This is the type of situation that was apparent in the case of Talat Enterprises, Inc. v. Aetna Cas. and Sur. Co., 753 So.2d 1278 (Fla. 2000), wherein a restaurant/business owner that sustained fire damage to his business brought a first party bad faith lawsuit against Aetna Insurance Company.  Apparently, after Aetna made an initial payment for damage, the business owner submitted proofs of loss for additional damages, including personal property and loss of business income.  Thereafter, an appraisal award was entered in favor of the business owner, to which Aetna paid the full amount of this award.  Sometime after Aetna’s appraisal award payment, the business owner issued a statutory notification of intent to pursue a bad faith claim against Aetna under section 624.155  of the Florida Statutes.   After the sixty day cure period expired without an additional payment, the business owner filed suit against Aetna, who moved for summary judgment.  Aetna claimed that it was entitled to judgment as a matter of law under section 624.155(2)(d) (states that “[n]o action shall lie if, within 60 days after filing notice, the damages are paid or the circumstances giving rise to the violation are corrected.”),  because it paid the underlying contract damages (ie., the appraisal award) within the sixty days from the date that the business owner filed its bad faith notice (they actually paid prior to the sixty day notice). The business owner countered that Aetna was required to pay not only the damages owed under the insurance policy, but also all extra-contractual damages flowing from Aetna’s alleged failure to make a good-faith attempt to settle his claim.

The trial court granted Aetna’s Motion for Summary Judgment, finding that Aetna “ha[d] timely paid ‘the damages’ and ha[d] corrected ‘the circumstances giving rise to the violation’ ” within the meaning of section 624.155(2)(d)., and that Aetna had satisfied the dictates of section 624.155(2)(d) by paying the restaurant owners contractual damages, i.e., the amount awarded via the appraisal award, before the expiration of the sixty-day cure period.  The trial court rejected the business owners reading of the statute as requiring the insurer to pay whatever the insured demands.  The Supreme Court agreed with the Trial Court’s reasoning (was answering a question certified as a matter of great public importance), finding that a bad faith cause of action does not even become ripe until after the 60 day notice requirement expires without any payment of the damages owed under the insurance contract.  In this case, Aetna paid the amounts owed under the insurance policy, preventing a bad faith cause of action under section 624.155 for extra contractual damages.

Moral of Story: If you are a homeowner or business owner that sustains fire damage, and your attorney brings a first party fire damage insurance claim under your insurance policy, whether you live in Miramar, Cutler Bay, Palmetto Bay, Homestead, Key West, Doral, West Kendall, Davie, Sunrise, Miami Springs, Margate, Pembroke Pines or another area within Miami, Fort Lauderdale or Palm Beach, know that if your insurance company pays an appraisal award (ie., the damages owed under the insurance contract), even if you sustain extra contractual damages, a bad faith claim is prohibited under section 624.155 given that the contractual damages have been paid.

Florida Hurricane Damage Supplemental Claims – The Need to Comply With Conditions Under the Policy

It is Hurricane season, and many South Florida Homeowners may sustain some form of damage to their residences.  When this occurs, it is very important to immediately contact your insurance company in order to comply with conditions precedent under your policy.  Reason being, the insurance carriers will deny coverage under the policy if you fail to notify them within a certain amount of time of the damage (typically 60 days), and they may ask you to sit for an examination under oath (EUO) in order to get some additional support and factual information to support your claim.  When an insured fails to comply with the policy provisions, a wind, flood or homeowners insurance carrier will refuse to make payments under the policy, and these may actually be legitimate reasons to deny coverage.

This situation was apparent in the case of Edwards v. State Farm Florida Ins. Co., 64 So.3d 730 (Fla. 3d DCA 2011), where a homeowner sustained roof damage to their residence arising out of Hurricane Frances, one of the major storms of 2004.  Because the damage was within the homeowner’s deductible, State Farm, although admitting coverage, did not make any payment under the policy.  Thereafter, four years later, the homeowner made a supplemental insurance claim via a public adjuster, claiming additional damage as a result of Hurricane Frances.  When State Farm repeatedly requested that the homeowner provide documentation of the claimed loss and submit to an examination under oath, these requests were not complied with.  The insured never submitted to an EUO, nor did he provide sufficient documentation for State Farm to evaluate the supplemental claim.  The insured apparently retained a Miami Hurricane damage insurance dispute lawyer that handles supplemental claims, given that he filed suit for breach of contract after failing to receive benefits under his policy.  The trial court granted summary judgment to State Farm, finding that the policy requirements to submit to an examination under oath (if requested, and must be at a mutually convenient place and time), as well as submit documents that accurately reflect the amount of loss claimed, were conditions precedent that the insured failed to comply with, thus relieving the insurer of its duty to make payments under the policy.  The Third District Court of Appeal affirmed the trial court’s ruling.

Moral of the Story:  Whether you are a homeowner that lives in Hollywood, Dania, Weston, Homestead, Plantation, Aventura, Miami Beach, Bal Harbour, Tamarac, Kendall, Boca Raton or another area within Miami, Fort Lauderdale or Palm Beach, if you sustain roof or other types of damage to your home due to a Hurricane, flood or windstorm, make sure you comply with the various requests of your insurance carrier which may be conditions precedent to securing benefits under the policy.  These requests could be the ones at issue in the case above, namely, a request to sit for an examination under oath, or a request for supportive documentation.  A homeowner should actually consult with a Hurricane damage insurance claim lawyer to make sure these policy provisions are complied with, thereby reducing the chance of coverage issues being raised.

Florida Citizens Homeowners Insurance Claim Disputes – Can I sue Citizens in the County Where I live?

hurricane blown palm treesSouth Florida homeowners still need to worry about Hurricane season, as we have a little more than two months to go.  With the passing of Hurricane Isaac, which was a tropical storm when it hit Florida, some homeowners throughout Miami-Dade, Broward and the Palm Beaches sustained some form of property damage.  Whether it was roof damage from a falling tree, window damage from a projectile, or water damage from the storm surge,  a claim will have to be made with your Hurricane, Windstorm, Flood and/or homeowners insurance company.  As a result, many South Florida homeowners have sought the assistance of a Hurricane/windstorm damage insurance claim lawyer to assist them in recovering insurance proceeds to repair their property, get alternative living expenses for the time it takes to repair the house damage, or assist them in an insurance claim dispute regarding coverage under their policy.

With Citizens being the primary insurer that insures Florida Homeowners against Hurricanes and Windstorms, South Florida homeowners who did sustain damage from Tropical Storm Isaac will likely be making a claim against Citizens in the very near future.  The question is, if Citizens provides a very low estimate or denies coverage under your policy all together, and you file a breach of insurance contract lawsuit in Miami-Dade, Broward or Palm Beach Counties, can Citizens remove the case to Leon County (ie, Tallahassee), given that is where their primary business headquarters reside.

According to the Third District Court of Appeal, they can.  In the recently decided case of Castle Beach Club Condominium, Inc. v. Citizens Property Ins. Corp., 2012 WL 3101528 (Fla. 3d DCA 2012), the Castle Beach Club Condominium sued Citizens Property Insurance Corp. (a state entity), for breach of contract and an appraisal in Miami–Dade Circuit Court. The trial court transferred the case to Leon County based upon Citizens’ assertion of Florida’s common law home venue privilege (Florida common law provides that the state and its agencies or subdivisions enjoy the home venue privilege, ie., venue in a suit against the State, or an agency or subdivision of the State, absent waiver or exception to the privilege, is proper only in the county in which the State, or the agency or subdivision of the State, maintains its principal headquarters).  The Third District Court of Appeal affirmed this decision, holding that Citizens is a state entity protected by the home venue privilege,  no exception to the home venue privilege applied, and Citizens did not waive the privilege.

Moral of the Story: If you are a homeowner that sustains roof  or water damage due to a Hurricane or windstorm, and your lawyer makes a claim against Citizens under your Hurricane/windstorm insurance policy, whether you live in Miramar, Cutler Bay, Palmetto Bay, Homestead, Key West, Doral, West Kendall, Davie, Sunrise, Miami Springs, Margate, Pembroke Pines or another area within Miami, Fort Lauderdale or Palm Beach, know that Citizens can remove the lawsuit to Leon County and force you to litigate hundreds of miles away.