Chipped Tile Insurance Claims: Are They Excluded Under My Florida Homeowners Insurance Policy?

Florida Chipped Tile Insurance Claims_fightsforyou.netWhether you live in North Florida, Central Florida or South Florida, “chipped tile” or “broken tile” claims are rampant in this state and in such an abundance, its very similar to the way gold mining was in California during the 1800’s. However, these chipped tile insurance claims took a huge hit earlier this year in a Florida Court decision that likely upset many of the property damage restoration contractors, public adjusters and even some Miami, Florida chipped tile insurance claim attorneys, wherein these chipped or broken tile damage claims makeup a good part of their business. In the case of  Ergas v. Universal Property and Cas. Ins. Co., 114 So.3d 286 (Fla. 4th DCA 2013), the Fourth District Court of Appeal (governs Broward and Palm Beach Counties), ruled that a homeowner who dropped a hammer on their tile floor causing chips or damage to same, that this chipped tile or broken tile damage was excluded under their Florida homeowners insurance policy under the “marring exclusion.”

The insured’s homeowners insurer, Universal Property and Casualty, denied their chipped tile damage claim under the “marring exclusion” within their Florida insurance policy, to which the trial court granted summary judgment to Universal (who argued that the chipped tile constituted “marring” and thus was excluded in the insurance policy) and dismissed the insured’s lawsuit for insurance coverage under their policy.  The policy stated the following: Section I: We insure against risk of direct loss to property … We do not insure, however, for loss: … 2. Caused by: … (e) Any of the following: (1) Wear and tear, marring, deterioration…. Of note, Universal argued that “marring” was not ambiguous because it could mean either a sudden act or one that took place over time….and interpreted the word to mean any damage at any time that made the property less than perfect.  The insured argued that the damage caused by dropping the hammer was sudden and thus came within the coverage of the insurance policy.

The Fourth District noted that the Florida insurance policy at issue was an “all risk policy” that covered all fortuitous losses, although it did not cover all conceivable losses.  The Court further went on to hold that  the “chipped tile” damage caused by the hammer dropping constituted marring and thus was excluded from policy coverage, to which they thus affirmed the final summary judgment entered by the trial court.

Moral of the Story: if you are a South Florida homeowner (whether a townhouse, home, condo, duplex, triplex or the like) and happen to damage, break or chip the tile, marble or granite floors in your residence (could be by dropping a hammer, plate or any other type of object), whether you live in Hollywood, Pensacola, Ocala, Cape Coral, Saint Augustine, Aventura, Miami Beach, Hialeah, Gainsville, Palm Coast, Port St Lucie, Port Orange, West Kendall, Homestead, the Florida Keys, Cutler Ridge, Palmetto Bay, Daytona, Orlando, Tampa, Fort Myers, Naples, Jacksonville, Stuart, Jupiter or another area within Miami, Fort Lauderdale or Palm Beach, or anywhere in Miami-Dade, Broward, Palm Beach or Monroe County, know that you if you hire a Miami, Florida chipped tile insurance claim attorney to handle your denied chipped tile insurance claim, according to this new opinion out of the Fourth District Court of Appeal, you may be fighting an uphill battle given this chipped tile or marble damage could be considered excluded under your Florida Homeowners insurance policy under the “marring” exclusion.

All-Risk Homeowners Insurance Policy: Does it Cover Water Damage Incurred by a Broken and Deteriorated Pipe Under Your House?

Florida insurance claims_fightsforyou.netAccording to a recent case out of the Third District Court of Appeal, this type of policy can cover damages that frequently occur when a pipe failure below one’s floor or concrete slab occurs due to the pipe’s deterioration over the years.  Obviously, each homeowner’s case is different depending on the language within their respective homeowners insurance policy, as well as the facts surrounding the insurance claim loss.

In the case of Cheetham v. Southern Oak Ins. Co., 114 So.3d 257 (Fla. 3d DCA 2013), a Florida homeowner suffered damage to their home when a pipe located on the “residence premises” broke and/or collapsed due to age and deterioration (which usually provides insurance carriers ammo to deny claims under the notable and common “wear and tear exclusion”). As the pipe was located underneath the ground, debris entered the pipe, forming a blockage, which ultimately caused waste water and/or material to back up through the blocked pipe and into the “residence premises” through drains.  The homeowner filed a claim with their insurer, Southern Oak, after their home sustained water damage.   After Southern Oak denied the claim, the homeowner filed suit, claiming the loss was covered by their all-risk homeowners’ insurance policy.   In response, Southern Oak asserted that a “Water Damage” exclusion was applicable, and, therefore, the homeowners loss was not covered.

The Court noted the following relevant provisions within the policy:

HOMEOWNERS 3—SPECIAL FORM

SECTION I—PERILS INSURED AGAINST

A.  Coverage A—Dwelling And Coverage B—Other Structures

1.  We insure against risk of direct physical loss to property described in Coverages A and B.

2.  We do not insure, however, for loss:

a.  Excluded under Section I— Exclusions;

…..

c. Caused by:

…..

(6) Any of the following:

(a) Wear and tear, marring,  deterioration;

…..

Exception To c.(6)

Unless the loss is otherwise excluded, we cover loss to property covered under Coverage A or B resulting from an accidental discharge or overflow of water or steam from  within a:

(i) Storm drain, or water, steam or sewer pipe, off the “residence premises”;  or

(ii) Plumbing … system…  on the “residence premises ”.  This includes the cost to tear out and replace any part of a building, or other structure, on the “residence premises”, but only when necessary to repair the system…. However, such tear out and replacement coverage only applies to other structures if the water … causes actual damage to a building on the “residence premises”.

…..

We do not cover loss to the system … from which this water … escaped.  For purposes of this provision, a plumbing system … does not include a sump, sump pump or related equipment or a roof drain, gutter, down spout [sic] or similar fixtures or equipment.

…..

Section I—Exclusion A.3. Water Damage, Paragraphs a. and c. that apply to surface and water below the surface of the ground do not apply to loss by water covered under c.(5) and (6) above.

…..

B. Coverage C—Personal Property

We insure for direct physical loss to the property described in Coverage C caused by any of the following  perils unless the loss is excluded in Section I—Exclusions.

…..

12. Accidental Discharge Or Overflow Of Water Or Steam

a.  This peril means accidental discharge or overflow of water … from within a plumbing … system….

b. This peril does not include loss:

(1) To the system … from which the water … escaped;

…..

(3) On the “residence premises” caused by accidental discharge or overflow which occurs off the “residence premises”;  ….

…..

c. In this peril, a plumbing system … does not include a sump, sump pump or related equipment or a roof drain, gutter, downspout or similar fixtures or equipment.

d. Section I—Exclusion A.3. Water Damage, Paragraphs a. and c. that apply to surface water and water below the surface of the ground do not apply to loss by water covered under this peril.

…..

SECTION I—EXCLUSIONS

A.  We do not insure for loss caused directly or indirectly by any of the following.   Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.   These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.

…..

3. Water Damage

Water Damage means:

a.  Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind;

b. Water or water-borne material which backs up through sewers or drains or which overflows or is discharged from a sump, sump pump or related equipment;  or

c. Water or water-borne material below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure; caused by or resulting from human or animal forces or any act of nature.

The Court addressed the following issues: (1) whether the all-risk policy is ambiguous where it provides for coverage for the “accidental discharge” of water “within a … plumbing … system … on the ‘residence premises’ ” caused by “deterioration,” but excludes “water damage” caused by “[w]ater or water-borne material which backs up through sewers or drains,” and (2) whether the exclusion applies when a pipe located within the plumbing system of the “residence premises” breaks due to deterioration, causing debris to enter the pipe and forming a blockage, and as a result of the blockage, waste water and/or material backed up through the blocked pipe “within” the “plumbing system” and then into the “residence premises” through drains.

The Court opined that at first glance, without examining the “Section I—Exclusions,” it would appear that the claimed loss would not be covered because the loss was caused by a deteriorated pipe, ie., one of the most common exclusions insurance carriers cite to deny homeowners insurance claims.

However, the policy also included an exception to the no-coverage provision involving “deterioration,” which provided as follows:

Exception To c.(6)

Unless the loss is otherwise excluded, we cover loss to property covered under Coverage A [Dwelling] or B [Other Structures] resulting from an accidental discharge or overflow of water … from within a:

…..

(ii) Plumbing … system … on the “ residence premises ” ….

Therefore, the Court noted that based on paragraph (ii) under “Exception To c.(6),” an “accidental discharge” of water from within a plumbing system caused by deterioration is a covered loss, “[u]nless the loss is otherwise excluded.” Exclusions pertaining to water damage are found in Section I A.3. of the policy.

SECTION I—EXCLUSIONS

A. We do not insure for loss caused directly or indirectly by any of the following….

…..

3. Water Damage

Water Damage means:

a. Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind;

b. Water or water-borne material which backs up through sewers or drains or which overflows or is discharged from a sump, sump pump or related equipment; or

c. Water or water-borne material below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure; ….. caused by or resulting from human or animal forces or any act of nature.

The Court noted that the exclusion above related to water damage applied to damage caused by outside forces unrelated to the residence premises’ plumbing system.  As such, the Court held that “because the claimed loss in this case was caused by the deterioration of a pipe within the plumbing system, which caused water or water-borne material emanating from the residence premises’ plumbing system to back up into the residence premises,” the homeowner’s loss was a covered loss under the policy.

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 water or mold damage to your home due to a pipe beneath your floor or concrete slab that bursts due to deterioration or wear and tear, and if your homeowners insurance carrier denies your claim under the “wear and tear” exclusion, make sure you consult with a homeowners insurance damage claim attorney to verify whether your policy may provide you coverage notwithstanding the letter from your insurance carrier denying your claim.

Florida Hurricane Insurance Claims – The Need to Immediately Notify Your Insurance Carrier of the Windstorm Loss Under the Policy

Florida hurricane insurance claims_fightsforyou.netIn one of my previous posts, I discussed the amount of time an insured actually has to provide notice to their insurance company regarding a Hurricane damage claim (per the insurance policy provisions), after they have been the victim of a property damage loss.  See my post titled Florida Hurricane/Storm Damage Insurance Claims – How Long Do I Have to Provide Notice to My Insurer Under My Insurance Policy?

Recently, another case came out of the Fourth District Court of Appeals (governs the Palm Beach County area) which reinforces the importance of a homeowner’s immediately putting on notice their insurance carrier given the post-loss policy provision obligation that generally requires that the insurer immediately be notified after a Hurricane damage loss.  In Slominski v. Citizens Prop. Ins. Corp., 2012 WL 4511322 (Fla. 4th DCA 2012), a homeowner that sustained damage due to Hurricane Wilma made minimal repairs that came in below their policy’s deductible. Three and a half years later, the homeowner filed a claim with Citizens based on wind and water damage to their home — they waited to file a claim due to their belief that the damage sustained fell below the policy’s deductible. Citizens investigated the claim, whereby they concluded that “the damages reported cannot be attributed to Hurricane Wilma due to the amount of time that has transpired since the purported date of loss to the present date.” Citizens further noted the homeowner’s failure to comply with post-loss duties, a condition precedent to reimbursement of a claim, pursuant to the policy. The policy stated that they were to “[g]ive prompt notice to [Citizens].”

In response to Citizens’ denial of their claim (likely by way of a denial letter), the homeowner apparently sought the assistance of a Palm Beach County Hurricane/storm damage insurance claim lawyer to assist them in recovering moneys to fix their property given the insurance claim dispute regarding coverage under their policy. After suit was filed  filed suit, Citizens moved for summary judgment alleging that the homeowner “breached the post loss policy conditions by failing to promptly notify Citizens of the loss which in turn would have allowed Citizens to timely investigate this matter within a reasonable time frame after the loss,” thus prejudicing Citizens and relieving Citizens of its duty to provide coverage for the loss. The trial court granted Citizens’ motion for summary judgment, to which the Forth District Court of Appeal Affirmed.  The Fourth District noted that in delayed notice cases, “while prejudice to the insurer is presumed, if the insured can demonstrate that the insurer has not been prejudiced thereby, then the insurer will not be relieved of liability merely by a showing that notice was not given ‘as soon as practicable.’ ”  Once delayed notice is raised by the insurance carrier, the burden shifts to “the insured to show lack of prejudice where the insurer has been deprived of the opportunity to investigate the facts.”

In this case, the homeowner submitted affidavits from a contractor and engineer in opposition to Citizens’ motion for summary judgment, although these affidavits apparently contradicted the deposition testimony of the respective individuals (they originally testified that they could not conclusively establish if the damage was caused by Hurricane Wilma, whereas the affidavits did say the damage was caused by Wilma).  As such, the Court rejected the affidavits and ruled for Citizens given the lack of evidence in opposition to their summary judgment.  The Fourth District distinguished this case from Stark v. State Farm Fla. Ins. Co., 95 So.3d 285 (Fla. 4th DCA 2012), another late notice case (notified State Farm about three and a half years after the fact) where the insured submitted affidavits of an engineer and public adjuster indicating that the damage to the insureds’ roof was caused by Hurricane Wilma.  On summary judgment, the trial court ruled that State Farm was “presumed to be prejudiced” by the untimely notice.  The Fourth District reversed, finding that there were issues of fact as to whether State Farm was prejudiced in their inability to investigate the loss.

A case also recently came out of the Southern District of Florida on this “late notice” issue.  In Aspen Speciality Ins. Co. v. River Oaks of Palm Beach Homeowner’s Ass’n, Inc., 2012 WL 3260398 (S.D. Fla. 2012), the Homeowner’s association sustained roof damage due to Hurricane Wilma as a result of wind. They put Aspen on notice fairly quickly, although the loss was apparently below the deductible.  Five years later, Aspen retained a separate adjusting company that adjusted the roof loss at 7.5 million dollars, and later submitted a revised loss estimate at 13.5 million dollars.  After the homeowner’s association filed a declaratory action to determine coverage under the policy, Aspen maintained that they were barred from coverage under the policy for violating the policy’s post-loss provision — namely, to provide prompt notice of the loss or damage, including a description of the property involved; give a description of how, when and where the loss or damage occurred; at Aspen’s request, the insured was to give a complete inventory of the damaged and undamaged property including quantities, costs, values and amount of loss claimed; permit an inspection of the property, books and records; and to cooperate in the investigation or settlement of the claim. The Aspen Court cited to Haiman v. Federal Ins. Co., 798 So.2d 811 (Fla. 4th DCA 2001) for the premise that “[a] total failure to comply with policy provisions … may constitute a breach precluding recovery from the insurer as a matter of law. If, however, the insured cooperates to some degree or provides an explanation for its noncompliance, a fact question is presented for resolution by a jury.”

This “partial compliance” test seems to be one of the standards a court will look to in deciding whether an insured has breached their post loss obligations under their policy, in addition to analyzing whether the insurer has been prejudiced by late notice of the Hurricane loss (ie., whether the passage of time will prevent the insurance company from analyzing the cause of the loss).

All homeowners should note that these cases above, and the cases discussed in my previous post on this subject, are related to Hurricane Wilma losses or before.  For analysis of statute of limitations and statutory notice requirements related to property damage and Hurricane/windstorm losses after May 17, 2011, see my previous post regarding the changes in Florida law in 2011.

Moral of the Story: Whether you are a homeowner that lives in Coral Springs, Cooper City, Hallandale, Boca Raton, Homestead, Key Biscayne, Weston, Pompano Beach, Tamarac, Plantation, Delray, Deerfield Beach or another area within Miami, Fort Lauderdale or Palm Beach, after a Hurricane or windstorm, make sure to immediately inspect your property to determine if any damage was caused by the storm, especially the roof, walls and windows.  In being proactive, you will be able to comply with the post-loss notice and condition precedent requirements under your insurance policy and hopefully avoid an insurance coverage dispute or Hurricane damage insurance lawsuit as referenced in the cases above.

Florida First Party Property Damage Insurance Claim Disputes and Denials- Failing to File a Sworn Proof of Loss Could be Fatal to Your Claim

As a South Florida Homeowner, given that we have so many forms of inclement weather (Hurricanes, tornadoes, Tropical Storms, hail storms, wind storms, downpours/floods, etc.), it is very important to have insurance to combat the significant property damage caused by these occurrences. However, even if you have the necessary insurance, whether a wind, Hurricane, flood or homeowners insurance policy, if you do not comply with the many post-loss obligations under your policy, it will be like having no insurance at all. Some of the post loss obligations (usually considered conditions precedent under your policy given that the policy will say these need to be complied with prior to suit being instituted) will include notifying your insurance company within a certain amount of time of the damage (typically 60 days), they may ask you to sit for an examination under oath (EUO) in order to get some additional support and factual information on your claim, or as is discussed in this article, they may ask you to submit a sworn proof of loss (a statement under oath delineating the amount of damage that occurred, the date of loss, etc.—this is typically taken care of by a public adjuster). When an insured fails to comply with policy provisions such as these in whole or in part, a wind, flood or homeowners insurance carrier may refuse to make payments under the policy, even if the damage is caused by a covered peril.  This will thereby necessitate that one hire a Florida insurance claim lawyer to file a first party property damage lawsuit against their insurer for breach of contract, declaratory relief and/or possibly bad faith.

So, how fatal to a claim is the failing to file a sworn proof of loss before a first party property damage lawsuit is instituted against your insurance company for failure to pay benefits under your policy? Well, case law is not so clear on this subject. In Starling v. Allstate Floridian Ins. Co., 956 So.2d 511 (Fla. 5th DCA 2007), a homeowner retained a fire damage insurance claim lawyer for severe damage that was caused to her home. A breach of contract action was subsequently brought on a property insurance policy claim. Apparently, Allstate Floridian Insurance Company refused to pay benefits under the fire insurance policy because of the homeowner’s failure to timely complete sworn proof-of-loss forms (were required within 60 days of the loss). The Appellate court affirmed the trial court’s entering of summary judgment in favor of Allstate, finding that the homeowner materially breached one of the fire policy’s condition precedents, namely, failing to file a sworn proof of loss — thereby barring a jury trial on the matter. Of note, during the homeowner’s examination under oath (EUO), she testified that she had already mailed in a proof of loss form, and she also brought a partially-completed form to the EUO where it was examined by Allstate’s representative. Moreover, during the EUO, the homeowner explained that she had not yet completed the form because she had not yet been able to calculate the total value of her claim. Given the homeowners attempt to comply with the conditions precedent under her policy, the dissent in Starling cited to the Fourth District Court of Appeal’s decision of Haiman v. Fed. Ins. Co., 798 So.2d 811, 812 (Fla. 4th DCA 2001), wherein if “ ‘the insured cooperates to some degree or provides an explanation for its noncompliance, a fact question is presented for resolution by a jury’ ” on the question of whether “ ‘failure to comply with policy provisions made a prerequisite to suit’ ” constitutes a material breach of the policy so as to preclude recovery from the insurer. The dissent felt that because the homeowner partially complied with the policy requirement, and provided an explanation for her noncompliance, that a question of fact existed as to whether the homeowner materially breached her policy by waiting eight months until after the lawsuit was filed before submitting the final, notarized form.

A more recent decision came out of the Fourth District Court of Appeal (May 2012) in Correa v. Sunshine State Ins. Co., 2012 WL 1859704 (Fla. 4th DCA 2012), wherein they cited to Starling v. Allstate Floridian Ins. Co. (affirming a final summary judgment for the insurer where the insured did not complete a sworn proof-of-loss form before suing the insurer). It is presumed that the homeowner failed to file a sworn proof of loss prior to instituting suit against the Sunshine State Insurance Company, to which the trial court granted summary judgment to the insurer and barred any jury trial from occurring on the property loss. Given the Fourth District’s prior decision in Haiman v. Fed. Ins. Co., it is presumed that the insured did not attempt to cooperate to some degree or provide an explanation for their noncompliance.

Another case that also lends some clarity to this issue is First Home Ins. Co. v. Fleurimond, 36 So.3d 172 (Fla. 3d DCA 2010), wherein a homeowner sustained damage during Hurricane Wilma. The insured submitted a claim, as well as a an additional claim through a public adjuster when additional damage occurred as a result of the initial damage (roof damage allowed water to come in, thereby damaging the interior portion of the home).  When First Home Insurance Company paid less then what the insured felt the full value of the claim was, the insured  retained a Florida Hurricane damage insurance claim attorney and filed suit under the policy, demanding appraisal. The insurer opposed the appraisal demand, saying that the insured had breached his policy obligations — one of which was said to be the failure to provide a sworn proof of loss.  The Third District held that the insured’s failure to file a sworn proof of loss did not bar him from bringing suit against his homeowner’s insurer seeking appraisal of the loss he sustained in a Hurricane, even though the policy required a sworn proof of loss to be filed within 60 days of being requested by the insurer — the insurer never requested a sworn proof of loss prior to the suit being filed.

It will be interesting to see how the recent cases coming out (namely, Soronson v. State Farm Florida Ins. Co., 2012 WL 3022349 (Fla 4th DCA 2012)regarding failure to comply with conditions precedent and what amount of prejudice is created to the insurer, will affect a homeowner who files suit and may not have exactly complied with their post loss obligations under their homeowners insurance policy.

Moral of the Story: Whether you are a homeowner that lives in Orlando, Fort Myers, Naples, Bonita Springs, Port St. Lucie, the Florida Keys, Tampa, St. Petersburg, Cape Coral, Sarasota, Gainesville, Jacksonville or an area within Miami, Fort Lauderdale or Palm Beach, if you sustain roof, tile, marble, window or other types of damage to your home due to a Hurricane, flood, hail storm, windstorm or fire, it is of prime importance to make sure one complies 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 cases above, namely, the providing of a sworn proof of loss. A homeowner should actually consult with a Florida Hurricane, storm or property damage insurance claim lawyer to make sure these policy provisions are complied with, thereby reducing the chance of coverage issues being raised.  At the end of the day, these coverage denials (will actually get a denied claim letter from your insurance carrier) and disputes may prevent you from being able to have a jury trial on your first party property damage insurance claim.

For additional analysis on policy conditions precedent and/or post loss obligations, and how failure to comply with same may affect one’s ability to file a first party lawsuit against their insurer, see my previous posts on Florida Hurricane Damage Supplemental Claims and Florida Hurricane Insurance Claims and providing notice of the loss to the insurer.

Florida Hurricane Damage Insurance Claims – Citizens is Immune From First Party Bad Faith Suits

Florida Hurricane Damage Attorney_fightsforyou.netIf you live in South Florida and own a townhouse, condominium, house or other property, and you are insured by Citizens for Hurricane, windstorm, tornado or other storm damage, it appears that Citizens has no incentive to adjust claims in good faith given that they apparently are immune from first party bad faith lawsuits — so says the Fifth District Court of Appeal in the case of Citizens Property Insurance v. La Mer Condominium Association, 37 So.3d 988 (Fla. 5th DCA 2010).

A first party action is when a homeowner brings a claim against their own insurance company for some form of damage to their residence or property, whether it arises out of a Hurricane or other type of storm damage, or it can arise out of a pipe burst, leaky sink or toilet/washer failure.  When the claim is made, the property damage insurer may wrongfully deny your claim, delay and take forever to adjust or investigate the claim, or simply undervalue the claim by paying less than the property damage is worth.  When this occurs, a homeowner will usually hire a Hurricane damage or homeowners insurance claim lawyer to bring a lawsuit against the insurance company for breach of contract and possibly bad faith.

Well, at this time, the law forbids a homeowner from bringing a bad faith lawsuit against Citizens.  In the La Mer Condominium Association case, where the condo association apparently brought a first party bad faith insurance claim for damage arising out of a Hurricane or some other storm, the court cited to its previous decision in Citizens Property Insurance Corp. v. Garfinkel, 25 So.3d 62 (Fla 5th DCA 2009), where they held that Citizens is immune from first-party bad faith claims pursuant to sections 627.351(6)(r)(1) and 624.155(1)(b)(1), Florida Statutes.

Moral of Story:  whether you live in Coral Springs, Cooper City, Hallandale, Boca Raton, Homestead, Key Biscayne, Weston, Pompano Beach, Tamarac, Wilton Manners, Hialeah or another area within Miami, Fort Lauderdale or Palm Beach, your Florida Hurricane damage insurance attorney will not be able to bring a bad faith lawsuit against Citizens.  Clearly, this holding is a shield to Citizens and a dent in the homeowner’s arsenal in making sure their insurance claims are adjusted fairly.

For additional Hurricane damage and bad faith claim analysis, see my previous post. For additional Citizens Insurance claim denial and dispute analysis, see my previous post.

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.

Florida Hurricane/Storm Damage Insurance Claims – How Long Do I Have to Provide Notice to My Insurer Under My Insurance Policy?

Right now down here in South Florida, we are in the middle of Hurricane season, thankfully dodging a bullet down here in Miami with Tropical Storm Isaac.  Nevertheless, we were not so lucky with regards to the 2005 season, wherein Hurricane Katrina and Wilma decided to make a visit, and the 2004 season, wherein Hurricanes Frances and Jeanne decided to strike Florida.  Many homeowners throughout the Miami-Dade, Fort Lauderdale and  Palm Beach areas sustained some form of water, wind or flood damage from these storms, most notably roof and window damage.   As a result, many South Florida homeowners have sought the assistance of a Hurricane/storm damage or homeowners insurance claim lawyer to assist them in recovering moneys to fix their property (given the potential for an insurance company’s low damage estimate), or assist them in an insurance claim dispute regarding coverage under their policy.

A couple of the issues that arise quite frequently and which a homeowner should be aware of, are the notice and sworn proof of loss provisions contained within a property damage insurance policy.   Whether it is a flood, wind or homeowners insurance policy, there typically will be some type of language within the policy that states the insured shall give immediate notice to the insurance company after a loss has been incurred, and that the insured shall submit a sworn proof of loss within a certain amount of days of the loss, say 60 days.  These provisions are typically considered  “post-loss condition precedents,”  given that another provision in the policy will usually say that no action can be brought against the insurance company unless there was compliance with the policy provisions.  Given that the notice and sworn proof of loss provisions must be complied with, in cases where they are not, an insurance company may consider this a material breach of the policy by the insured, thereby allowing the insurance company to deny coverage under the policy.

Several cases have recently been decided which lend some clarity as to the amount of time an insured actually has to provide notice to their insurance company regarding a Hurricane damage claim (per the insurance policy provisions), after they have been the victim of a property damage loss.  In Kroener v. Florida Ins. Guar. Ass’n, 63 So.3d 914 (Fla. 4th DCA 2011), the Fourth District Court of Appeal held on June 22, 2011, that a homeowner who sustained interior and exterior damage (roof leak) from Hurricane Wilma and who notified their insurance company two years and two months after the loss, that this was not “prompt notice” as a matter of law (per the notice requirement in the insurance policy) and therefore barred their claims.

Then on July 18, 2012, the Fourth District decided Kramer v. State Farm Florida Ins. Co., 2012 WL 2913189 (Fla 4th DCA 2012), where a homeowner who sustained roof damage in 2004 from Hurricane Frances and Hurricane Jeanne, didn’t make a claim to their insurance company until May 2009, almost five years from the dates of loss.  The insureds did not immediately notify State Farm of the loss, nor did they submit a sworn proof of loss within 60 days of the loss (per the policy provisions).  State farm denied coverage, and the insured sued them for breach of contract under the insurance policy.  The Court noted that despite the fact that a notice of loss and a sworn proof of loss are conditions precedent to suit (because the policy also included a provision that said no action shall be brought unless there has been compliance with the policy provisions), if the insured breaches the notice provision[s], prejudice to the insurer will be presumed, but may be rebutted by a showing that the insurer has not been prejudiced by the lack of notice.  In this case, the insured was unable to rebut the presumption of prejudice, as the insured submitted an affidavit from an engineer that essentially said he could not determine the cause of the damage, whether it was from a hurricane or some other cause.  The Kramer court thus dismissed the insureds claim.  Of note, the Kramer court noted their prior decision in Kroener, stating that holding was based upon a record similar to this case, where the insurer argued that it was prejudiced by the insureds’ untimely pre-suit notice of the alleged loss, and the insureds did not come forward with counter-evidence sufficient to reveal a genuine issue as to whether the insurer was prejudiced, ie., one must still go through the analysis of whether the insurance company was prejudiced (ie., unable to determine the cause of loss) by such late notice from their insured.

Then on July 25, 2012, the Fourth District decided Soronson v. State Farm Florida Ins. Co., 2012 WL 3022349 (Fla 4th DCA 2012), where a homeowner sustained roof damage from Hurricane Wilma in 2005, yet did not notify State Farm until February 2009 (3 years 4 months) of the loss, when they filed a lawsuit against them for failing to pay benefits under their insurance policy.  The Court went through the same analysis as in the Kramer case, noting that although the homeowner failed to comply with their pre-suit notice requirements under the policy (both the immediate notice and submitting of the sworn proof of loss within 60 days of the loss), this merely created a presumption of prejudice against the insurer, but may be rebutted by a showing that the insurer has not been prejudiced by the lack of notice.  The homeowner submitted an affidavit that attached “unsworn” engineer reports.  The Court felt these documents were not sufficient to rebut the presumption of prejudice against State Farm in being unable to investigate the loss due to the late notice.  Again, the Soronson court noted their prior decision in Kroener, stating that holding was based upon a record similar to this case, where the was prejudiced by the insureds’ untimely pre-suit notice of the alleged loss, and the insureds did not come forward with counter-evidence sufficient to reveal a genuine issue as to whether the insurer was prejudiced.

Most recently, on August 1, 2012, the Fourth District decided Leben v. State Farm Florida Ins. Co., 2012 WL 3101336 (Fla. 4th DCA 2012), where a homeowner sustained roof damage from Hurricane Wilma in 2005, yet did not notify State Farm until February 2009 (3 years 4 months) of the loss, when they filed a lawsuit against them for failing to pay benefits under their insurance policy.  The Court went through the same analysis as in the Kramer and Soronson cases, noting that although the homeowner failed to comply with their pre-suit notice requirements under the policy (duty to provide  immediate notice), they were able to create an issue of fact as to the rebuttable presumption of prejudice against the insurance company. The homeowner submitted two reports, one from a leak detection company and another from a roofing company, both reports stating they could unequivocally say damage was caused by Hurricane Wilma despite the fact the homeowner made repairs after the storm. The Court felt these documents were sufficient to rebut the presumption of prejudice against State Farm in being unable to investigate the loss due to the late notice, thereby allowing them to go to trial and let a jury determine whether the late notice prejudiced State Farm’s ability to investigate the loss.

All homeowners should note that these cases above are related to Hurricane Wilma losses or before.  For analysis of statute of limitations and statutory notice requirements related to property damage and Hurricane/windstorm losses after May 17, 2011, see my previous post regarding the changes in Florida law in 2011.

Moral of the Story: Whether you are a homeowner that lives in Hollywood, Dania, Weston, Plantation, Aventura, Miami Beach, Bal Harbour, Coral Gables, Kendall, Pinecrest or another area within Miami, Fort Lauderdale or Palm Beach, after a Hurricane or windstorm, make sure to have your property inspected to determine if any damage was caused by the storm, especially the roof and windows.  That way, you will be able to comply with the notice requirements under your insurance policy and hopefully avoid an insurance claim dispute as referenced in the cases above.

Florida Condo Owner Homeowners Insurance Claims – The Condo Above Me (Second Floor Unit Upstairs) Leaked, What Are My Options?

As South Florida Condominium owners know, many things can go wrong to cause water damage (and resultant mold) to their condominium unit.  One of the most common water intrusion events that can occur is when a neighbor’s condominium unit above yours  has a water loss or water leak, which then gets into your unit through the common elements.   Whether you live in Hollywood, Dania, Weston, Plantation, Aventura, Miami Beach, Bal Harbour, Coral Gables, Kendall, Pinecrest or another area within Miami, Fort Lauderdale or Palm Beach, many unit owners are seasonal (ie., snow birds) and are thus not around to maintain their units on a monthly basis.  As such, it is not uncommon, especially during the Summer, for a neighbor’s condominium unit above yours, the unit on the second floor, the unit next to yours (unit to unit), or the unit upstairs, to experience pipe leaks, burst pipes and plumbing, broken water heaters, shower pan leaks, a pipe burst in the washer, failed pipe in the dishwasher, failed toilet seals, toilet tank leaks, window leaks and/or other types of water intrusions and condo water leaks.  Reason being, no one is living in the unit for months on end to fix any problems that may arise.  When these types of losses occur, one may seek out a Florida condominium water damage insurance claim attorney or Florida condo leak lawyer to get some guidance on how to proceed in resolving Florida condo insurance claims of this type.

The first thing the lawyer will likely do is have you put your own homeowners insurance carrier on notice.  While there are certain exclusions in the policy, your insurance company may cover some or all of the damage such as providing payments for temporary/alternative living arrangements (ALE/loss of use), as well as temporary repairs like mold remediation (one has a duty to mitigate their damages).

As for the lawyer’s investigation,  the source of the water intrusion needs to be determined. Reason being, while the unit owner above may bear some responsibility, the Condominium Association may also bear some responsibility.  Thus, the attorney will probably direct his or her investigation as to whether the upstairs water loss originated from a common element or an item that is the responsibility of the unit owner.  A Declaration of Condominium typically classifies a common element (in relation to items which are a unit owners responsibility) as as anything not touching air, ie., everything behind the walls and ceilings minus the coverings.  As for the Florida Statutes,  718.108(1) states that common elements include: (a) The condominium property which is not included within the units; (b) Easements through units for conduits, ducts, plumbing, wiring, and other facilities for the furnishing of utility services to units and the common elements; (c) An easement of support in every portion of a unit which contributes to the support of a building; and (d) The property and installations required for the furnishing of utilities and other services to more than one unit or to the common elements.  Items which are not common elements and which would be the responsibility of the second floor unit owner, would include pipes underneath the kitchen or bathroom sinks,  a toilet seal that fails or a water heater that explodes.

Certainly, if it is determined that the unit owner above had been out of the condo unit for months on end and a water leak resulted due to to their failure to maintain the inside of their property, the unit owner above will likely have some responsibility.  In this scenario, hopefully they had homeowners insurance, such that a claim can be made to their insurance company.  Even in this scenario, the condominium association still may bear some responsibility for the damage to your unit.  Where water losses are caused by sudden and unforeseeable events (the condominium association will likely argue this type of event was sudden and unforeseeable), these types of losses are considered casualties.  When a casualty occurs, a condominium association’s insurance could come into play.  Pursuant to the Declaration of Condominium, the Association will have a responsibility to maintain, repair and replace common elements.  Pursuant to Florida Statute 718.113(1), maintenance of the common elements is the responsibility of the association.  As such, if you sustained damage to your drywall or ceilings due to a water leak from the upstairs condominium unit above yours (or your neighbor’s, ie.,unit to unit), the association may be responsible for repairing these, minus the “wall coverings” such as paint or wall paper, which would still be the unit owner’s responsibility.

Another area the Association may bear some responsibility, is whether they inspected the wall crevices to see if any mold is growing due to the water loss.  Since the insides of the walls or ceilings would be considered common elements, if the association failed to make sure that these areas are mold free, and mold growth was exacerbated inside your unit as a result, the association may bear some responsibility.

As you can see, this simple situation can actually turn into a complex legal issue, where the unit owner above and the condominium association may disclaim any liability.   This is the reason it is so important for a South Florida condominium owner to have homeowners insurance to cover losses that may arise.  A homeowners insurance claim can always be made against your own insurance, with the assistance of a homeowners insurance property damage lawyer.

For additional analysis on condo issues and Florida condo insurance claims, see my previous post.