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From Partial Coverage to Impartial Appraiser

Oct 8, 2019 in Case Law Updates by

In Underwriters at Lloyd’s, London, ICAT Syndicate 4242, v. John Sorgenfrei and Deana Sorgenfrei, 44 Fla. L. Weekly D2304, Case No. 5D18-3002 (Fla. 5th DCA 2019), the appellate court reversed the trial court’s nonfinal order denying Underwriters at Lloyd’s, London’s (“Underwriters”)  motion  to compel appraisal and remanded  with an  order  to compel  the appraisal.

John Sorgenfrei and Deana Sorgenfrei (“Insureds”) submitted a claim to their insurer, Underwriters, after their home sustained damage as a result of Hurricane Irma. Underwriters covered the loss, but issued no payment because the covered loss did not exceed the Insureds’ hurricane deductible. The Insureds filed suit for breach of contract and Underwriters, in its answer, admitted coverage, but asserted an affirmative defense of pre-existing damages and subsequently filed a motion to compel appraisal.

The trial court denied the motion and the appellate Court reversed and remanded because coverage for the claim was not “wholly denied.” The Court, citing Johnson v. Nationwide Mut. Ins. Co., 828 So.2d 1021 (Fla. 2002) reasoned that Underwriters admitted coverage and, as such, there was no question of coverage for the court to determine; only the amount of the loss for an appraiser to ascertain.

In Johnson, the Florida Supreme Court held “causation is a coverage question for the court when an insurer wholly denies that there is a covered loss and an amount-of-loss question for the appraisal panel when an insurer admits that there is covered loss, the amount of which is disputed.” Johnson, 828 So.2d at 1022. In so ruling, the Florida Supreme Court approved Judge Cope’s analysis in Gonzalez v. State Farm Fire & Cas. Co., 805 So.2d 814 (Fla. 3d DCA 2000) that “if the homeowner’s insurance policy provides coverage for windstorm damage to the roof, but does not provide coverage for dry rot, the appraisers are to inspect the roof and arrive at a fair value for the windstorm damage, while excluding payment for the repairs required by preexisting dry rot.” Gonzalez, 805 So.2d at 817.

Similarly, by remanding the case to the trial court and ordering Underwriters’ motion to compel appraisal be granted, the 5th DCA ruled there was no coverage question for the court to determine—even though Underwriters denied a portion of the Insureds’ claim for pre-existing damages—because coverage was not wholly denied.

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