Florida’s Third District Court of Appeal Continues to Misapply Proper Construction Techniques to Insurance Claims
Should you decide what you will do before you start a construction project or after? Of course the answer is before, but Florida’s Third District Court of Appeal continues to get it backwards in property insurance disputes. Case in point: the February 22, 2017, opinion in the Miami-Dade County property insurance case, Hernandez v. Florida Peninsula Insurance Co.
The Background of Case
After water seriously damaged their home, Felipe and Ana Hernandez filed a claim with their insurance company, Florida Peninsula. Florida Peninsula determined that the damage was covered under the policy, but exercised the insurance policy’s option to repair the damage instead of pay monetary benefits to Mr. and Mrs. Hernandez. The Hernandez’s were not satisfied with this decision, having doubts about the insurance company’s ability and intention to complete the repairs to their satisfaction. As a result, the homeowners declined to sign the work authorization to let the insurance company begin repairs, and filed suit disputing, among other things, the scope of repair proposed by Florida Peninsula. Florida Peninsula moved to abate the action in favor of it completing the repairs that it first proposed, arguing that the homeowners could then sue it if it did the repairs wrong. The trial court agreed with Florida Peninsula and ordered it to complete the repairs. The homeowners appealed.
Why the Appeals Court Ruled Against the Homeowners
Just one month earlier, the Third District ruled against another Miami homeowner in the similar case of Fernandez-Andrew vs. Florida Peninsula, 3D16-331, 2017 WL 363135 (Fla. 3d DCA Jan. 25, 2017). Just as in that case, the insurance company argued that the insured could sue the insurance company after it completed repairs if it did them wrong. While this may in fact be true, that lawsuit would be over improper repairs, not about deciding what repairs should be done before work starts. In making this argument, the insurance company hopes to inoculate itself against all lawsuits once it opts to repair, even if the repairs proposed are inadequate, improper, or just plain unwanted. The law in Florida is well established that even if an insured refuses to allow an insurance company to repair its property, they are still entitled to a monetary judgment at least in the amount the insurance company would pay its own contractor. Robinson v. Florida Peninsula Ins. Co., 178 So. 3d 947, 948 (Fla. 4th DCA 2015) (citing Arch Roberts & Co. v. Auto–Owners Ins. Co., 305 So. 2d 882, 882–84 (Fla. 1st DCA 1974) (affirming summary judgment and finding insurer liable for payment to the insured in the amount of the appraisal for repair where insured prevented insurer from completing repairs)). The insured is also entitled to contest the scope of repairs that the insurer neglected, and entitled to dispute the amount of the estimate. Id. at 948-949 (citing Fla. Ins. Guar. Ass’n v. Branco, 148 So.3d 488, 491–92 (Fla. 5th DCA 2014) (finding that a dispute over the method of a proposed repair to a home is an “amount of loss” issue rather than a coverage issue)).
Where the Third District missed the boat is in confusing the two separate lawsuits: the first over what repairs should be done, and the second if the repairs are done incorrectly. The second suit is premature until repairs have been done, but the first is ripe as soon as there is a dispute over what should be done. Does your insurance policy allow the insurer to make repairs on its own instead of sending a payment? What options do you have if your insurance company elects to repair and you disagree with the repairs the insurance company intends to do? Should the dispute over repairs be resolved before or after the work is done?
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At Geyer Fuxa Tyler, our property insurance attorneys always stay up to date on the latest development in Florida insurance law. To find out more about how we can help you and your family, please contact our team today at (954) 990-5251. From our Sunrise, Florida office, we serve property owners throughout Broward County.