Ezequiel Lugo and Sarah Lahlou-Amine expand on “Recent Waiver Decisions In Insurance Appraisal Non-Final Appeals”.
We recently wrote that Hurricane Irma will likely lead to insurance disputes that will be resolved through the “appraisal” process. We identified four common issues likely to arise in these appraisal cases. One of these issues was whether the right to an appraisal under an insurance policy had been waived. This brief overview looks at two sets of recent appellate decisions in Florida that have focused on the issue of waiver.
One set of cases addresses whether an insurer has waived its rights to appraisal by failing to comply with section 627.7015, Florida Statutes. That statute established an informal mediation program for property insurance claims. The statute requires that insurers notify policyholders of their right to participate in the mediation program when a claim is made. If the insurer does not, then the insurer waives its right to appraisal.[1] The insurer also waives appraisal when the insurer requests mediation under the statute, and the results of mediation are rejected by either party.[2] But policyholders cannot claim an insurer waived its right to appraisal based on administrative rules and regulations that go beyond the terms of the statute.[3]
The other set of cases addresses whether the party seeking appraisal has participated in litigation or otherwise taken action inconsistent with appraisal. These “litigation activity” cases usually focus on two issues. The first issue is when appraisal was first sought. Florida courts have found no waiver where the right to appraisal was asserted weeks or months after the insurer acknowledged coverage.[4] By contrast, courts are likely to find waiver if appraisal was first asserted years after the insurer acknowledged coverage.[5]
The second issue in the “litigation activity” cases is whether the party litigated the amount of the loss. Courts have found no waiver when the party seeking appraisal has not sought discovery, filed any motions, or otherwise attempted to resolve amount-of-loss issues through litigation.[6] However, appellate courts have found waiver where the party seeking appraisal sought discovery and set the case for trial on the amount-of-loss issues that would have been resolved in appraisal.[7]
As these recent appellate decisions show, the right to appraisal under an insurance policy may be waived. The party seeking appraisal must comply with any statutory pre-requisites, and must avoid engaging in litigation activity inconsistent with appraisal. Otherwise, an order compelling appraisal may be subject to reversal on appeal.
[1] State Farm Fla. Ins. Co. v. Unlimited Restoration Specialists, Inc., 84 So. 3d 390, 394 (Fla. 5th DCA 2012).
[2] Id.
[3] Id.; Subirats v. Fidelity Nat’l Prop., 106 So. 3d 997, 1000-01 (Fla. 3d DCA 2013).
[4] Fla. Ins. Guar. Ass’n v. Martucci, 152 So. 3d 759, 761-62 (Fla. 5th DCA 2014); Fla. Ins. Guar. Ass’n v. Branco, 148 So. 3d 488, 494 (Fla. 5th DCA 2014).
[5] Fla. Ins. Guar. Ass’n v. Waters, 157 So. 3d 437, 440 (Fla. 2d DCA 2015).
[6] Martucci, 152 So. 3d at 762.
[7] Waters, 157 So. 3d at 440.
