In a pair of sinkhole cases, different panels of Florida’s intermediate level appellate court recently compelled appraisal, and the decisions are instructive because they address both challenges to the procedure and also the question of who is qualified to serve as an appraiser. Today’s post will discuss Cincinnati Ins. Co. v. Cannon Ranch Partners, Inc., – So.3rd –, 2014 WL 5286519, 2014 Fla. App. LEXIS 17033 (Fla.Dist.Ct.App., Oct. 17, 2014) where the panel rejected arguments that the appraisal clause was unenforceable because it permitted the carrier to deny the claim even after an appraisal had taken place. Tomorrow’s post will then address who constitutes a “disinterested” appraiser.
The case involved sinkhole damage to a piece of property owned by Cannon Ranch Partners, Inc. The property was insured by Cincinnati Insurance Company, and the contract of insurance included coverage for sinkholes. The dispute involved the necessary scope of repair. Cincinnati’s two consultants determined that grouting was all that was needed to restore the structure to its pre-sinkhole state, but Cannon Ranch’s consultant opined that underpinning was also needed, and the policyholder entered into a contract to have that done. Cincinnati refused to sign off on the work, however, and it made a demand for appraisal instead.
Cannon Ranch refused to participate, and it filed a breach of contract suit. The insurer responded by moving to abate the litigation and to compel appraisal, but the district court denied the motion. On appeal, a panel of Florida’s Second District Court of Appeal reversed, and it remanded for the entry of an order compelling the appraisal proceeding. Read more ›
The case arose after the Office of Thrift Supervision closed Vantus Bank and appointed the FDIC as its receiver. The FDIC then filed suit against the bank’s former officers and directors, alleging gross negligence and breach of fiduciary duties. Progressive Casualty Insurance Company, which had issued a D&O policy to the bank, responded by filing a declaratory judgment action of its own, asserting that there was no coverage for the FDIC’s claims under its contract of insurance.
The Curries were the owners of a home in Langhorne, Pennsylvania. When Superstorm Sandy struck on October 29, 2012, the structure took a direct hit from a tree on the property. The insurer, State Farm Fire & Casualty Company, conducted an inspection and then tendered its repair estimate to the policyholders together with a check for $56,940.54 – the actual cash value of the estimate less the policy’s deductible. The Curries responded by submitting their own repair estimate in the amount of $363,804.98. State Farm then conducted a new inspection and made a supplemental payment of $9,502.09.
Effective March 16, 2010, Colony Insurance Company issued a commercial property policy providing $4.5 million in coverage for a vacant, 95,000 sq. ft. building in Montezuma, Georgia. In light of the vacancy, the insurer insisted that the policy include a protective safeguards endorsement requiring that the policyholders maintain an automatic sprinkler system, fire extinguishers, and functioning utilities and reciting that Colony would “not pay for loss or damage caused or resulting from fire if, prior to the fire, [the insureds] [f]ailed to maintain any protective safeguard . . . in complete working order.” The policyholders’ application for coverage also recited that the utilities in the building were on. When the insurer had the structure inspected in early April, however, the utilities were all found to be shut off.
The case arose after Lewayne Greene moved into a retirement community, vacating her home in Irving, Texas and placing the structure on the market. She notified her insurer of the move, but she did not purchase an endorsement offered by the carrier, Farmers Insurance Exchange, that would covered an extended vacancy. Four months later, fire from a neighboring house spread to her home and damaged it. Farmers denied the subsequent insurance claim because the structure had been vacant for over sixty days, and the policyholder brought suit. She prevailed in the trial court, but the Court of Appeals reversed and rendered judgment for Farmers. On appeal, a unanimous Texas Supreme Court affirmed.
Plaintiff Hamilton Properties acquired the Dallas Plaza Hotel in 2006 and mothballed the structure in February of 2009. The hotel was insured by American Insurance Company (AIC) from February through September of 2009. In 2012, the policyholder notified AIC that it was making claim for roof and water damage allegedly sustained during a July 8, 2009 storm that dumped ping-pong sized hailstones on the city. After investigating the loss, the insured denied liability, and Hamilton Properties brought suit.
In July of 2007, the insured, Helena Murphy, reported damage to the roof of her house and interior water damage to her homeowner’s carrier, Patriot Insurance Company. The insurer promptly had the structure inspected by a claims adjuster, and it paid $3,553.05 for the loss. The policyholder then proceeded to make a series of additional claims over the course of the next few months, and Patriot ultimately tendered over $30,000 to Ms. Murphy, including the full policy limit of $10,000 for damage from mold and rot.
The insured, Caribbean Beach Club Association, owned a time-share condominium building in Fort Myers that was heavily damaged by fire in April 2003. It had property insurance coverage with Axis Surplus Insurance Company, and it had paid an additional premium for an Ordinance or Law Coverage Endorsement that provided up to $2.5 million for any increased cost of reconstruction incurred as a result of the enforcement of local ordinances or laws. The endorsement recited that the insured could not recover, however, until after the property was actually repaired or replaced and that reconstruction had to take place within two years’ time.