Homeowners’ Insurance — Right to Appraisal / Waiver — Sinkhole claim — Substitution of FIGA for insolvent carrier

Insurance — Homeowners — Sinkhole claim — Appraisal — Waiver of right to
appraisal — Insureds did not waive right to appraisal by failing to demand
appraisal until five months after insurer admitted coverage where insureds did
not aggressively litigate case after insurer admitted coverage — Filing of
amended complaint to substitute Florida Insurance Guaranty Association for
insolvent insurer soon after FIGA admitted coverage did not constitute
waiver

FLORIDA INSURANCE GUARANTY ASSOCIATION, INC., Appellant, v. ARMANDO MARTUCCI
and JOYCE SOPER, Appellees. 5th District. Case No. 5D13-4513. Opinion filed
December 5, 2014. Non-Final Appeal from the Circuit Court for Hernando County,
Richard Tombrink, Jr., Judge. Counsel: Hinda Klein, of Conroy, Simberg, Ganon,
Krevans, Abel, Lurvey, Morrow & Schefer, P.A., Hollywood, for Appellant.
Robert E. Biasotti and Annette Marie Lang, of Biasotti and Associates, St.
Petersburg, for Appellees.

(COHEN, J.) The Florida Insurance Guaranty Association (“FIGA”) appeals a
non-final order compelling it to participate in an appraisal of a homeowner’s
insurance claim.1 FIGA argues that Armando
Martucci and Joyce Soper (collectively, “the Insureds”) waived their right to
appraisal.2 We disagree and affirm.

In September 2010, the Insureds filed suit against their homeowner’s
insurance provider, Homewise Preferred Insurance Company (“Homewise”), claiming
that a sinkhole had caused property damage to their home. After Homewise denied
coverage of the claim, the parties engaged in extensive discovery.

Then, in December 2012, FIGA notified the Insureds that it was assuming the
handling of their claim due to Homewise’s insolvency.3 On July 19, 2012, FIGA admitted — for the first
time — that the Insureds’ claim was covered under the Homewise insurance
policy. Shortly thereafter, the Insureds amended their complaint to substitute
FIGA for Homewise. Less than a month after FIGA filed its answer, the Insureds
demanded appraisal, and eventually filed a motion to compel appraisal.4

FIGA claimed that appraisal was inappropriate because: (1) the Insureds
waived their right to appraisal by not filing their motion to compel appraisal
until two years after filing suit against Homewise; (2) the dispute centered on
the method of repair rather than the amount of loss; and (3) FIGA was submitting
the claim to neutral evaluation. After the parties participated in neutral
evaluation, the trial court granted the Insureds’ motion to compel appraisal and
stayed the proceedings. This appeal followed.

The central issue on appeal is whether the Insureds waived their right to
appraisal by filing an amended complaint against FIGA and failing to demand
appraisal until December 20, 2012. When the underlying facts are undisputed, as
they are here, we review the issue of waiver de novo. See Fla. Ins.
Guar. Ass’n v. Branco, 39 Fla. L. Weekly D2020, D2020-21 (Fla. 5th DCA Sept.
19, 2014).

Waiver of the right to appraisal occurs when a party “actively participates
in a lawsuit or engages in conduct inconsistent with the right to appraisal.”
Fla. Ins. Guar. Ass’n v. Maroulis, 39 Fla. L. Weekly D2198, D2199 (Fla.
5th DCA Oct. 17, 2014) (citing Branco, 39 Fla. L. Weekly at D2021).
Because appraisal exists only to determine the amount of loss, and not whether
coverage exists, a party cannot seek appraisal until the insurer admits coverage
(or until coverage is determined by the court). Id. Consequently, a party
cannot act inconsistently with the right to seek appraisal until that time.
Id.

Here, appraisal was not warranted until July 19, 2012 — when FIGA first
admitted coverage. See id. Thus, despite FIGA’s argument to the
contrary, it is irrelevant that the Insureds engaged in extensive discovery with
Homewise and failed to request appraisal until two years after filing the
original complaint. Instead, the relevant time period began in July 2012, and
after that time, the Insureds’ only action that was arguably “inconsistent with
the right to appraisal” was amending the complaint to substitute FIGA for
Homewise. They amended the complaint only a few weeks after FIGA admitted
coverage, and then demanded appraisal five months later.

We recognize that the Insureds’ five-month delay makes this case fall
somewhere between the cases where courts have found waiver and those where they
have not. Compare Branco, 39 Fla. L. Weekly at D2020-21 (finding
no waiver where insured demanded appraisal three weeks after FIGA admitted
coverage), and Fla. Ins. Guar. Ass’n v. Santos, 39 Fla. L. Weekly
D2196 (Fla. 5th DCA Oct. 17, 2014) (finding no waiver where insured demanded
appraisal three months after FIGA admitted coverage), with
Maroulis, 39 Fla. L. Weekly at D2199 (finding waiver where insured
demanded appraisal nearly a year after FIGA admitted coverage), and
Fla. Ins. Guar. v. Rodriguez, 39 Fla. L. Weekly D2196, D2197 (Fla. 5th
DCA Oct. 17, 2014) (finding waiver where insured demanded appraisal three years
after FIGA admitted coverage), and Gray Mart, Inc. v. Fireman’s Fund
Ins. Co., 703 So. 2d 1170, 1171 (Fla. 3d DCA 1997) (finding waiver where
insured litigated case for fourteen months and filed a motion for summary
judgment). But the waiver analysis does not turn entirely on the amount of time
the case was pending; it focuses on whether the Insureds acted inconsistently
with their appraisal rights. See Branco, 39 Fla. L. Weekly at
D2021.

Certainly, the Insureds in this case could, and should, have demanded
appraisal sooner. Nonetheless, we cannot say that they “aggressively litigated”
the case after FIGA admitted coverage. Cf. ARI Mut. Ins. Co. v.
Hogen, 734 So. 2d 574, 576 (Fla. 3d DCA 1999) (finding waiver where party
“aggressively litigated” for nine months). The Insureds did not request any
discovery, file any motions, or otherwise indicate that they wanted to resolve
the amount-of-loss issue by way of litigation rather than appraisal. Cf.
Rodriguez, 39 Fla. L. Weekly at D2196-97 (finding waiver where insureds
filed several discovery requests and pursued other litigation activities). Nor
can we say that filing an amended complaint to substitute FIGA soon after FIGA
admitted coverage was, alone, sufficient to constitute waiver. Cf.
Maroulis, 39 Fla. L. Weekly at D2199 (finding waiver where insureds
pursued “significant litigation activities,” including amending their complaint,
requesting further admissions, and attending mediation); Santos, 39 Fla.
L. Weekly at D2196 (finding no waiver even though insured filed a discovery
request because the single discovery request did not go to the “amount of loss”
or “method of repair” issue).

In sum, under the facts of this case, we believe that the Insureds did not
act inconsistently with, or waive, their right to demand appraisal. Accordingly,
we affirm.

AFFIRMED. (TORPY, C.J., and SAWAYA, J., concur.)

__________________

1We have jurisdiction under Florida Rule of
Appellate Procedure 9.130(3)(C)(iv).

2FIGA’s other arguments do not warrant
discussion, as they have been thoroughly discussed and rejected in several of
this Court’s recent opinions. See Fla. Ins. Guar. Ass’n v. Branco,
39 Fla. L. Weekly D2020 (Fla. 5th DCA Sept. 19, 2014) (holding that “method of
repair” is an issue that falls within the scope of “amount of loss,” and that
FIGA’s concerns about having to pay more than the “covered losses” and having to
pay the insureds directly were not within the scope of review); see also
Fla. Ins. Guar. Ass’n v. Santos, 39 Fla. L. Weekly D2196 (Fla. 5th DCA
Oct. 17, 2014) (affirming the holding in Branco); Fla. Ins. Guar.
Ass’n v. Sill, 39 Fla. L. Weekly D2197 (Fla. 5th DCA Oct. 17, 2014) (same).
Although FIGA has framed the issue slightly differently in this case, we remain
unpersuaded.

3FIGA is a “public, nonprofit corporation
created by statute to provide a mechanism for payment of covered claims under
certain classes of insurance policies issued by insurers [that] have become
insolvent.” Branco, 39 Fla. L. Weekly at D2020 n.1 (quoting Fla. Ins.
Guar. Ass’n v. Devon Neighborhood Ass’n, 67 So. 3d 187, 189 (Fla. 2011));
see also §§ 631.51-.55, Fla. Stat. (2011).

4The Homewise policy contained a provision
that allowed for appraisal when the parties disputed the amount of loss.