Abbey Adams Logo

Defending Liability, Workers' Compensation, Employment Claims and Appeals Since 1982

  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

  • Bloglovin
  • Facebook
  • LinkedIn
  • Phone
  • Home
  • Locations
    • Where We Practice in Florida
    • Where We Practice In Illinois
  • Practices
  • Attorneys
    • David J. Abbey
    • Jeffrey M. Adams
    • Bruce D. Burk
    • Robert P. Byelick
    • Jaime Eagan
    • Jennifer J. Kennedy
    • John D. Kiernan (1947-2016)
    • V. Joseph Mueller
    • Alexis C. Upton
  • Blog
  • Links
  • Contact Us

July 6, 2018 by Jennifer Kennedy

Insurance — Homeowners — Exclusions — Constant or repeated seepage or leakage of water over a long period of time — Jury instructions — Trial court erroneously instructed jury about the duty to adjust claim, which transformed case into a referendum on the quality of the adjuster’s performance instead of focusing the jury on the factual issue of whether the loss fell under the policy exclusion — Trial court also erred in instructing jury on how to construe insurance contract, as construction of insurance policy is question of law for court 

43 Fla. L. Weekly D1523a

Insurance — Homeowners — Exclusions — Constant or repeated seepage or leakage of water over a long period of time — Jury instructions — Trial court erroneously instructed jury about the duty to adjust claim, which transformed case into a referendum on the quality of the adjuster’s performance instead of focusing the jury on the factual issue of whether the loss fell under the policy exclusion — Trial court also erred in instructing jury on how to construe insurance contract, as construction of insurance policy is question of law for court 

CITIZENS PROPERTY INSURANCE CORPORATION, Appellant, v. RISBEL MENDOZA and VINCENTE JUBES, Appellees. 4th District. Case Nos. 4D16-1302 and 4D17-2286. July 5, 2018. Consolidated appeals from the Circuit Court for the Seventeenth Judicial Circuit, Broward County; Carlos A. Rodriguez, Judge; L.T. Case No. CACE-14-004455 (14). Counsel: Kara Berard Rockenbach and David A. Noel of Link & Rockenbach, P.A., West Palm Beach, and John H. Richards of Boyd Richards Parker & Colonnelli, P.L., Fort Lauderdale, for appellant. Andrew Barnard and Garrett William Haakon Clifford of Barnard Law Offices, L.P., Miami, for appellees.

(GROSS, J.) This is a case where an insurance company denied a homeowner’s claim for water damage resulting from a water heater leak, asserting that the damage fell under a policy exclusion. A jury returned a verdict in favor of the homeowner. We reverse the final judgment because the judge improperly instructed the jury about a duty to adjust the claim and how to construe a contract, which transformed the case into a referendum on the quality of the adjuster’s performance instead of focusing the jury on the factual issue of whether the loss fell under the policy exclusion.

The insured appellees, Risbel Mendoza and Vincente Jubes (“Insureds”), incurred water damage to their home caused by a water heater leak. The insureds filed a claim with Citizens Property Insurance Corporation, which sent an adjuster to investigate the claim.

Citizens denied the claim pursuant to the policy’s constant or repeated seepage or leakage exclusion which provided that Citizens did not insure for loss caused by

Constant or repeated seepage or leakage of water or steam, or the presence or (sic) condensation of humidity, moisture or vapor; which occurs over a period of time, whether hidden or not and results in damage such as wet or dry rot, “fungi,” deterioration, rust, decay or other corrosion.

At trial, Citizens offered testimony that the leak in this case was a continued and repeated seepage of water over a long period of time, which fell under the policy exclusion, and not a sudden and accidental discharge of water, for which there would have been coverage.

Over Citizens’ objection, the trial judge instructed the jury regarding Citizens’ “duty to adjust” the Insureds’ claim:

· You are instructed that the law in Florida provides: Every adjuster shall adjust or investigate every claim, damage, or loss made or occurring under an insurance contract in accordance with the terms and conditions of the contract and the applicable loss of the state.

· So getting to those laws of the state, the duty to adjust. Florida administrative codes 69B220.201 is the rule and law which sets forth the ethical requirements in effect during 2013 and ’14 which all adjusters are bound by.

· 626.878 rules, Code of Ethics. An adjuster shall subscribe to the code of ethics specified in the rules of the department. The rules shall implement the provisions of this part and specify the terms and conditions of the contracts, including a right to cancel, and require practices as necessary to ensure fair dealing, prohibit conflicts of interest, and ensure preservation of the rights of the claimant to participate in the adjustment of claims.

· The rule states an adjuster shall not approach investigations, adjustments, and settlements in a manner prejudicial to the insured.

· The rule states an adjuster shall make truthful and unbiased reports of the facts after making a complete investigation.

· The rule[ ] states an adjuster is permitted to interview any witnesses, or prospective witnesses, without the consent of the opposing counsel or party.

The trial court also instructed the jury regarding interpretation of the policy, over Citizens’ objection:

· Disputed terms in the contract should be given the meaning used by the people in that trade, business, or technical field unless the parties agree that the disputed term should have another meaning.

· When two exclusions could cover the same loss, the more specific exclusion takes precedence over the general exclusion.

· If relevant policy language is susceptible to more than one reasonable interpretation, one providing for coverage and the other limiting coverage, the ambiguity must be resolved in favor of coverage for the insured.

In their closing argument, the Insureds claimed that the adjuster picked the wrong exclusion to deny their claim, that he should have picked the “more specific” exclusion over the “more general” exclusion, and that he violated the “duty to adjust.” They asked the jury to construe the contract:

And the judge read you the rule. When it comes to specific versus general, you got to go with the specific. The specific controls, just like if you ordered roses for your girlfriend. And they brought back carnations and said hey, they’re flowers. No. It doesn’t work that way. You order the roses. You get the roses.

The Insureds complained about the way the adjuster denied the claim, asserting that it “was a violation of the ethical responsibilities. It is a violation of the ethical — of the adjuster’s law. It is a violation of the contract itself where it says, we will adjust all losses.”

The verdict form posed this question to the jury, “Did Citizens[ ] properly exclude the claim from coverage under the policy?” The jury answered “No” and awarded the insureds $22,000 in damages.1

The central fact issue for the jury in this case was whether the Insureds’ loss fell under the repeated seepage or leakage exclusion of the policy. If so, there was no coverage; if not, there was coverage. The main problem with the jury instructions and the Insureds’ arguments at trial is that the jury could have decided the case solely because the adjuster did not “do a good job” regardless of whether the incident fell within the policy exclusion. The instructions focused on whether the adjuster “properly investigated” or “properly adjusted” the claim and talked about a code of ethics. While such considerations may be appropriate in a bad faith case, they have no place in a simple breach of contract action. See Citizens Prop. Ins. Corp. v. Calonge, 43 Fla. L. Weekly D855b (Fla. 3d DCA Apr. 18, 2018) (Rothenberg, J., dissenting). The Insureds were free to criticize the adjuster’s conclusions without arguing that he breached a duty or obligation to them. If an adjuster makes a mockery of the code of ethics but the insurance company correctly denies a claim, there is no action for breach of contract.

A second problem with the jury instructions is that they tasked the jurors with a job reserved for the judge. The Insureds contended that a different exclusion (Exclusion 1.m.), in the policy trumped the one upon which Citizens relied; they argued that if Citizens were forced to rely exclusively on Exclusion 1.m., then there would have been coverage, because that exclusion applied only to property that had been “vacant” for more than 30 days.

The two exclusions are not in conflict. It was the trial judge’s job to so inform the jury or to sustain objections to argument to the contrary. “It is well settled that the construction of an insurance policy is a question of law for the court.” Jones v. Utica Mut. Ins. Co., 463 So. 2d 1153, 1157 (Fla. 1985). “However, it is for the jury to determine whether the facts of the case fall within the scope of coverage as defined by the court: ‘[w]hether a certain set of facts exists to bring a loss to the insured within the terms of a policy is an issue to be determined by the trier of fact.’ ” Id. (quoting State Farm Fire & Cas. Co. v. Lichtman, 227 So. 2d 309, 311 (Fla. 3d DCA 1969)).

We also note that the trial court applied the wrong standard in determining that a juror’s nondisclosure of a prior insurance lawsuit was not material to jury service in this case. As the Florida Supreme Court stated in Roberts v. Tejada, 814 So. 2d 334, 341 (Fla. 2002), a “[n]ondisclosure is considered material if it is substantial and important so that if the facts were known, the defense may have been influenced to peremptorily challenge the juror from the jury.” (quoting Garnett v. McClellan, 767 So. 2d 1229, 1230 (Fla. 5th DCA 2000)).

The declaratory judgment entered in favor of the Insureds must also be reversed. Citizens never disputed the validity of the contract, and therefore there was no “bona fide, actual, present practical need for the declaration.” Martinez v. Scanlan, 582 So. 2d 1167, 1170 (Fla. 1991) (citation omitted).

For these reasons, we reverse and remand for a new trial on the breach of contract claim. (GERBER, C.J., and CIKLIN, J., concur.)

__________________

1In their initial claim to Citizens, the Insureds said that the estimated cost to repair the damage was $58,151.19.

* * *

Filed Under: Uncategorized

Primary Sidebar

Recent Posts

  • Insurance — Commercial property — Coverage — Business losses — Business interruption — All-risk commercial policy providing coverage for “direct physical loss of or damage to” property or “direct physical loss or damage to” property does not insure against losses and expenses incurred by business as result of COVID-19 — Under Florida law there is no coverage because COVID-19 did not cause tangible alteration of the insured properties
  • Insurance — Commercial property — Coverage — Business income losses — Trial court’s finding that policy covering loss of business income due to the suspension of operations caused by “direct physical loss or damage to property” required some tangible alteration to insured property comported with common meaning of its terms and context of policy as a whole — Policy did not cover economic losses insured suffered when it suspended its operations due to COVID-19 pandemic — No error in dismissing with prejudice insured’s petition for declaratory relief and damages
  • Torts — Negligent security — Sovereign immunity — Agency — Limited immunity — Punitive damages — Amendment of complaint — Action brought against company which contracted with county to provide security services and its employee — Defendant company was entitled to limited sovereign immunity under 768.28(5) where county asserted a degree of control over defendant’s employees — Fact that defendant’s employee was working alone rather than side-by-side with county employees did not change level of control county had over defendant employee as evidenced by contract between county and defendant — Absolute immunity under section 768.28(9) applied to defendant employee, but did not apply to defendant company because it is a corporation — No abuse of discretion in denying plaintiff’s motion for leave to amend complaint to add count for punitive damages where record is devoid of evidence that defendant employee engaged in intentional misconduct or gross negligence
  • Insurance — Attorney’s fees — Assignee’s action against insurer to recover payment for construction work performed on insured property following hurricane damage — Court adopts magistrate’s report and recommendation concluding that Section 627.7152(10), Florida Statutes, which repeals assignee’s standing to recover attorney’s fees under section 627.428, does not apply in instant case where both issuance of policy and assignment agreement predated effective date of statute — Whether relevant date for purposes of applying statute is date policy was issued or date assignment agreement was entered into need not be resolved under circumstances — Motion to strike plaintiff’s claims for attorney’s fees is denied
  • Torts — Dog bite — Negligence — Sheriffs — Sovereign immunity — Action alleging deputy sheriff was negligent in handling K-9 that bit plaintiff while attending a public event — Trial court erred in dismissing complaint against sheriff on ground that action was barred by sovereign immunity — Although a plaintiff may not rely on section 767.04 when suing a state agency for a dog bite because it is a strict liability statute, a plaintiff may bring such a suit in common-law negligence — Complaint adequately stated a cause of action for negligence under common law principles — Court rejects argument that plaintiff placed himself in zone of risk by approaching area occupied by deputy and police dog, and that because deputy did not move in proximity to plaintiff there was no zone of risk created by conduct of deputy — Deputy created the zone of risk by patrolling the venue with his K-9 — Whether the deputy was walking around or standing still was irrelevant — Because plaintiff was in a public location he had the right to walk where he wanted, including right up to the deputy, and, unless warned by the deputy to move away, plaintiff had a reasonable expectation that the dog would not bite him — Lawsuit was not barred by sovereign immunity where, although the decision to patrol the public venue with K-9s may have been a discretionary function, the act of patrolling the venue with K-9s was operational

Blog Archives

Footer

The materials available at this website are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Website or any of the e-mail links contained within the site do not create an attorney-client relationship between Abbey, Adams, Byelick & Mueller, L.L.P. and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney. opens in a new windowAbbey, Adams, Byelick, & Mueller XML Sitemap Index

Copyright © 2022 · Abbey Adams Byelick & Mueller, LLP · All Rights Reserved · Defending Liability, Workers' Compensation, Employment Claims and Appeals Since 1982