Florida’s Second District Court of Appeal recently reversed final judgment against a homeowner and remanded for a retrial after a jury was instructed that the insured had to prove the damages to his home were caused by a sinkhole. The case, Mejia v. Citizens Property Insurance Corporation,1 stemmed from an insurance claim brought by a homeowner under an all-risks policy issued by Citizens for a sinkhole loss. The homeowner filed suit for breach of contract after Citizens concluded the damages to the insured’s property was not caused by sinkhole activity and denied coverage.
Before the case was presented to a jury, Citizens argued that the homeowner should bear the burden of proving that the damage to his property was caused by sinkhole activity during the policy period. The homeowner responded by noting that he was only required to show that his home was damaged during the relevant policy period, at which point the burden shifted to Citizens to prove the cause of the damages was excluded under the policy. The trial court, however, ruled in favor of Citizens on this issue.
After each party presented their arguments, the jury, following the trial court’s burden of proof instruction, found that the homeowner had not proven by the greater weight of the evidence that the physical damages to his home were caused by a sinkhole. Final judgment was then entered in favor of Citizens and the insured appealed.
The Second District Court of Appeal agreed with the homeowner that the trial court erred in allocating the burden of proof between the insured and insurer. The appellate court’s ruling was based, in large part, on the fact that the claim was made under an all-risk policy (as opposed to a named peril policy), explaining:
In litigation involving an insurance claim, the burden of proof is assigned according to the nature of the policy. Without dispute, the insurance policy at issue here is an “all risks” policy. An All-risks policy provides coverage for “all losses not resulting from misconduct or fraud unless the policy contains a specific provision expressly excluding the loss from coverage.” Hudson v. Prudential Prop. & Cas. Ins. Co., 450 So. 2d 565, 568 (Fla. 2d DCA 1984) (contracting an all-risks policy from a specific peril policy which insures only against named risks). Consistent with the jury instructions requested by Mejia in this case, an insured claiming under an all-risks policy has the burden of proving that the insured property suffered a loss while the policy was in effect. The burden then shifts to the insurer to prove that the cause of the loss was excluded from coverage under the policy’s terms.
The appellate court’s ruling is not final until the time expires for Citizens to move for a rehearing and, if one is filed, that motion is heard. Nevertheless, the decision is still an important one—not only for this homeowner, who may get a second chance to have a fair determination of the merits of his case under Florida law—but for all homeowners in this State who have (or one day may litigate) a denied sinkhole claim against their insurance carrier.