Previously, Florida’s Second District Court of Appeal found that homeowners who had their sinkhole claim denied by their insurance company, but who ultimately prevailed at a jury trial could not be paid their $168,000.00 judgment until they entered a contract to repair their home.1 The court reasoned that because the policy and Florida sinkhole statutes provide for the immediate payment of Actual Cash Value (i.e., above ground repairs) but condition payment for foundation repair and ground stabilization on receiving a contract, the court must enforce that provision of the policy. The court found that since the homeowners chose to enforce the contract by suing Citizens for breach of contract, once the jury found there was coverage, the trial court was obligated to enforce the policy—even the policy’s restriction on Citizens payment to its insured, post-judgment.2

The Fifth District Court of Appeal has now addressed a similar situation in Ringelman v. Citizens Property Insurance Corporation.3 In 2011, the insured, Joseph Ringleman, noticed damage to the floors and walls of his home, and like Amat, reported a claim to Citizens. At the close of Citizens’ claim investigation, Citizens extended coverage for the insured’s sinkhole loss, offering payment of $208,322.36 for the stabilization of his home on the condition he sign a contract to complete subsurface repairs. The insured disagreed with the method and cost of repair by Citizens’ engineer, and after hiring his own engineer, made a demand for $329,110.56 for stabilization repairs.

After the parties failed to resolve their differences, the insured filed suit against Citizens for breach of contract and the matter went to trial. The jury came back with a verdict against Citizens on the insured’s breach of contract claim, finding it would actually cost $445,000.00 to repair his property.

Citizens then moved for a remittitur, or a decrease in the jury’s award, based upon the fact that the $445,000.00 jury award exceeded the policy limit. The trial court granted Citizens’ Motion for remittitur, reducing the verdict to “the insurance policy limits of $225,900.00 minus the deductible and previous payments.”

The insured then filed a “qualified acceptance of Citizens proposed remittitur,” reserving his right to challenge the requirement he enter into a contract for repairs since here, the evidence showed that the property could not be repaired within the policy limit.

The insured expressed a concern on appeal that he should not be held to the requirement of entering into a contract for repairs because such a restriction would put him in a “precarious position” of being on the hook for potentially $445,000.00 in repair costs, when he was only being awarded $225,900.00 after application of the remittitur.

While ultimately the Fifth District Court of Appeal affirmed the trial court’s finding that a repair contract would be required before payment of the judgment was due, the court addressed some of the insured’s concerns as to who would pay the potential difference between the $445,000.00 and the $225,000.00 through a series of questions at Oral Argument, where Citizens’ counsel explained that,

We have asked for a repair contract to perform the repairs that the jury found were necessary and we have asked for that contract so that we can pay which means we will exceed our policy limits. That is consistent with the statute. As soon as they bring the contract, the process begins.

The court found that,

In light of counsel’s statements, we find that Citizens has waived its option under section 3.b.5(e) of the insurance policy to tender the policy limits in lieu of paying in excess of those limits to complete the repairs. Accordingly, we affirm the final judgment but remand with instructions to enter a corrected order reflecting that, when [the insured] provides Citizens with a signed contract to complete the necessary repairs, Citizens shall pay that amount instead of tendering the policy limits.

As such, it appears that Citizens will be liable for the difference.

This is an important decision for policyholders to be aware of, as it shows a continued trend by Florida courts to condition payment for subsurface repairs on entering into a contract for such repairs, per the policy and per Florida Statute, even after a jury trial. It is also an important decision for attorneys to note: your statements at oral argument can be binding.4
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1 See Citizens Property Insurance Corp. v. Amat, 198 So.3d 730, 731 (Fla. 2d DCA 2016).
2 See Id. at 733-34; see also, Citizens Prop. Ins. Corp. v. Simoneau, 197 So.3d 70, 71 (Fla. 2d DCA 2016); Citizens Prop. Ins. Corp. v. Blaha, 194 So.3d 411, 416 (Fla. 2d DCA 2016); Citizens Prop. Ins. Corp. v. Retz, 193 So.3d 1084, 1084 (Fla. 2d DCA 2016).
3 Ringelman v. Citizens Property Ins. Corp., No. 5D16-260, 2017 WL 3795873 (Fla. 5th DCA Sept. 1, 2017).
4 The Fifth District Court of Appeals relied on three cases to support the proposition that counsel’s representations during oral argument are binding. Freeman v. BellSouth Telecomms., Inc., 954 So.2d 45, 46 (Fla. 1st DCA 2007) (“At oral argument, BellSouth stipulated that if this court were to reverse on appeal, BellSouth would abide by the original jury verdict and abandon its motion for remittitur.”); Sound Builders of St. Petersburg, Inc. v. Hanlon, 439 So.2d 276, 276 (Fla. 2d DCA 1983); Renfroe v. Renfroe, 326 So.2d 211, 211 (Fla. 4th DCA 1976).

  • shirley heflin

    Dear Ms. Dunnavant:

    Florida is not only the “Sunshine State”, but it’s also the “Insured Friendly” state. This case is just another demonstration of how insured friendly we are. It took decades of fighting and much toiling to get to this point.

    Respectfully,
    SHIRLEY HEFLIN
    Tampa, FL