In October 2016, Guillermo Acosta and Laura Pirela (the “Insureds”) suffered a water loss at their home and filed an insurance claim.1 The insurer inspected the property and then invoked the ‘elect to repair provision’ under the policy that stated as follows:

If a peril causing a loss and related damage are covered (other than sinkhole loss) and repairs are necessary to protect covered property from further damage, [the Insureds] must notify [the Insurer] before authorizing or commencing repairs so [the Insurer], at [its] option, may select Rapid Response Team, LLC™ to make the covered Reasonable Repairs.

* * * * *

If [the Insureds] and [the Insurer] fail to agree on the amount of loss, which includes the scope of repairs, either may demand an appraisal as to the amount of loss and the scope of repairs.

* * * * *

The scope of repairs shall establish the work to be performed and completed by Rapid Response Team, LLC™. Such repair is in lieu of issuing any loss payment to [the Insureds] that otherwise would be due under the policy.

The policy also required the insureds to “execute all work authorizations to allow contractors and related parties entry to the property.”

In furtherance of this policy provision, the insurer provided a written proposal to the insureds for the scope of repairs, which the insureds’ public adjuster, after reviewing the proposal and inspecting the property, disputed in “scope, pricing and methodology.” The public adjuster also notified the insurer that (though certain issues were in dispute) the insureds lacked the financial resources to go to appraisal. Because of that, the insureds went ahead and executed a work authorization form with a few additional minor requests and sent it to the insurer so repairs could commence.

The insurer wrote back to the Insureds and their public adjuster rejecting their additional requests. Then, despite the insurer’s position that there was coverage for the loss, the insurer sent a reservation of rights letter based on the insureds’ alleged failure to provide a signed work authorization, stating there was now a question as to whether coverage even applies to the loss based on the insureds’ non-compliance with their post-loss obligations. In response, the insureds sent back a marked-up, signed version of the insurer’s form of work authorization with material changes to the form.

Shortly after, the insurer filed a three-count lawsuit for (1) temporary injunctive relief or, alternatively, specific performance of the policy terms for repair by the Insurer’s contractor, (2) declaratory relief regarding the policy terms, and (3) an action for “anticipatory breach and repudiation of the election-to-repair” terms within the policy. The insureds opposed the Request for An Injunction, and the trial court agreed, denying the injunction. The insurer then appealed the non-final order, believing they were entitled to injunctive relief.

The trial court’s denial of the motion for the mandatory temporary injunction was based on a review of the pleadings and the court’s determination that the insurer had failed to plead irreparable harm. Under Florida law, irreparable harm and the unavailability of an adequate remedy are essential elements of action for a temporary injunction; without those elements, a party cannot be awarded injunctive relief. See Genchi v. Lower Fla. Keys Hosp. Dist., 45 So.3d 915, 919 (Fla. 3d DCA 2010). It was unnecessary for the trial court to conduct an evidentiary hearing, as the pleadings sufficiently showed the existence of the Insurer’s adequate remedies at law.

Similarly, the Third District Court of Appeals affirmed the trial court’s ruling, finding that the availability of abatement, declaratory relief, and money damages after the completion of repairs (should the repairs prove insufficient or defective) served as adequate remedies at law to protect the insurer.2

I love cases like this that remind me of the things I learned back in law school. One of the key points I remember learning in Contracts class is that if you have remedies at law provided under a contract, other forms of equitable relief, specific performance and injunctive relief are typically unavailable. As an insurance policy is a form of a contract, the court simply followed basic contract law in affirming the denial of the injunction.
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1 People’s Trust Ins. Co. v. Acosta, No. 3D17-28112018 WL 4904980 (Fla. 3d DCA Oct. 10, 2018).
2 The insurer advanced the arguments that without the injunction they could not recover a form of relief that it had specifically bargained for in the policy and that irreparable harm in this situation had been established bv Hernandez v. Florida Peninsula Ins. Co., 211 So.3d 1126 (Fla. 3d DCA 2017), and Fernandez-Andrew v. Florida Peninsula Ins. Co., 208 So.3d 835 (Fla. 3d DCA 2017). However, in each of those cases—rather than the insurer seeking injunctive relief—the insureds filed lawsuits against their insurers for declaratory relief and breach of contract. The insureds’ homeowners’ policies contained election-to-repair clauses similar to those at issue here. There, as here, the insureds did not sign the work authorization forms proffered by the insurer’s designated contractor. In each case, the insurer moved to abate the lawsuit unless and until the insureds complied with the election-to-repair requirements. Although the insurers agreed that the action could proceed after the insurer’s designated contractor completed the required repairs, once orders of abatement were entered, the insureds in those cases moved for Writ of Certiorari to have the orders quashed. This court denied the petitions, concluding that the insureds had failed to show irreparable harm and the absence of an adequate remedy at law in each case. Those cases did not go so far as to approve temporary injunctions against the insureds to enforce the election-to-repair provisions. And in speaking to the insureds’ counsel, Tim Crutchfield, I also learned that although the Acosta opinion did not focus on this distinction, the insurer in Hernandez and Fernandez was not seeking to mandate an appraisal before it started repairs. The insurer was only asking that the cases be abated so that they could make the repairs. The insurer in those cases acknowledged:

[A]fter the damage is repaired, if the Petitioners believe that “the property isn’t put back to its pre-loss condition,” the Petitioners would then have a “proper cause of action” against FPIC. FPIC has therefore acknowledged that once the licensed and insured contractor has completed the repairs, the Petitioners may properly seek to lift the abatement in order to allege that the property was not returned to its pre-loss condition, which would include any dispute as to the scope of repairs.

Hernandez v. Florida Peninsula Ins. Co., 211 So. 3d 1126, 1128–29 (Fla. 3d DCA 2017). In Acosta, the insurer was seeking to require an appraisal before repairs were made, not just the right to proceed with repairs. The Acosta decision notes: “The Policy also provides that a dispute over the scope of work to be performed under the election-to-repair would be resolved by appraisal. As the enforcement of this clause was not raised below, we do not address it here.”

  • Gary Williams

    Seems like the 1943 Standard fire policy might prevent such craziness, if Florida is a state requiring policy provisions at least as favorable as the SFP.

  • shirley heflin

    Dear Ms. Dunnavant:

    Another fine example of a nominal residential claim being litigated from the pre-litigation phase, the lower court phase and finally the 3rd DCA stage for final resolution of matters that shouldn’t have been litigated! Such a waste of time and money! Even if the insurance company in this case is ordered to pay the Insured’s attorney’s fees and costs, it can’t “re-pay” them the length of time – years – it took to get their residential premises repaired.

    I despise cases like this because they showcase how the little people are stomped upon by corporate giants – insurance companies – who have the financial means to litigate and waste time (all the while taking in additional premiums for new insurance policies while denying the claim of their customer/insured herein).

    Respectfully,
    SHIRLEY HEFLIN
    Tampa, FL

  • Jim Johnson

    Gotta disagree Shirley, these people took out a policy that has a repair clause as it appears there are many with the increase in these with many of the major insurer’s pulling out or pricing their selves of Florida due to the his costs of settling these types of claims especially in the Miami Dade areas. This is along with the potential of catastrophic storm risks!
    I support the policyholder holder and needs for PA’s, but this one seems over the top in trying to pad the claim well in excess of it merits.