A recent Florida appellate opinion addresses common issues regarding the death blow or failure to comply with policy conditions. It should be well-known that a material breach of a policy condition may be fatal to a claim and grounds for voiding the policy.

Many insurers seek to avoid paying a legitimate claim by invoking breach of policy conditions—usually, the failure to provide prompt notice, failure to submit to an examination under oath, and failure to submit a timely, sworn proof of loss. In Himmel v. Avatar Property & Casualty Insurance Company,1 the appellate court reversed two consolidated summary judgment motions in favor of Avatar issued by the trial court for breach of those policy conditions. The lower court found “that the undisputed evidence demonstrated that Appellant failed to submit for an EUO; failed to submit a sworn proof of loss; and failed to provide Avatar with prompt notice of the loss.” However, the appellate court found “that the lower court did not make a determination as to whether Avatar could reasonably require Appellant to submit to an EUO at a date and time that was not mutually convenient.” And further, that whether the proof of loss timely submitted by the insured’s public adjuster on a different form than provided by the insurer actually constitutes a material breach of the policy condition is a fact question for the jury, not the court. Below, is the appellate court’s well-reasoned analysis for each alleged fatal breach:

Analysis

1) EUO

We begin our analysis by addressing the trial court’s finding that Appellant breached the policy by failing to submit to an EUO. “An insured’s refusal to comply with a demand for an [EUO] is a willful and material breach of an insurance contract which precludes the insured from recovery under the policy.” Goldman v. State Farm Fire Gen. Ins. Co., 660 So. 2d 300, 303 (Fla. 4th DCA 1995). “If, however, the insured cooperates to some degree or provides an explanation for its noncompliance, a fact question is presented for resolution by a jury.” Haiman v. Fed. Ins. Co., 798 So. 2d 811, 812 (Fla. 4th DCA 2001) (quoting Diamonds & Denims, Inc. v. First of Ga. Ins. Co., 417 S.E.2d 440, 442 (Ga. Ct. App. 1992)).

Here, although it is undisputed that Appellant failed to appear for the scheduled EUO, the record evidence reflects that Appellant’s counsel repeatedly requested to reschedule the EUO to a mutually convenient date and time due to unavailability. Appellant attached to his response in opposition to Avatar’s motions for summary judgment evidence showing the efforts made to reschedule the EUO. Accordingly, Appellant presented evidence showing that he cooperated to some degree and/or provided an explanation for his noncompliance which in turn created a question of fact as to whether there was a willful and material breach of the EUO provision, thus precluding entry of summary judgment. See Lewis v. Liberty Mut. Ins. Co., 121 So. 3d 1136, 1136–37 (Fla. 4th DCA 2013) (whether insured’s refusal to attend EUO unless it was via telephone or at her attorney’s office constituted a willful and material breach was a fact issue precluding summary judgment based on insured’s failure to cooperate); Haiman, 798 So. 2d at 812.

2) Prompt Notice

We next address the trial court’s finding that Appellant breached the policy by failing to provide Avatar with prompt notice. “Notice is necessary when there has been an occurrence that should lead a reasonable and prudent [person] to believe that a claim for damages would arise.” Ideal Mut. Ins. Co. v. Waldrep, 400 So. 2d 782, 785 (Fla. 3d DCA 1981). Notice is said to be prompt when it is provided “with reasonable dispatch and within a reasonable time in view of all of the facts and circumstances of the particular case.” Laquer v. Citizens Prop. Ins. Corp., 167 So. 3d 470, 474 (Fla. 3d DCA 2015) (quoting Yacht Club on the Intracoastal Condo. Ass’n v. Lexington Ins. Co., 599 Fed. Appx. 875, 879 (11th Cir. 2015)).

Accordingly, “the issue of whether an insured provided ‘prompt’ notice generally presents an issue of fact.” Id.; see also Gonzalez v. U.S. Fid. & Guar. Co., 441 So. 2d 681, 681 (Fla. 3d DCA 1983) (“What constitutes a reasonable time within which to give notice of an accident under the terms of a policy of insurance is ordinarily an issue of fact.”). But see Kroener v. Fla. Ins. Guar. Ass’n, 63 So. 3d 914, 916 (Fla. 4th DCA 2011) (notice of loss provided over two years after the date of loss did not constitute “prompt” notice as a matter of law).

In the present case, the policy requires Appellant to provide “prompt notice” of the loss. Accordingly, Appellant was required to provide notice within a reasonable time given all of the facts and circumstances surrounding the loss. Laquer, 167 So. 3d at 474. To that end, the summary judgment evidence reflects that Appellant provided Avatar with notice of the claim two days after the leak was first discovered and one day after the actual damage was discovered. The evidence also reflects that during those two days, Appellant was actively attempting to mitigate the damage by fixing the leak and removing the impacted flooring. Whether waiting two days before providing Avatar with notice was untimely in view of all of the facts and circumstances surrounding the loss was an issue of fact for the jury to determine.

3) Sworn Proof of Loss

Lastly, we address the trial court’s finding that Appellant breached the policy by failing to submit a sworn proof of loss. It is well established that an insured’s failure to submit a sworn proof of loss before filing suit is usually fatal to the insured’s claim. Kramer v. State Farm Fla. Ins. Co., 95 So. 3d 303, 306 (Fla. 4th DCA 2012). When an insured does submit a sworn proof of loss, however, the issue of whether the submitted document “substantially complie[s] with policy obligations is a question of fact” which precludes the entry of summary judgment. State Farm Fla. Ins. Co. v. Figueroa, 218 So. 3d 886, 888 (Fla. 4th DCA 2017); see also Schnagel v. State Farm Mut. Auto. Ins. Co., 843 So. 2d 1037, 1038 (Fla. 4th DCA 2003).

Here, it is undisputed that Appellant submitted a timely sworn proof of loss via his public adjuster. Although on a different form, the submitted sworn proof of loss contained substantially the same information as requested in the form provided by Avatar with the exception of any claimed personal property loss. Nonetheless, whether Appellant’s failure to include information about his personal property loss in the sworn proof of loss constituted a material breach of the policy was an issue of fact for the jury, not the trial court, to determine. See Schnagel, 843 So. 2d at 1038 (holding that where the insured provided some, but not all, of the insurer requested documents pursuant to the policy’s cooperation clause, the issue of whether the insured materially breached the policy was one for the jury to resolve).

As we see from the appellate court’s analysis, the evidence shows the insurer failed to provide the insured with support for declaring non-compliance and attempting to avoid properly paying the claim. The appellate court found that though the insured may not have adhered to the unsubstantiated and vague demands of the insurer, whether or not those arbitrary demands were reasonable or the insured’s failure to comply with those arbitrary demands were in fact a “willful and material” breach or a “material” breach of policy conditions are issues of fact for the jury to determine, not the court.

In this case, the appellate court held off the coroner and called for the defibrillator. Compliance with policy conditions is a serious matter. It is always a good idea to consult counsel and prevent fatal arguments. There is great guidance in this opinion to keep your claims healthy!
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1 Himmel v. Avatar Property & Casualty Ins. Co., Nos. 4D17-2724 and 4D18-0004 (Fla. 4th DCA October 17, 2018).

  • Gary Rowland

    Very good read. Thank you for providing this synopsis on this claim. I would like to read the district court version. Can you post or email that as that is the beginning of the story and would be interested in the original complaint.
    Thanks. Gary Rowland

    • Deborah

      Thank you, Gary. We will see what we can do about getting copies to you. Happy Thanksgiving!

      • Gary Rowland

        Happy Thanksgiving.