Florida Farm Bureau Casualty Insurance Company v. Mathis
— So.3d —-, 35 Fla. L. Weekly D868a, 2010 WL 1542631
(Fla. 1st DCA April 20, 2010)

Florida Farm Bureau Casualty Insurance Company appealed a final judgment in favor of the Mathises, awarding them their homeowners policy limits. Hurricane Ivan caused substantial wind and flood damage to the Mathises’ home. The home was insured with a flood insurance policy with policy limits of $250,000, issued pursuant to the National Flood Insurance, and with a Florida Farm homeowners policy with policy limits of $295,600, which covered windstorm damage but excluded flood.

Santa Rosa County determined that the damages to the home exceeded fifty percent of its value, so that the Mathises were required to apply for permits to repair and rebuild their home and new construction or repairs were required to be completed in accordance with current building code requirements. Because of the expense to rebuild to code and the existing structure was deemed unsafe, the Mathises were left with no choice but to demolish the home.

Mathis recovered the full $250,000, less the deductible, under their flood policy, and Florida Farm paid $102,000 for wind damages under the homeowners policy. The Mathises filed suit, arguing they were entitled to recover the full policy limits under Florida’s Valued Policy Law (VPL), section 627.702(1), Florida Statutes (2004). Florida Farm argued: the Mathis home was not a total loss; even if it was, the loss was caused by flood; and allowing the Mathises to recover the limits of the wind insurance would constitute unjust enrichment. Notably, Florida Farm did not assert set-off as a defense.

On appeal, Florida Farm argued that the Mathises were impermissibly allowed a double recovery for their loss because they had been paid policy limits under their separate flood insurance policy. In response, the Mathises argued that the jury accepted their evidence that the wind damage caused a total loss or constructive total loss of their home, so that under Florida’s VPL, they were entitled to recover their policy limits.

At trial, the court granted the Mathises’ motion in limine to prohibit Florida Farm from introducing any evidence of flood payments, though the court did allow evidence of flood damage. Mr. Mathis’ expert contractor testified that the cost to repair the wind damage above ten feet of the first floor was $325,548.10. Florida Farm argued that the house was not a total loss and that the second floor could have been repaired.

The jury returned a verdict answering “yes” to the question “[d]id the wind damages in this case amount to a constructive total loss of the property or to a total loss because the cost to repair exceeds the pre-loss market value of the building so that it is not economically feasible to repair the building.”

On appeal, Florida Farm argued that the trial court committed fundamental error in failing to set off the amount paid under the flood insurance policy against the damages awarded under the homeowners policy, because an award of damages which are not authorized by law is fundamental error. The Mathises argued set off is an affirmative defense that must be specifically pled, or it is waived.

The First District Court of Appeal rejected First Florida’s argument, noting that even if Florida Farm had properly raised the defense of set-off to the trial court below, there was no evidence in the record of an actual duplication of benefits. The Court distinguished Florida Farm Bureau Casualty Insurance Company v. Cox, 967 So. 2d 815 (Fla. 2007). Cox was limited in its holding “to only those cases in which a covered peril did not cause a total loss or constructive total loss.” Thus, Cox did not apply in this case. At trial below, the jury accepted the Mathises’ evidence that wind caused a total or a constructive total loss of their home.

The Court further explained that even if it accepted Florida Farm’s argument that Cox required apportionment of cause when there is damage caused by both wind and flood, the record was not sufficient to decide this issue. There was no evidence in the record as to the amount of flood damage and the jury was not asked to allocate what portion of the damage was caused by flood. Moreover, there was no evidence in the record that supported Florida Farm’s argument that it should be allowed to set off the full $250,000 payment made pursuant to the flood policy against payment of policy limits under the homeowners policy, as the evidence of the value of the property varied from $295,000 to $500,000.

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