If you thought the notion of taking a “time-out” only applied to sports, think again. In Florida, properly invoking neutral evaluation under Florida Statute § 627.7074 is similar to requesting a time-out because it stays, or pauses, sinkhole-related proceedings. Though the nonbinding, informal procedure is intended to help parties resolve disputed sinkhole insurance claims, unless an agreement is actually reached, the neutral evaluation process will merely lead to additional delays – many times, for several months.

Earlier this year, in Citizens Property Insurance Corporation v. Trapeo,1 Florida’s Second District Court of Appeal addressed a policyholder’s objection to his insurance company’s request for neutral evaluation under Florida Statute § 627.7074. The objection was grounded, in part, on the fact that the insurance company litigated the matter for almost ten months before invoking neutral evaluation. The circuit court ruled in favor of the insured and found that "the right to neutral evaluation, like any statutory or contractual right, can be waived and that waiver did occur in the instant action."

While the appellate court recognized "that a notice of stay of litigation pending neutral evaluation could be filed on the eve of trial, thereby temporarily halting litigation at an inopportune time" the court nevertheless determined Citizens did not waive its ability to invoke neutral evaluation. The appellate court ruling was based, in part, on its finding that Florida Statute Section 627.7074 authorizes neutral evaluation as “both a potential precursor to litigation and as a parallel, contemporaneous process.”

To many, the decision reached by Florida’s Second District Court of Appeal in Trapeo is both disheartening and concerning. This strategic "time out" places everything on hold until the neutral evaluation process has concluded. Though the effect of this delay may be minimal to an insurance company, it means the world to policyholders who so desperately seek to resolve their sinkhole claim and move on with their lives.

1 Citizens Prop. Ins. Corp. v. Trapeo, 39 Fla. L. Weekly D245 (Fla. 2d DCA Jan. 31, 2014).