On July 5, 2018, the Fourth District Court of Appeals, (“Fourth DCA”) reversed a jury’s verdict for Homeowner Sanjay Kuwas based on his counsel’s improper arguments and examination of his insurance company’s litigation manager during trial.1

Kuwas’ home suffered property damage due to water losses that occurred in 2011 and 2015. He was insured by Homeowners Choice Property & Casualty Insurance Company (“Homeowners Choice”) during both losses and made claims on both losses that were ultimately denied. In response, Kuwas hired attorneys who sued Homeowner’s Choice for breach of contract. Among Homeowners Choice’s affirmative defenses filed in response to the lawsuit were:

  • The loss was excluded due to sewer backups;
  • Neglect of the insured to use all reasonable means to save and preserve the property after the loss;
  • Constant or repeated seepage or leakage; and
  • Inadequate maintenance.

Prior to trial, Homeowners Choice dropped the defense of sewer backups and proceeded on the other above-listed defenses.

During trial, counsel for Kuwas argued that Homeowners Choice was “playing the odds” when it denies a claim “in the hopes that the party who is seeking to be paid under a policy will not sue them.” Apparently Kuwas’s counsel argued these points on multiple occasions: during opening statement, while examining Homeowners Choice’s litigation manager, and during closing. For example, during closing, Kuwas’s counsel argued that,

Everything that one needed to know was stuff that [Homeowners Choice] knew from day one. And what they did was, they decided to play the odds. Right? We’ll talk a little bit about that. They decided, we’re going to play the odds. And we’re just going to disregard responsibilities that they have, personal responsibility.

Homeowner’s Choice objected to these comments as improper and during the opening and examination, some objections were sustained while others were overruled. The objections made during closing were overruled by the trial court.

Throughout trial Kuwas’ counsel also emphasized Kuwas’s payment of premiums. For example, Kuwas’s counsel argued during opening, “[s]o my client paid X [amount] year, after year, after year, after year from back in the ‘90s…” and then he segued into another comment about the insurance company having “played the odds.” Kuwas’s counsel also argued that Kuwas “deserves his house back because he paid not to be in this position.”

Finally, Kuwas made comments during trial that undermined, or as the court put it “disparaged” Homeowners Choice’s affirmative defenses. Among the comments by Kuwas’s counsel objected to by Homeowners Choice were, that the parties were “fighting like the dickens over whether or not a sewer backup is excluded. And then we come to court after all this litigation, after all of this depositions and motions, and whatnot… and [Homeowners’ Choice] comes in and says, oh, by the way, we just were kidding about that one…You know the plaintiff’s right, that doesn’t apply, okay, but let’s try something else, right?”

At the close of trial, the jury found for Kuwas and against Homeowners Choice, granting Kuwas a significant award. Afterwards, Homeowners Choice filed motions for new trial and to set aside the verdict, which were both denied.

Homeowners Choice appealed the jury’s verdict, arguing that the trial court erred in several ways, only one of which was analyzed by the Fourth DCA: whether the trial court had properly denied Homeowner’s Choice motion for new trial based on the improper arguments of Kuwas’s counsel and improper questioning of Homeowners Choice’s litigation manager. The Fourth DCA reversed on that issue and remanded the case for new trial.2

In its reversal, the court analyzed the lower court’s denial of Homeowner’s Choice’s motion for new trial using an “abuse of discretion” standard, which is a difficult standard to meet on appeal because the trial court—i.e., the judge with the front row seat—is usually given broad deference. The appellate court also looked at the standard that governs preserved issues of improper argument, which is “whether the comment was highly prejudicial and inflammatory”3 in performing its analysis.

Regarding counsel’s arguments regarding “playing the odds,” in light of Homeowners Choice’s arguments that such comments implied bad faith, or implied that Homeowners Choice denied policyholder claims for any or no reason, the Fourth DCA agreed with Homeowners Choice and found those comments were grounds for reversal. With respect to plaintiff counsel’s arguments regarding the payment of premiums, the Fourth DCA did not believe that the comments rose to a level requiring reversal, at least not on their own (although the appellate court acknowledged that such comments could be grounds for reversal, as Homeowners’ Choice argued and cited case law to support.4) Finally, with Kuwas’ counsel’s argument on disparaging Homeowners Choice’s affirmative defenses, the Fourth DCA also took Homeowners Choice’s side. Homeowners Choice argued that Kuwas’s comments implied that the jury should punish Homeowners Choice for defending itself against Kuwas’s claims. They also argued that Kuwas’ counsel made these arguments to attract the jury’s attention to irrelevant pretrial conduct, implying that Homeowners Choice should be penalized for requiring Kuwas to prove his case. Although Kuwas advanced rebuttal that these arguments were actually made to point out the differences between the denial letters and the affirmative defenses, that argument did not hold water with the Fourth DCA, who ultimately agreed with Homeowners Choice finding these comments were “so highly prejudicial and inflammatory such that [Homeowners Choice] was denied its right to a fair trial.”

As an advocate for policyholders, I typically prefer writing blogs about when an insured (and not an insurance company) prevails. However, after reviewing this case, I thought it was important to point out that it appears courts are holding insureds and their counsel accountable for making sure that even issues that could be construed as implying bad faith should be reserved for after battles over coverage are decided.
1 Homeowners Choice Prop. & Cas. Ins. Co. v. Kuwas, 4D17-2383, 2018 WL 3301890, at *1 (Fla. 4th DCA July 5, 2018).
2 The other issues on appeal were either affirmed without discussion or were not addressed, as they were rendered moot by the reversal.
3 Murphy v. Int’l Robotic Sys., Inc., 766 So. 2d 1010, 1012 n.2 (Fla. 2000).
4 Government Employees Ins. Co. v. Kisha, 160 So. 3d 549, 552-53 (Fla. 5th DCA 2015)(where a discussion of the length of an insureds’ relationship with her insurer was found to be an impermissible plea for sympathy that impeded the jury’s ability to fulfill its duty of impartiality, and warranted a new trial).