Recently Florida’s Fifth District Court of Appeal (“5th DCA”) issued a ruling related to whether a policyholder had waived the right to participate in the appraisal process.1 The right to participate in appraisal under the policy can be waived if actions are taken that are inconsistent with that right.

The facts are fairly straightforward. In April 2010, the policyholders had a homeowner’s insurance policy with HomeWise Preferred Insurance Company. Their home sustained suspected sinkhole damage, but HomeWise denied their claim. In February 2011, they sued HomeWise for breach of contract. HomeWise answered, denying that a sinkhole loss had occurred, and denying that any covered loss had occurred. In September 2011, the case was stayed due to HomeWise’s insolvency. In June 2012, after FIGA was activated, the policyholders amended their complaint to substitute FIGA for HomeWise. The amended complaint did not mention appraisal.

In August 2012, FIGA filed its answer. FIGA admitted that it agreed to pay for their “covered claim for sinkhole loss” within certain limits. On October 11, 2012, the policyholders filed a motion to compel mediation in which they noted that “the parties originally disagreed as to whether the home has been damaged by sinkhole activity. However, FIGA has apparently conditionally accepted liability for the loss, but has put unreasonable conditions on payment of benefits.” That same day, they also moved to compel responses to previously-filed interrogatories. In January 2013, the policyholders moved for partial summary judgment as to FIGA’s liability, and a week later they noticed the case for trial. In July, FIGA again conceded that they had “a covered claim and there is no dispute over whether sinkhole activity exists at the subject property.” FIGA only contested the amount due. In September, the trial court granted the policyholders’ motion for partial summary judgment. On October 7, the policyholders demanded appraisal in a letter to FIGA. Shortly thereafter, they filed a motion to compel appraisal, which the trial court granted. FIGA appealed that order and argued that the policyholders had waived their right to appraisal.

The 5th DCA noted that FIGA acknowledged that the policyholders sustained a covered loss in August 2012. Appraisal became appropriate at that time. However, they waited a little over a year after FIGA’s admission of coverage before demanding appraisal. During that time, they moved to compel responses to discovery requests, sought and obtained a partial summary judgment, and noticed the case for trial.

The appellate court noted that “the long delay, combined with the significant litigation activities pursued by the Reynoldses after coverage was conceded, distinguishes this case from Branco. Taken together, these undisputed facts demonstrate that the Reynoldses acted inconsistently with, and waived, their rights to appraisal.”

The appellate court noted that the policyholders urged it to hold that the coverage dispute was not resolved until the trial court entered partial summary judgment in September 2013. The appellate court pointed out that the policyholders conceded below that FIGA had already accepted liability for the loss in October 2012. So the 5th DCA rejected that argument by the policyholders and concluded the trial court’s finding they did not waive their rights to appraisal was error, and reversed.

If appraisal is a remedy that a policyholder seeks to avail itself of, appropriate actions should be taken so the insurance carrier cannot argue that they waived the right to appraisal. While each set of factual circumstances is different, always consult with experienced representatives to determine if appropriate steps are being followed to ultimately get the claim to appraisal if that is the route the policyholder wishes to follow.

1 FIGA v. Reynolds, No. 5D13-4510, 2014 WL 5285001 (Fla. 5th DCA October 17, 2014).