Case: Citizens Prop. Ins.
Corp. v. Amat
Court of Appeal of
Florida, Second District
41 Fla. L. Weekly
448 (Dist. Ct. App. 2016)
Plaintiffs reported damage to their home resulting from suspected sinkhole activity in June 2011 to their homeowners insurer, Citizens Property Insurance Corporation ("Citizens"). Citizens hired Madrid Engineering Group, Inc. ("MEG"), to investigate. In January 2012, based upon MEG's finding that "the conditions and minor cracking" in the home were the result of multiple causes other than sinkhole activity, Citizens denied the claim. Plaintiffs sought a second opinion from Florida Testing and Environmental, Inc. ("FTE"), and based on FTE's conclusion that the damage to Plaintiffs' residence was caused by sinkhole activity, the Homeowners filed suit.
The case proceeded to a jury trial, with the jury ultimately finding Citizens had failed to prove that the damage was caused "solely by excluded perils" and "not in combination with sinkhole activity." The jury then awarded damages of $169,665.77, comprised of the following: $72,952 for grouting, $52,500 for underpinning, and $44,213.77 for "cosmetic" or above ground repairs. The trial court applied the $2500 policy deductible and entered final judgment against Citizens in the amount of $167,165.77 and prejudgment interest of $25,041.43 for a total of $192,207.20.
On appeal, one of the issues raised by Citizens was that the trial court erred in entering a money judgment requiring it to pay for the cost of the subsurface repairs without requiring Plaintiffs to enter into a contract for those repairs. In considering this issue, the Court first noted the sinkhole endorsement on the policy at issue contained a loss settlement provision requiring the Plaintiffs to enter into a contract for the performance of building stabilization or foundation repairs before Citizens would be obligated to pay for those repairs. The Court recognized this language was consistent with section 627.707(5)(b), Florida Statutes (2010).
Plaintiffs argued that because Citizens breached the insurance contract, it waived the right to insist on their compliance with the endorsement, and that this breach "was sufficient to authorize the Homeowners to treat the contract as put to an end." The Court, in rejecting Plaintiffs' position, reasoned the case did not involve nonperformance of an entire contract. Further, Citizens was not attempting to utilize the payment provision to avoid liability. It merely sought to enforce the provisions of the policy that controlled how and when payment for subsurface stabilization would be made. The Court found Citizens' determination that the Plaintiffs' claim for damages was not a covered loss under the policy did not change the scope of coverage that it had contracted to provide any more than it eliminated the policy deductible or the policy limits. The Court relied on prior case law establishing, "A claim denial can excuse an insured's obligation to perform an act required by the policy, but it does not expand the scope of coverage." Thus, the Court held, based on the jury's finding of coverage, the trial court was obligated to enforce the contract, including the policy's restrictions on Citizens' obligations to pay for the cost of the repair for subsurface damages before the Homeowners entered into a contract for those repairs.
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