Order Denying Appraisal Of Hurricane Wilma Damage Reversed By Fourth District

In Florida Insurance Guaranty Association v. Castillo (4D09-103), the Fourth District reversed the trial court's order denying FIGA's motion to compel appraisal.

After the Castillo's carrier, Florida Preferred Property Insurance Company, was declared insolvent, the insured filed a new claim with FIGA.  FIGA denied the claim and the Castillo's filed suit.  After the lawsuit was filed, FIGA filed a motion to dismiss again denying the claim and also arguing the Castillo's failed to comply with its post loss obligations including participating in an appraisal.

Two months after the complaint was filed, FIGA determined that the patio damage was a covered loss and told the Castillas that it would formally withdraw its previous denial of the claim. FIGA filed an amended motion to dismiss or abate the action, referencing its withdrawal of the claim denial and rearguing that the Castillas failed to satisfy all conditions precedent, including the appraisal process. FIGA requested that the Castillas provide documentation to substantiate their claim and requested that they submit to an examination under oath. The trial court denied the motion to dismiss or abate, ordering FIGA to answer the complaint.  In its answer, FIGA raised as a n affirmative defense its right to appraisal pursuant to the terms and conditions of the insurance policy contract...FIGA then filed a motion to compel appraisal pursuant to the insurance policy. FIGA contended that its denial of the claim did not constitute a waiver of its right to appraisal.

As to the appraisal demand, the court stated:

The policy in question contained a clause requiring an appraisal of the amount of any claimed loss. FIGA asserted the right to an appraisal in its original motion to dismiss and in all subsequent pleadings and at hearings. It never waived its right to an appraisal. An appraisal clause may be invoked for the first time after litigation has commenced.

Importantly, the court noted:

Similarly, in this case FIGA has never acted inconsistently with its right to an appraisal, having raised that right at the earliest opportunity in this suit and continued to claim it through its subsequent pleadings. Asserting that the insured meet all other conditions precedent to claiming a loss is not inconsistent with demanding a n appraisal. Claiming that the loss is not covered is also not inconsistent with a demand for an appraisal. See Gonzalez. That the court compelled FIGA to answer and give discovery is not the voluntary participation in the lawsuit which would constitute a waiver of the insureds’ rights.  Because the insurance contract provided the appraisal process, which agreement is not in doubt, and FIGA did not waive its right to an appraisal by participating in the lawsuit, the trial court erred in denying FIGA’s motion to compel the appraisal.

For your convenience, the opinion is below:

4D09-103.op