AMERICAN COASTAL INSURANCE COMPANY v. HANSON'S LANDING ASSOCIATION, INC.

Citation: Not availableDocket: 21-1221

Court: District Court of Appeal of Florida; November 30, 2021; Florida; State Appellate Court

Original Court Document: View Document

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American Coastal Insurance Company appeals a trial court's order granting appraisal in a case concerning a real property casualty insurance claim made by Hanson’s Landing Association, Inc. The court addressed two primary issues: whether the appraisal was prematurely granted and whether the Association waived its right to appraisal by engaging in litigation inconsistent with its request. The court affirmed the trial court's ruling on the waiver issue without further discussion, emphasizing that appraisal is intended solely to assess the amount of loss, not coverage, and cannot proceed until coverage is admitted or determined by the court. Ultimately, the court found that the appraisal was indeed prematurely granted and reversed the trial court's order, remanding for further proceedings.

The background involves a hailstorm in April 2015, after which the Association claimed damages in August 2017, citing delayed awareness of the loss. American Coastal issued a reservation of rights due to late notice and outlined policy obligations, requesting various documentation to support the claim. An engineer's inspection indicated some hail damage and suggested repairs for some structures while recommending replacements for others. In contrast, the Association provided a significantly larger repair estimate of $6,852,120, later revised to $18,278,455.08, without substantial supporting documentation.

American Coastal denied the insurance claim from the Association, asserting that the Association failed to meet post-loss obligations, including timely notice of the loss, a prompt description of the damaged property, and the provision of all requested documents. Additionally, American Coastal claimed that the Association violated the policy's provision against concealment, misrepresentation, or fraud, arguing that the revised claim was significantly inflated and indicated intentional concealment. In response to the denial, the Association filed a lawsuit against American Coastal for breach of contract and sought declaratory relief to enforce appraisal. American Coastal raised defenses, including the Association's material breach and violations of the concealment provision. The Association moved to compel appraisal, arguing that the only issue was the amount of loss, as the property damage was confirmed despite the denial based on late notice and alleged misrepresentation. American Coastal countered that an appraisal is not applicable when coverage is completely denied and pointed out the significant delay in reporting the 2015 loss and the $18 million loss estimate provided in 2019. The trial court held a hearing on the motion to compel appraisal, which did not include evidence, and later granted the motion without detailing its rationale. American Coastal appealed, and the appellate review of such orders is de novo. Citing precedent, the appellate court emphasized that coverage disputes must be resolved before ordering an appraisal, as liability must be established prior to determining damages.

American Coastal contends that the trial court mistakenly granted appraisal after denying liability under the policy, citing two main reasons: (1) the Association did not fulfill post-loss obligations and conditions precedent for coverage, and (2) American Coastal asserted the policy was void due to the Association’s alleged violations of provisions regarding concealment, misrepresentation, or fraud. The Association counters that the trial court correctly mandated appraisal because the hail damage claim falls under the all-risk policy, appraisal is a mandatory right, the Association substantially complied with post-loss duties, and American Coastal was not prejudiced by any delays in notice of damage. Furthermore, the Association argues that American Coastal's defense concerning concealment or misrepresentation pertains to a condition subsequent, essentially disputing merely the amount of loss.

The court finds that appraisal was granted prematurely, drawing parallels to the case of Corridori, where a claim was denied due to late submission of a sworn proof of loss. In Corridori, the insurer's denial was based on non-compliance with policy requirements, and the court reversed the trial court's grant of appraisal due to the lack of factual determination regarding compliance. Similarly, in this case, there is a factual dispute over policy coverage due to untimely notice and failure to provide requested information. Additionally, the presence of a more pronounced factual dispute regarding potential policy voidance due to alleged fraudulent conduct distinguishes this case from Corridori. Consequently, since American Coastal has denied coverage, the trial court must first address the coverage extent before ordering appraisal. The decision is affirmed in part, reversed in part, and remanded for further proceedings.