Florida Supreme Court Rules That Trial Courts Have Discretion To Address Coverage Issues After Appraisal
By Thomas J. Moody
Am. Coastal Ins. Co. v. San Marco Villas Condo. Ass’n, Inc., No. SC2021-0883, 2024 Fla. LEXIS 185 (Feb. 1, 2024)
In American Coastal Insurance Company vs. San Marco Villas Condominium Association, the Florida Supreme Court considered whether a trial court must resolve coverage issues before a matter proceeds to appraisal. Noting that the insurance policy contained a unilateral appraisal provision allowing either party to make a written demand for appraisal and did not contain any provision directly governing the issue of timing for appraisal, the Court held that “trial courts have discretion in determining the order in which coverage and amount-of-loss issues are resolved.”
This matter concerned a Hurricane Irma claim. After the insurer evaluated the claim at approximately $350,000, the plaintiff condominium association submitted an estimate exceeding $8 million and demanded appraisal. The insurer rejected the appraisal demand, and the plaintiff sued. The trial court entered an order compelling appraisal, and the Second District Court of Appeal affirmed.
On review, the Florida Supreme Court relied on the terms of the insurance policy. The Court noted that the appraisal provision did not address the timing of appraisal. However, the policy did include a retained-rights provision that allowed the insurer to deny a claim following appraisal. The Court observed that the retained-rights provision, at a minimum, contemplated appraisal occurring prior to resolving coverage issues.
Based upon the policy’s terms and conditions, the Court held that trial courts have discretion to compel appraisal before all coverage issues are resolved.
Thomas J. Moody