Florida’s Third District Court of Appeal Denies Prejudgment Interest on Appraisal Award where Coverage was not Denied on Underlying Claim

By Melissa M. Burghardt

In Citizens Property Insurance Corporation v. Annette Peipert, Florida’s Third District Court of Appeal held the insured was not entitled to prejudgment interest following an appraisal award where it was undisputed that the insurer did not deny coverage and timely paid the appraisal award in accordance with the policy of insurance. 2024 Fla. App. LEXIS 1095, 49 Fla. L. Weekly D358b (3d DCA 2024).

The underlying lawsuit stems from a Hurricane Irma claim for damage to a property insured by Citizens. After being notified of the loss by the insured, Annette Peipert, Citizens timely extended coverage and issued an undisputed payment. Thereafter, Peipert reported a supplemental claim with an estimate prepared by her public adjuster. Citizens then extended coverage for the supplemental claim and issued an additional undisputed payment. Peipert then filed suit against Citizens.

Appraisal was invoked and the parties proceed to appraisal. The appraisal panel ultimately entered an award in favor of Peipert, which was paid in full by Citizens two days after the award was entered. Sometime thereafter, Citizens filed a motion for final summary judgment. In response, Peipert filed a cross motion to determine her entitled to prejudgment interest. Following a hearing, the trial court awarded prejudgment interest from date of loss to Peipert and denied Citizens’ motion for final summary judgment.

On appeal, Florida’s Third District Court of Appeal found the trial court erred in awarding prejudgment interest from date of loss to Peipert following Citizens’ timely payment of the appraisal award where Citizens did not deny coverage. The Court specifically noted that “the claim arose because the parties disagreed over the scope of loss and damages, not the existence of coverage.” Id. at *3. Therefore, because Citizens had never denied coverage and timely paid the appraisal award, Peipert was not entitled to prejudgment interest.

NOTE: In a similar situation, Florida’s Third District Court of Appeal held “that an insurance policy that contains a standalone, independent obligation to pay interest can form the sole basis for a private cause of action that is not precluded by the statutory limitation on actions,” and remanded a matter for further proceedings where an insurer failed to pay interest on an appraisal award to the insured. https://www.clausen.com/florida-fifth-district-court-of-appeal-permits-lawsuit-for-breach-of-contract-due-to-insurers-failure-to-pay-interest-on-an-appraisal-award/