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Insureds waive their rights to appraisal if their request is delayed and significant litigation activities are pursued after insurers admit a loss is covered.

Frank and Tracey Reynolds (the Reynolds) owned a home in Florida and had a homeowner's insurance policy with HomeWise Preferred Insurance Company. In April 2010, the Reynolds' home sustained damage. The suspected cause was a sinkhole, but when the Reynolds filed a claim with their insurer, it was denied. In response, the Reynolds filed suit for breach of contract in February 2011. In its answer, HomeWise denied that a sinkhole loss--or any other covered loss--had occurred. The Florida Insurance Guaranty Association (FIGA) was activated, due to HomeWise's insolvency, and in June 2012, the Reynolds substituted FIGA for Home-Wise.

In August 2012, FIGA filed its answer to the suit and agreed to pay the claim for sinkhole loss, within certain limits, as it was a covered loss. In October 2012, the Reynolds, believing that FIGA's conditions on the payment of benefits were unreasonable, filed a motion to compel mediation and moved to compel responses to previously filed interrogatories. In January 2013, the Reynolds moved for partial summary judgment, and shortly thereafter noticed the case for trial. In July 2013, FIGA again conceded that the Reynolds had a covered claim but contested the amount due. The trial court granted the Reynolds' motion for partial summary judgment in September 2013. In October 2013 the Reynolds demanded an appraisal and then filed a motion to compel appraisal. The trial court granted the motion, and FIGA appealed.

On appeal, FIGA argued that the Reynolds waived their right to seek an appraisal. The appellate court examined whether the Reynolds acted inconsistently with their right to appraisal after FIGA conceded coverage of the loss, noting that appraisal became appropriate at that time. It was more than a year after FIGA's admission of coverage before the Reynolds demanded an appraisal, and in that time, they pursued a number of different litigation activities. The court found that the long delay, combined with the significant litigation activities pursued, demonstrated that the Reynolds acted inconsistently with, and thus waived, their right to appraisal.

Florida Insurance Guaranty v. Reynolds

District Court of Appeal of Florida

October 17, 2014

148 So. 3d 840

by Alan M. Weinberger, JD, and Megan Murphy, JD

Alan M. Weinberger, JD, has been a professor at Saint Louis University School of Law since 1987. Previously, he practiced for twelve years with law firms in Detroit and Washington, DC, where he specialized in real estate transfer, finance, and development. Weinberger graduated magna cum laude from the University of Michigan Law School. He has published articles and chapters in the fields of real estate finance, partnership, and property law. He Is coauthor of Property Law Cases, Materials and Problems, 3rd ed., published by West Group. His most recent article, "Tools of Ignorance: An Appraisal of Deficiency Judgments," was published in the Spring 2015 issue of the Washington and Lee Law Review. Contact:

Megan Murphy, JD, is an attorney in the Denver law firm of Hackstaff & Snow, LLC. She graduated magna cum laude from Saint Louis University School of Law where she was the Mel Friedman Fellow in Real Estate Law.

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Title Annotation:Recent Court Decisions
Publication:Appraisal Journal
Geographic Code:1U5FL
Date:Mar 22, 2015
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