Last week, the Florida Fourth District Court of Appeal issued its ruling in Citizens Property Ins. Corp. v. Michigan Condo. Ass’n, No. 4D10-1794, 2010 WL 4226281 (Fla. 4th DCA Oct. 27, 2010). Michigan Condo. involved a condominium association that suffered damage to its property from Hurricane Wilma. The association timely notified its insurance company, Citizens, which investigated and estimated the amount of hurricane damage to be below the association’s insurance deductible. The association relied upon Citizens’ estimation, but later realized that damages were, in fact, in excess of the deductible, and reopened the claim. After Citizens had spent close to a year investigating the claim with no coverage decision, the association filed a Petition to Compel Appraisal in circuit court, based on the appraisal provision in the insurance policy. Citizens, in turn, denied coverage for the claim. Because there was a dispute in the amount of damage, with Citizens estimating the damage below the deductible and the association estimating the damage above the deductible, the circuit court ordered appraisal, and Citizens appealed.
In the appeal, Citizens relied upon controlling authority in the Fourth District, Sunshine State Ins. Co. v. Corridori, 28 So. 3d 129 (Fla. 4th DCA 2010), which requires the underlying coverage dispute be resolved prior to a court order for appraisal. Michigan Condo Association distinguished its case from Corridori, in that Citizens had not denied coverage before the Petition to Compel Appraisal was filed, but rather admitted coverage below the deductible. The condo association also requested that the Fourth District allow appraisal on a “dual track” basis alongside the litigation over coverage as the Third District has done based on the recent case of Sunshine State Ins. Co. v. Rawlins, 34 So. 3d 753 (Fla. 3d DCA 2010).
The Fourth District agreed with Citizens and reversed the trial court’s order for appraisal. The court’s opinion requires the coverage dispute to be resolved before appraisal can be ordered. The court did not stop there, though, and certified its opinion to the Florida Supreme Court as in conflict with Sunshine State v. Rawlins. According to the Fourth District, Michigan Condo is in direct conflict with Rawlins in the approaches the different districts are taking in ordering appraisal. The Fourth District recognized the Rawlins rationale that a dual track approach may save judicial resources, but respectfully disagreed with that approach in Michigan Condo.
Where does the case go from here? Article 5, Section 3(b)(4), of the Florida Constitution grants discretionary jurisdiction to the Florida Supreme Court to hear cases certified to it as being in direct conflict with another district court of appeal. If the Supreme Court accepts jurisdiction to hear the case, it may set precedent statewide in how appraisals may or may not be ordered in Florida state courts. The answer to the question of whether all coverage disputes must be resolved prior to a court order for appraisal may have to wait if the Florida Supreme Court does not accept the case. We will keep our readers updated with new developments, so check back frequently.
