Deductible Applies When Insurer Elects to Repair Damage in a Partial Loss

Apr 30, 2018

Florida Insurance Defense Lawyer Amy Koltnow

April 2018
Florida Insurance Defense Lawyer Amy Koltnow
I’m pleased to bring you Florida Insurance Matters, a monthly update on Florida insurance-related legal developments.  Please contact me any time with questions or feedback. 
Amy L. Koltnow, Esq. | Shareholder, Colodny Fass | (954) 492-4010

Claim File Documents Created Before Loss is Disputed Are Protected from Disclosure 

The 3rd DCA upheld the long-standing protection from disclosure of documents in the insurer’s claim file. The case involved a covered loss and the insureds sued for breach of contract alleging the payments were inadequate. After conducting an in-camera inspection, the trial court ordered the insurer to produce documents that were generated before the date the PA contested the adequacy of the payment. The appellate court quashed the trial court’s order referencing a multitude of cases and the various courts’ rationale of work product, relevancy and confidential and proprietary trade secrets. The 3rd DCA recognized that the 4th DCA looks at the issue from a “more specific approach” based on a work-product, but declined to certify a conflict to the Florida Supreme Court in view of the facts of the case.  

Homeowners Choice Prop. and Cas. Ins. Co., v. Avila (3d DCA, April 25, 2018). 

  • The appellate court held there is no such thing as a “claims file privilege” and focused its decision on the rationale of many other cases where the determinative issue is what type of action the insured has brought (i.e., the documents are not relevant in a first party breach of contract action).  
  • The court reiterated that it was not necessary for the trial court to review certain categories of disputed documents to determine the applicability of privilege; however, a privilege log may be required in response to a specific document request for photographs within the insurer’s claim file.

Florida Supreme Court:  No “exceptional” circumstance requirement for contingency fee multiplier application

The Florida Supreme Court quashed the 5th DCA’s decision in Mone v. Sawgrass Mutual Ins. Co., which refused to apply a 1.5 multiplier to an attorney fee awarded to the insured who prevailed in a sinkhole dispute. The 5th District reversed the trial court’s application of a multiplier finding the case did not involve “rare” and “exceptional” circumstances. The Florida Supreme Court, however, reversed the 5th DCA’s decision in light of its recent holding in Joyce v. Federated Nat’l Ins. Co, when the Court made it clear there is no “rare” and “exceptional” circumstances requirement before a contingency fee multiplier can be applied.  

Mone v. Sawgrass (Fla. Sup. Court), April 20, 2018.

  • The Florida Supreme Court also reversed Rohrbacher v. Garrison Proper and Cas. Ins. Co., on the same grounds, after the 5th DCA held that the insurer’s confession of judgment and stipulation to a fee entitlement in a PIP case did not meet the “rare” and “exceptional” circumstances requirement.
  • Insurers can expect to see more fee multiplier disputes in the trial courts.


Deductible Applies When Insurer Elects to Repair Damages in a Partial Loss

The 2nd DCA upheld the trial court’s dismissal of a proposed class action finding as a matter of law that an insured has an obligation to pay the required deductible even when the insurer elects to repair damaged property.  The insured argued that once the insurer elects to repair damaged property, whether the loss is total or partial, the “Valued policy law” precluded the insurer from requiring the insured to pay the policy deductible. The court construed the VPL statute, which allows an insurer to elect to repair damaged property “without contribution of the part of the insured,” and held the statute does not apply when the insured suffers a partial loss and the insurer elects to repair.

Ganzemuller v. Omega Ins. Co. (Fla. 2d DCA, April 27, 2018).

  • Consider updating your policy language to clearly address the application of the deductible when the insurer elects to repair damaged property.
For over 45 years, Colodny Fass has represented insurers in complex and high-risk litigation including class actions, bad faith, insurance fraud, multi-jurisdictional cases, coverage matters, and fact-intensive, multi-party lawsuits. The Daily Business Review has recognized Colodny Fass as having the Insurance Litigation Department of the Year in South Florida.
About Amy L. Koltnow
Amy L. Koltnow, a Colodny Fass Shareholder, focuses her practice on insurance disputes from trial through appeals.  She has represented insurance companies in federal and state courts, as well as in mediation and administrative forums.  Ms. Koltnow oversees complex litigation matters and has successfully defended numerous class actions and insurance bad faith cases. She is a member of the Claims and Litigation Management Alliance, a national, invitation-only organization committed to furthering high standards of litigation and claims management in pursuit of client defense.
To view Ms. Koltnow’s complete professional biography, click here.