Florida Insurance Matters (August 2018)

Aug 7, 2018

August 2018

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 


Appraisal panel to determine both causation and loss amount when covered loss not “wholly denied”

Insureds who sustained damage to their roof and to the interior of their home filed a claim with their homeowner’s insurer for all the damage caused by wind from a tornado. The insurer afforded coverage for the loss “as a whole” but did not include the roof within its “scope” of repairs after determining that the roof leaked from age-related wear and tear and was not covered under the policy. 
The insureds disagreed and submitted a proof of loss which included damage to the roof. The insurer then demanded appraisal to determine the cause of the roof leak. The insureds filed suit and the insurer moved to compel an appraisal. 
The trial court declined to order an appraisal and held that since the insurer determined the roof was not covered, the issue of coverage could not be submitted to appraisal.  The appellate court reversed and held that both causation and the amount of loss are issues to be determined by an appraisal where the insurer has not “wholly denied” there is a covered loss.

  • The court held that causation is a coverage question for the court only when an insurer “wholly denies” that there is a covered loss; and an amount of loss question for the appraisal panel when an insurer admits there is a covered loss, but the amount of the loss is disputed.
  • This case may be interesting to watch since it appears to conflict with the 3d DCA, which permits cases to proceed on a “dual track” basis where the appraisal panel determines the amount of the loss, but all coverage defenses are preserved for judicial determination. 
  • This case also seems to extend the Florida Supreme Court case of Johnson v. Nationwide beyond what may have been intended. (Johnson did not expressly hold that the appraisal panel determines coverage with finality, but held the appraisers are to exclude payment for damage by non-covered perils.)

Adjuster’s ethics have no place in simple breach of contract action

The 4th DCA reversed a jury verdict in favor of insureds in a dispute over whether the loss was excluded under the policy as damage caused by constant or repeated seepage or leakage of water. The appellate court held that the trial court improperly instructed the jury on issues regarding the insurer’s “duty to adjust” a loss and the adjuster’s “ethical obligations.” This improperly injected issues on the quality of the adjuster’s performance instead of focusing on whether the loss was excluded under the policy. 
The appellate court held that while these facts may be relevant in a bad faith action, they have no place in a simple breach of contract action. Moreover, the jury was improperly instructed on contract interpretation, which is solely for the court to determine.  

Citizens Prop. Ins. Corp. v. Mendoza (4th DCA July 5, 2018).

  • Some plaintiff attorneys try to inject adjusting allegations into the complaint, and pursue adjusting issues at depositions. This case should be kept handy to strike such allegations and to keep the case focused solely on the application of the policy to the facts


Insurance companies cannot be disparaged for asserting coverage in first-party suit

The 4th DCA also reversed a jury verdict in favor of the insured based on the insured’s counsel’s improper arguments and questioning of the insurance company’s litigation manager which implied bad faith actions on the part of the insurance company, improperly emphasized the insured’s payment of premiums, and disparaged the company’s defense of the claims. 

The insured’s theory of the case was that the insurance company was “playing the odds” when it decided to deny the claims and disregarded its “personal responsibility”. The insured’s attorney also argued that the plaintiff paid his premiums “year after year” to obtain coverage. The insured’s attorney further denigrated the insurance company for asserting defenses to the claim, suggesting that the insurer should be punished for exercising its right to defend the case. The appellate court found the comments highly inflammatory and prejudicial to the insurance company and ordered a new trial.  

Homeowners Choice Prop. and Cas. Ins. Co. v. Kuwas (4th DCA, July 5, 2018)

  • Insurance companies enter the courtroom already behind the eight ball. These recent 4th DCA cases will hopefully curtail future attempts by insureds’ counsel to improperly focus the case on claims handling and bad faith instead of liability for coverage and the extent of damage — the only issues in a first-party dispute.
  • This case should be kept handy at depositions and at trial and defense counsel should maintain steadfast in objecting to the improper injection of irrelevant issues in the case.


For over 40 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 the Author

Amy L. Koltnow, a Colodny Fass Shareholder, focuses her practice on representing insurance companies in complex insurance litigation and counseling insurers on claims resolution. She has represented insurers in connection with property damage and first-party coverage litigation, claims of “bad faith,” high-risk exposures, class actions and multi-district litigation.

For more information about Ms. Koltnow, click here.