State Farm Florida Ins. Co. v. Gonzalez, 2011 WL 6057875 (Fla. 3d DCA Dec. 7, 2011)
This case arises from a homeowner’s hurricane claim in which the insured invoked appraisal under the State Farm policy after the parties could not reach an agreement as to the amount of the loss. State Farm did not pay certain amounts designated in the appraisal award for ordinance and law coverage as the policy provided that these amounts were not payable under the dwelling was actually repaired. The insured filed a “Petition to Confirm Appraisal Award” alleging that State Farm failed to make the payments required under the award. State Farm did not file a response to the petition but set the matter for hearing. The trial court granted the petition and entered judgment for the insured.
The appellate court considered whether a petition to confirm appraisal is an authorized pleading under Florida law.
The appellate court ruled that a “petition to confirm appraisal” is not an authorized pleading under Florida law. The Florida Rules of Civil Procedure allow a petition to be filed when authorized by a statute or rule. There is no rule or statute allowing for the filing of a petition to confirm an appraisal award.
The appellate court noted that the Florida Supreme Court has held that the Florida Arbitration Code is not applicable to appraisal cases. The appellate court reversed and remanded with instructions to allow the insured to file a complaint alleging a viable cause of action for breach of contract against State Farm. State Farm may answer and assert any affirmative defenses contesting coverage. The trial court was required to adjudicate any coverage defenses to building or law coverage if asserted by State Farm. If the trial court decides that coverage exists, the dollar value agreed upon by the appraisal process will be binding upon both parties.
This decision clearly reinforces the Florida Supreme’s Court’s ruling in Allstate Ins. Co. v. Suarez, 833 So. 2d 762 (Fla. 2002) that appraisal proceeding pursuant to a provision in an insurance policy is not governed by Florida’s Arbitration Code. As appraisal does not fall under the Code, there is no provision to confirm appraisal awards. A dispute over an appraisal award payment must be pursued under the contract which authorized the proceeding in the first place. Further, an insurer may assert any defenses available to such an action, including coverage defenses.