Typical property policies require the insured to cooperate with the insurer in the investigation of the claim, and specifically require the insured to submit a sworn proof of loss, provide timely responses to an insurer’s request for documentation related to the claim and, if requested, submit to examinations under oath. If the insured fails to abide by such requirements, the issue, in many jurisdictions, then becomes whether the requirement is a condition precedent to coverage (which may result in a presumption of prejudice to the insurer that may be rebutted), or whether the requirement is a condition subsequent (which may place the burden on the insurer to establish a material breach that substantially prejudices the insurer). See, e.g., Bankers Ins. Co. v. Macias, 475 So. 2d 1216 (Fla. 1985).
The Florida Fourth District Court of Appeal recently considered this issue in the context of a failure to give immediate notice of the loss and failure to provide a sworn proof of loss within sixty days of the loss. Soronson v. State Farm Florida Ins. Co., 2012 Fla. App. LEXIS 12100 (July 25, 2012). Soronson involved a Hurricane Wilma claim for damages to the insureds’ home. The insureds notified State Farm of damages to the roof in February of 2009, three years after Wilma made landfall. Id. at *2. The insureds claimed that they had an inspection performed earlier in February 2009 that revealed damages due to Wilma. The insureds provide a sworn proof of loss in December 2009. State Farm investigated and denied the claim based on the following policy provisions:
- “[a]fter a loss . . . [the insureds] shall . . . give immediate notice to [the insurer],” and
- the insureds shall “submit to [the insurer], within 60 days after the loss, [the insureds’] signed, sworn proof of loss,” and
- “No action shall be brought unless there has been compliance with the policy conditions.”
The Soronsons filed a lawsuit against State Farm alleging breach of contract. State Farm moved for summary judgment based on material breach of the policy conditions, which was granted by the trial court in a one sentence ruling.
The Fourth District Court of Appeal affirmed the trial court’s grant of summary judgment to State Farm. On appeal, the insureds argued first that the notice requirements were cooperation clause requirements that required the insurer to prove material breach and substantial prejudice. Id. at *4-5. The Fourth District summarily dismissed this argument, finding that the policy explicitly required immediate notice and a sworn proof of loss within 60 days, which were conditions precedent to recovery under the policy. Id. at *6-8 (citing, among other authority, Bankers).
The insureds also argued that their own affidavit in response to the summary judgment motion, which attached unsworn engineering reports, established that no windstorm comparable to Wilma had occurred since Hurricane Wilma and that the insureds had done no work to the roof since Wilma. As such, the insureds claimed that they overcame any presumed prejudice to State Farm. The Fourth District disagreed, finding that:
“At best, the insureds’ affidavit merely adopts unsworn statements that Hurricane Wilma damaged their roof and that their roof needs to be replaced as a result. Their affidavit does not present sufficient counterevidence to overcome the insurer’s presumption of prejudice.”
Soronson represents the latest in a line of cases in Florida analyzing the condition precedent and failure to cooperate issues that arise in the claim process. [See, e.g. Whistler case in 6/27/12 blog entry] This line of cases emphasizes the importance of the investigative tools available to the insurer during the claim process, and that the consequences of failing to abide by explicit terms of the policy may result in a forfeiture of the claim. Soronson is also significant in Florida because there have been numerous late claims asserted arising from Hurricane Wilma, which were not reported until years after the storm.