This case generally reaffirms the commitment of the Florida courts to contractual appraisal rights in the absence of waiver. In First Protective Ins. Co., v. Schneider Family Partnership, 2012 Fla. App. LEXIS 19701 (Fla. 2nd DCA, Nov. 14, 2012), the court addressed a claim for insurance coverage for property damage sustained during Hurricane Wilma. The insurer acknowledged a covered loss under the policy, but the amount of damages remained in dispute. The insurer in this case invoked the appraisal provision, but the appraisal process was not completed and an unsuccessful mediation took place. The insured filed suit on multiple grounds, including a declaratory judgment claim that the insurer was not entitled to appraisal. The insurer filed a summary judgment motion claiming that it was contractually entitled to appraisal as a condition precedent to suit. The insured responded with its own summary judgment motion claiming authority under the “Alternative Procedure for Resolution of Disputed Property Insurance Claims” statute, §627.7015(7) and the Florida Administrative Code Rule 69J-2.003(10) (2005). Section 627.7015 provides a statutory procedure for resolution of first party property insurance claims. The version of the statute in effect at the relevant time did not require the insured to submit to appraisal before filing suit against an insurer if the insurer requested mediation and the mediation was unsuccessful. The statute was silent as to the ability to pursue appraisal if the insured requests mediation. However, the Florida Administrative Code Rule 69J-2.003(10) (which was repealed in May 2009) provided that if mediation is unsuccessful, the “insured may choose to proceed under the appraisal process set forth in the insured’s insurance policy, by litigation, or any other dispute resolution procedure available under Florida law.” Based on this language the trial court determined that the insured could proceed with litigation without first engaging in the appraisal process.
The appellate court reversed the trial court’s ruling on the grounds that it relied on an administrative rule that not only improperly expands the express language of the statute but deprives the insurer of its right to an appraisal under the policy. First, under the controlling statute, the insured was not required to submit to appraisal before suing the insurer if the insurer requested mediation and the results of the mediation were rejected by either party. §627.7015(7). However, on the facts of this case, the insured requested the mediation. Since the statute does not specifically address this insured-requested situation, the appellate court concluded that the insurer could pursue its appraisal rights in accordance with the policy. Second, while the language of the administrative rule did allow for litigation in the absence of appraisal, the rule improperly expanded §627.7015 by providing the insured with an option not envisioned by the statute.
This ruling is significant in reaffirming the parties’ respective rights to appraisal as expressly set forth in the particular policy. While there may be circumstances where a party waives it rights to appraisal, those rights will not be placed in jeopardy by an administrative rule which improperly expands the scope of the statute.