Consistent with its general support of Alternate Dispute Resolution (“ADR”) procedures, Florida promulgated a mediation procedure for property insurance claims. Fla. Stat. § 627.7015 (2010). This statute contains a provision which, should the insurer fail to comply with mediation notice requirements, can result in a waiver of the insurer’s appraisal rights under the insurance policy.
breach of contract
Appraisal Award, Standing Alone, Does Not Entitle A Policyholder To Judgment Against An Insurer In The Amount Of The Award, According To Texas Appellate Court
The Texas Court of Appeals has reaffirmed established Texas law, holding that the entry of an appraisal award in favor of the policyholder does not, by itself, establish that the insurer is obligated to pay the award or that the policyholder is entitled to judgment in the amount of the award. Security National Ins. Co. …
Appraisal award in favor of insured was not a “final determination” of insurer’s liability under policy, and Florida court dismisses bad faith claim as premature
A few weeks ago, we reported on the Florida appellate court’s decision in Trafalgar At Greenacres, LTD v. Zurich American Ins. Co., No. 4D11-1376 (Fla. 4th DCA, Sept. 5, 2012), in which the court permitted a policyholder to sue its property insurer for bad faith even though the trial court had ruled that the…
“Earth Movement” Exclusion Bars Coverage for Damage Traced to Leak from Broken Water Pipe, According to Massachusetts Appeals Court
Most commercial and personal lines property insurance policies exclude damage caused directly or indirectly by the peril of “earth movement.” The ISO version of this exclusion appears in many modern policies and provides that:
- [Insurer] will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.
b. Earth Movement
(1) Earthquake, including any earth sinking, rising or shifting related to such event.
(2) Landslide, including any earth sinking, rising or shifting related to such event.
(3) Mine subsidence, meaning subsidence of a man-made mine, whether or not mining activity has ceased;
(4) Earth sinking (other than sinkhole collapse), rising or shifting including soil conditions which cause settling, cracking or other disarrangement of foundations or other parts of realty. Soil conditions include contraction, expansion, freezing, thawing, erosion, improperly compacted soil and the action of water under the ground surface.
(See Causes of Loss—Special Form, CP 10 30 10 00, Copyright Insurance Services Office, Inc. 1999)
For more than a decade, courts throughout the country have wrestled with the question of whether the Earth Movement exclusion applies in all circumstances where earth movement plays some part in the chain of events that produced the loss. Most of the reported decisions address the interpretation and application of subparagraph (4) of the exclusion, quoted above. The loss scenarios that typically spawn coverage litigation involve some form of damage to a building’s structure (floor slab, foundations walls, etc.) caused by the movement or depletion of supporting or surrounding soil due to, (i) demolition, blasting or heavy construction activities at neighboring properties; or (ii) water leaking from an underground supply or drainage pipe.
A number of jurisdictions have construed the Earth Movement exclusion narrowly and ruled that it applies only to earth movement associated with “natural” causes (such as an earthquake or landslide), and not to construction or other causes involving human intervention. En route to finding coverage, those courts typically rely on the historical development of the Earth Movement exclusion or resort to the doctrine of “reasonable expectations.” In the other camp lie courts that apply the exclusionary language literally to bar coverage for all property damage associated with earth movement, regardless of what caused the ground to move. Those courts often rely upon the anti-concurrent causation language of the exclusion: “Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.”
Continue Reading “Earth Movement” Exclusion Bars Coverage for Damage Traced to Leak from Broken Water Pipe, According to Massachusetts Appeals Court
Assignment Does Not Relieve Insured’s Obligation To Submit To Examination Under Oath (EUO) According To Florida Court of Appeal
A Florida court of appeal recently held that an insured’s assignment of a claim did not relieve her of the obligation to appear for an examination under oath (EUO). This decision is significant because it makes a distinction between an assignment of proceeds of a property insurance policy and an assignment (or transfer) of the…
Entry of appraisal award constitutes “favorable resolution” of underlying breach of contract claim under Florida law, thereby permitting insured to pursue statutory bad faith damages
In many jurisdictions, a bad faith case predicated on a property insurer’s denial or alleged underpayment of a claim will not reach a jury if it is determined that the insurer fulfilled its obligations under the contract. The rationale is that if the insurer’s alleged conduct does not rise to the level of a breach…
Florida Statute of Limitations for Breach of Insurance Policy: Under New Florida Statute, Claims Will Accrue On Date of Loss
The statute of limitations for bringing suit against a property insurer may be far shorter for policies issued after May 17, 2011, under Florida law. As a Florida federal court recently explained in West Palm Gardens Villas Condo Assn v. Aspen Specialty Ins Co., 2012 U.S. Dist. LEXIS 104861 (S.D. Fla. June 25, 2012),…
Insureds’ Failure to Submit To Examinations Under Oath (EUO) Led to Summary Judgment for Insurer Affirmed By Fifth Circuit
The Fifth Circuit recently affirmed the Eastern District of Louisiana’s grant of summary judgment to the insurer where the insureds refused to submit to an Examination Under Oath (“EUO”) before filing a law suit against their insurer.
In Hamilton v. State Farm Fire & Casualty Ins. Co., State Farm insured the Hamiltons under a homeowners’…