Tower Hill Signature Insurance v. Speck

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT

NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED

TOWER HILL SIGNATURE INSURANCE, ETC.,

Appellant,

v. Case No. 5D15-1719

LARRY J. SPECK, JR. AND KEREN E. SPECK,

Appellees.
________________________________/

Opinion filed August 12, 2016

Appeal from the Circuit Court
for Orange County,
Patricia A. Doherty, Judge.

David R. Terry, Jr., of The Rock Law Group,
P.A., Maitland, for Appellant.

Raymond T. Elligett, Jr. and Amy S. Farrior,
of Buell & Elligett, P.A., Tampa, and Ty
Tyler and Clark Hamilton, of Tyler &
Hamilton, P.A., Jacksonville, for Appellees.

COHEN, J.

Tower Hill Signature Insurance Co. (“Tower Hill”) appeals the final judgment,

following a jury trial, ordering it to pay up to $164,080 for subsurface repair and

stabilization to the home of Larry and Keren Speck (“the Specks”) due to the Specks’

claim for sinkhole damage. We find that the trial court abused its discretion in not admitting

evidence of the amount the Specks received to repair the home from a prior insurance

company after a previous sinkhole claim on the same property.
 The Specks made this claim against their Tower Hill policy in January of 2010.

Following an initial investigation, Tower Hill refused to pay the claim and rescinded the

Specks’ policy alleging that the home had unrepaired damage at the time the policy was

issued. 1 The Specks then sued Tower Hill for breach of the insurance contract. Tower Hill

alleged, as an affirmative defense, that the contract was void because the Specks failed

to disclose unrepaired damage.

In 2001, the Specks made a claim with their previous insurer for sinkhole damage

to the same house. The Specks claimed their home was a total loss and sought damages

up to their policy limit of $330,000. An engineer for the insurer recommended $166,000

in below ground repairs. The Specks’ lawyer claimed, in a later affidavit, the need for an

additional $64,000 for above ground repairs. The claim was settled for $260,000. 2 Of the

$260,000, the Specks spent only $15,000 on repairs. The rest was used to pay off two

mortgages—totaling $217,000—and the public appraiser. The Specks commissioned a

contractor to make those initial repairs, and Larry Speck testified that he commissioned

the company to repair the home completely, after which the cracks in the home closed up

and were patched. Those repairs were completed by 2004.

At trial, Tower Hill sought to establish that the initial sinkhole damage had not been

fully repaired. The company presented the testimony of a tenant who rented the home

following the repairs contradicting Larry Speck’s testimony. Tower Hill also proffered

testimony from Larry Speck to establish that in 2001, the Specks received $260,000 to

1 The policy specifically stated that homes with unrepaired damage were not
eligible for coverage.
2The record is unclear as to the basis for the additional $30,000. Attorney’s fees
were awarded separately.

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have already completely compensated the plaintiff. See Joerg v. State Farm Mut. Auto.

Ins. Co., 176 So. 3d 1247, 1249-50 (Fla. 2015).

This argument is unpersuasive because the amount of the previous settlement is

directly relevant to the issue of whether the Specks misrepresented to Tower Hill that

there was no unrepaired damage to their property prior to signing their insurance contract.

Because this issue is central to the final disposition of the case—and Tower Hill’s

affirmative defense—we do not believe there was a significant risk of confusing the jury

about the issues. In fact, the jury asked about the amount of the 2001 settlement during

its deliberations. Further, there was little risk of prejudice because, unlike evidence of

collateral source payments, which can lead to a windfall for the tortfeasor, the evidence

of the amount of the Specks’ previous settlement goes directly to Tower Hill’s liability

under the contract.

We find the trial court’s decision to exclude the amount of the Specks’ previous

settlement was an abuse of discretion. Accordingly, we vacate the final judgment,

including the award of attorney’s fees, and remand for a new trial.

REVERSED and REMANDED FOR NEW TRIAL.

LAMBERT, J., and LEMONIDIS, R., Associate Judge, concur.

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claimed damages pre-existed the event allegedly giving rise to liability. See State Farm

Fire & Cas. Co. v. Pettigrew, 884 So. 2d 191, 196-97 (Fla. 2d DCA 2004).

Here, there is no question that the existence of unrepaired damage was a material

issue at trial. We believe the disparity between the amount of the settlement the Specks

received to repair the home in 2001 and the amount actually spent on repairs tends to

make more probable Tower Hill’s allegation that there was prior unrepaired damage to

the home when the Specks signed the insurance contract. The disparity also makes less

probable the Specks’ argument that their home was completely repaired for $15,000. We

find, therefore, that the evidence was relevant and should have been presented to the

jury.

The Specks argue that the evidence was nonetheless properly excluded as

duplicative of other admitted evidence. 4 Although the Specks are correct that

interrogatories and other reports documenting the unrepaired damage came into

evidence, this evidence was not as powerful as the amount of the settlement itself. The

sheer size of the disparity between the two figures tends to prove that the Specks did not

repair all of the original damage. Thus, we find that the amount of the settlement was not

duplicative of the evidence already entered at trial.

The Specks also argue that the amount of the settlement was properly excluded

because the evidence was confusing and prejudicial. They analogize the amount of the

previous payment to evidence of a collateral source payment, which is generally

inadmissible because of the risk of leading the jury to believe that previous payments

4 While we need not reach the merits of the Specks’ remaining arguments since
the trial court ruled that the evidence was irrelevant under sections 90.401-402, we do so
to provide direction to the trial court on remand.

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have already completely compensated the plaintiff. See Joerg v. State Farm Mut. Auto.

Ins. Co., 176 So. 3d 1247, 1249-50 (Fla. 2015).

This argument is unpersuasive because the amount of the previous settlement is

directly relevant to the issue of whether the Specks misrepresented to Tower Hill that

there was no unrepaired damage to their property prior to signing their insurance contract.

Because this issue is central to the final disposition of the case—and Tower Hill’s

affirmative defense—we do not believe there was a significant risk of confusing the jury

about the issues. In fact, the jury asked about the amount of the 2001 settlement during

its deliberations. Further, there was little risk of prejudice because, unlike evidence of

collateral source payments, which can lead to a windfall for the tortfeasor, the evidence

of the amount of the Specks’ previous settlement goes directly to Tower Hill’s liability

under the contract.

We find the trial court’s decision to exclude the amount of the Specks’ previous

settlement was an abuse of discretion. Accordingly, we vacate the final judgment,

including the award of attorney’s fees, and remand for a new trial.

REVERSED and REMANDED FOR NEW TRIAL.

LAMBERT, J., and LEMONIDIS, R., Associate Judge, concur.

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