Third District Court of Appeal
State of Florida
Opinion filed August 30, 2017.
Not final until disposition of timely filed motion for rehearing.
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No. 3D16-1861
Lower Tribunal No. 15-19967
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David Siegel and Tamara Siegel,
Appellants,
vs.
Tower Hill Signature Insurance Company,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Jorge Cueto,
Judge.
Mintz Truppman, P.A., and Timothy H. Crutchfield; Insurance Litigation
Group, P.A., and Tracy L. Kramer and John F. Lakin, for appellants.
Kelley Kronenberg and Jorge L. Cruz-Bustillo; Methe & Rockenbach, P.A.,
and Kara Berard Rockenbach and David A. Noel (West Palm Beach), for appellee.
Before LOGUE, SCALES and LINDSEY, JJ.
LINDSEY, J.
Insured homeowners David and Tamara Siegel appeal two orders granting
final summary judgment in favor of their insurer, Tower Hill Signature Insurance
Company. The court below concluded that Tower Hill complied with its policy
obligations by paying the Siegels’ claim based on its independent adjuster’s
estimate. The court also determined that the Siegels breached a condition
precedent by failing to allow a plumbing inspection before filing suit. Because we
find that genuine issues of material fact exist as to (1) Tower Hill’s initial payment
and (2) the Siegels’ post-loss obligation to allow inspection, we reverse.
I. BACKGROUND
On May 15, 2015, a drain line collapsed under the foundation of the Siegels’
home. The property was covered under a Tower Hill homeowners’ policy and
insured at replacement cost value.1 The Siegels notified Tower Hill of their claim
on June 8, 2015, and on June 19, 2015, the property was inspected by Tower Hill’s
independent adjuster. On August 12, 2015, the Siegels submitted an estimate to
Tower Hill prepared by a public adjuster in the amount of $30,716.23 ($33,216.23
minus the $2,500 deductible). Tower Hill then sent a payment letter dated August
17, 2015, informing the Siegels that, based on Tower Hill’s current information,
the amount of their claim settlement was $4,304.75, which represented the
1 Covered losses can be adjusted on the basis of either replacement cost value or
actual cash value. Actual cash value is simply the replacement cost value minus
depreciation.
2
$6,804.75 estimate prepared by Tower Hill’s independent adjustor, less the $2,500
deductible. The payment letter advised the Siegels that this amount does not
necessarily constitute a full and final settlement of their claim and stated that the
Siegels could submit supplemental claims for any damages discovered in the
covered reconstruction and repair of the above mentioned property. On August 28,
2015, the Siegels filed suit against Tower Hill for breach of contract, alleging that
the $4,304.75 payment was inadequate.
Before Tower Hill was served with the lawsuit, it sent the Siegels two
additional letters. In the first letter, dated September 3, 2015, Tower Hill informed
the Siegels of their post-loss obligation to show the damaged property as often as
reasonably required. Additionally, the letter stated that “Master Plumbing has
been requesting inspection of the plumbing system of your home since August 18,
2015. To date, we have not been able to gain access.” In another letter, dated
September 9, 2015, Tower Hill informed the Siegels that it was rejecting their
proof of loss and continuing its investigation. Tower Hill was served on
September 10, 2015.
On February 10, 2016, Tower Hill moved for summary judgment, arguing
that it had performed as required under the policy, applicable statute, and case law.
The motion was supported by an affidavit of Tower Hill’s corporate representative,
David Polson, with the insurance policy, the estimate prepared by Tower Hill’s
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independent adjustor, and the August 17, 2015 payment letter attached as exhibits.
Tower Hill filed a second motion for summary judgment on February 23, 2016,
contending that the Siegels were in breach for failing to allow Master Plumbing to
inspect their plumbing system prior to filing suit. In support, Tower Hill submitted
another affidavit from Mr. Polson attaching the insurance policy, the September 3,
2015 letter, and the September 9, 2015 letter as exhibits. On June 7, 2016, the trial
court held a hearing, and subsequently entered two orders granting Tower Hill’s
motions for summary judgment. After denying the Siegels’ motion for rehearing
and reconsideration of both of those orders, the trial court entered a final judgment
on June 15, 2016. This appeal follows.
II. STANDARD OF REVIEW
The two issues before us are whether genuine issues of material fact exist as
to (1) Tower Hill’s required initial payment and (2) the Siegels’ compliance with
the policy’s post-loss obligation to allow reasonable inspections. We review the
trial court’s orders granting final summary judgment de novo. See Save Calusa
Trust v. St. Andrews Holdings, Ltd., 193 So. 3d 910, 914 (Fla. 3d DCA 2016).
Similarly, a trial court’s decision construing a contract presents an issue of law
subject to de novo review. Flagship Resort Dev. Corp. v. Interval Int’l, Inc., 28 So.
3d 915, 920-21 (Fla. 3d DCA 2010) (citing Florida Power Corp. v. City of
Casselberry, 793 So. 2d 1174, 1178 (Fla. 5th DCA 2001)).
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III. ANALYSIS
Summary judgment is proper under Florida Rule of Civil Procedure 1.510(c)
where "the pleadings, depositions, answers to interrogatories, admissions,
affidavits, and other materials as would be admissible in evidence on file show that
there is no genuine issue as to any material fact." Arce v. Wackenhut Corp., 40 So.
3d 813, 815 (Fla. 3d DCA 2010). The movant bears the initial burden of
demonstrating the nonexistence of any genuine issue of material fact. Id. (citing
Valderrama v. Portfolio Recovery Assocs., LLC, 972 So. 2d 239 (Fla. 3d DCA
2007)). “Once competent evidence to support the motion has been tendered, the
opposing party must come forward with admissible counter-evidence sufficient to
reveal a genuine issue of material fact.” Arce, 40 So. 3d at 815 (emphasis in
original) (citing Fla. R. Civ. P. 1.510; Michel v. Merrill Stevens Dry Dock Co.,
554 So. 2d 593, 596 (Fla. 3d DCA 1989)).
A. Tower Hill’s Initial Payment
Tower Hill’s position is that although the Siegels obtained an estimate that
was significantly higher than its initial payment, Tower Hill fully complied with
the policy because its payment was based on the estimate prepared by its
independent adjuster. In support, Tower Hill relies on Slayton v. Universal Prop.
& Cas. Ins. Co., 103 So. 3d 934 (Fla. 5th DCA 2012).
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As in this case, the underlying action in Slayton was for breach of contract,
resulting from a disagreement over claim estimates. Following property damage
suffered in a windstorm, Ms. Slayton, the insured homeowner, submitted an
estimate prepared by a public adjuster for $61,638.00. Id. at 936. Her insurer paid
$27,915.87, which was based on its lower estimate of the cost of repair. Id. The
insurer notified Ms. Slayton that she could submit supplemental claims for
additional damages “discovered in the covered reconstruction and repair” of her
property. Id. Ms. Slayton did not submit any supplemental claims and instead
filed suit against her insurer for breach of contract. Id. Despite Ms. Slayton’s
higher estimate, the Fifth District Court of Appeal upheld entry of a directed
verdict in favor of the insurer, finding that the insurer’s decision to pay the amount
of its estimate was consistent with the unambiguous loss settlement provision in
the policy. Id.
Tower Hill argues that Slayton controls and mandates affirmance because
the loss settlement provision in this case is “identical” to the provision in Slayton.
We disagree. Both loss settlement provisions provide, in pertinent part, as follows:
b. Buildings under Coverage A or B at replacement cost
without deduction for depreciation, subject to the
following:
(1) If, at the time of loss, the amount of insurance in this
policy on the damaged building is 80% or more of the
full replacement cost of the building immediately
before the loss, we will pay the cost to repair or
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replace, after application of deductible and without
deduction for depreciation, but not more than the least
of the following amounts:
(a) The limit of liability under this policy that applies
to the building;
(b) The replacement cost of that part of the building
damaged for like construction and use on the same
premises; or
(c) The necessary amount actually spent to repair or
replace the damaged building.
As the Fifth District explained in Slayton, “[t]he insurance provision cited above
unambiguously limited [the insurer’s] liability for the replacement or repair costs
to the lesser of [a] the policy limits, [b] the replacement costs for like construction
and use, or [c] the necessary amounts actually spent to repair or replace.” 103
So. 3d at 936 (emphasis added). Consequently, an initial payment based on the
amount of the insurer’s estimate (less deductible) coupled with an allowance for
supplemental claims is certainly consistent with the terms of the loss settlement
provision, as the Fifth District held in Slayton. Id. However, the analysis does not
end there.
Section 627.7011(3)(a), Florida Statutes (2017), sets a minimum amount for
initial payments made pursuant to a replacement cost homeowners’ policy:
(3) In the event of a loss for which a dwelling or personal
property is insured on the basis of replacement costs:
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(a) For a dwelling, the insurer must initially pay at
least the actual cash value of the insured loss, less
any applicable deductible. The insurer shall pay any
remaining amounts necessary to perform such repairs
as work is performed and expenses are incurred. If a
total loss of a dwelling occurs, the insurer shall pay
the replacement cost coverage without reservation or
holdback of any depreciation in value, pursuant to s.
627.702.
(emphasis added). On its face, the current version of the statute requires an initial
payment of at least the actual cash value; that is, the replacement cost less
depreciation.2 This statutory requirement is reflected in an endorsement to the
policy before us now:
b. (4) We will initially pay at least the “actual cash
value” of the insured loss, less any applicable
deductible. We shall pay any remaining amounts
necessary to perform such repairs as work is performed
2 The statute was amended in 2011. The prior version required payment of
“replacement cost without reservation or holdback of any depreciation in value,
whether or not the insured replaces or repairs the dwelling or property.” §
627.7011(3), Fla. Stat. (2010). The Senate Staff Analysis for the provision now in
effect explains the rationale behind the Legislature’s enactment of the amendment:
Insurance companies assert that the current replacement
cost and holdback provisions allow some homeowners to
file inflated or even fraudulent claims because they are
not required to make needed repairs to their dwellings or
replace their personal property if they sustain a loss.
Many states require the insurer to pay initially only the
actual cash value, and then provide the balance of the
replacement cost once the insured has replaced or
repaired the property.
Fla. S. Comm. On Banking & Ins., SB 408 (2011) Staff Analysis 5 (Jan. 24, 2011).
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and expenses are incurred. We will not require you to
advance payment for such repairs or expenses, with the
exception of incidental expenses to mitigate further
damage. If a total loss of the covered dwelling occurs, we
shall pay the replacement cost coverage without
reservation or holdback of any depreciation in value,
subject to the policy limits.
(emphasis added). Were it not for this endorsement,3 the loss settlement provision
cited above in Slayton and in the Seigels’ policy, standing alone, would violate the
initial payment requirement in section 627.7011 because the current version
requires the insurer to pay “at least the actual cash value” as opposed to the lower
of either the limit of liability, the replacement cost or the amount actually spent to
repair or replace the damaged building.
Tower Hill contends that Slayton allows an insurer to fully comply with the
initial payment requirement by simply paying the amount of its own estimate. This
is plainly not so since Slayton explicitly declined to address the payment
requirement in section 627.7011. Although Ms. Slayton argued on appeal that the
loss settlement provision above violated section 627.7011, Florida Statutes (2009),4
the Fifth District declined to address the argument because it was not preserved
below. Slayton, 103 So. 3d at 936; see also Francis v. Tower Hill Prime Ins. Co.,
42 Fla. L. Weekly D1565 (Fla. 3d DCA July 12, 2017). In short, Tower Hill
3 No comparable policy endorsement is mentioned in Slayton.
4Under the statute in effect in 2009, the required payment was more demanding.
See supra note 2.
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cannot rely on Slayton because Slayton is silent as to the initial payment
requirement found in section 627.7011 and in the endorsement to the Siegels’
policy.
Tower Hill also argues on appeal that it complied with the initial payment
requirement of the policy and section 627.7011 because it paid more than required:
the replacement cost value instead of the lower actual cash value. We reject this
argument because even if Tower Hill did pay the replacement cost based on its
estimate, this amount would still be lower than the Siegels’ actual cash value
estimate, and consequently, a genuine issue of fact would still exist as to actual
cash value. We find no support in Slayton—or any other authority Tower Hill
cites5—for the proposition that the insurer is able to unilaterally determine, as a
matter of law, actual cash value or replacement cost value.
5 In addition to Slayton, Tower Hill relies on Luciano v. United Prop. & Cas. Ins.
Co., 156 So. 3d 1108 (Fla. 4th DCA 2015) and Rizo v. State Farm Florida Ins. Co.,
133 So. 3d 1114 (Fla. 3d DCA 2014). In both cases, the insureds brought breach
of contract actions against their respective insurers for failure to pay supplemental
claims. The circuit courts in both cases granted summary judgment in favor of the
insurers on statute of limitations grounds. On appeal, this Court and the Fourth
District reversed, finding that under a prior version of § 95.11(2)(e), the statute of
limitations did not begin to run until the allegations of breach for failure to pay
supplemental claims. See Rizo, 133 So. 3d at 1114 n.1 (citing § 95.11(2)(e), Fla.
Stat. (2011)) (noting that the 2011 amendment to § 95.11(2) shortened the
limitations period for property insurance claims and that subsection (e) was added
to specify that in “an action for breach of a property insurance contract,” the
limitations period runs from the date of loss); Luciano, 156 So. 3d at 1110 n.1
(citing § 95.11(2)(e), Fla. Stat. (2011)) (§ 95.11(2)(e) was amended in 2011 to
provide that the limitations period for an action for breach of property insurance
contract runs from the date of loss). Tower Hill points us to language in both cases
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Simply stated, Tower Hill, as the movant for summary judgment, has the
initial burden to establish that it paid at least the actual cash value of the cost of
repairs in compliance with the policy and the statute. Mr. Polson’s affidavit does
not do that. Rather, he merely avers that the property was inspected by Tower
Hill’s independent adjuster, the adjuster prepared an estimate for damages, and
Tower Hill paid based on the estimate.
In addition to its Slayton argument, Tower Hill also contends that the
Siegels’ lawsuit was premature because Tower Hill had not yet issued a complete
and final initial payment. It is clear from the August 17, 2015 payment letter that
the $4,304.75 payment was based on the information Tower Hill had at the time.
Undisputedly, by August 17, 2015, Tower Hill had both inspected the property and
received the Siegels’ estimate in the amount of $30,716.23. While it is true that
Tower Hill informed the Siegels that the investigation was ongoing and that they
could submit supplemental claims, Tower Hill indicated that a supplemental claim
could only be submitted if the Siegels performed repairs. In other words, the
payment letter suggests that Tower Hill had made its initial payment, and any
subsequent payments were conditioned upon the Siegels initiating repairs. Indeed,
holding that the insurers’ initial payments evidenced performance under the policy.
But this language does not advance Tower Hill’s position because unlike here,
there were no allegations in Luciano or Rizo that the initial payments themselves
were insufficient and constituted a breach.
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this is the position Tower Hill takes in its Answer Brief, which states the
following:
Here, consistent with the policy, statute, and Slayton,
Tower Hill paid at least the ACV of the loss by paying
the higher RCV of the loss. Additionally, Tower Hill
would be required by both the policy and the statute to
pay additional money for the loss to Plaintiffs if they
performed repairs in excess of the paid RCV of the loss.
However, Plaintiffs admittedly performed no repairs.
Accordingly, Tower Hill has failed to meet its initial burden leaving a genuine
issue of material fact as to whether Tower Hill is in compliance with the policy and
the stature.
B. The Policy’s Post-Loss Inspection Provision
The court below found that the Siegels failed to allow a re-inspection of the
property prior to filing this action and that such failure constituted a material
breach on their part. The policy sets forth certain conditions, one of which is the
following:
SECTION I – CONDITIONS
2. Your Duties After Loss. In case of a loss to covered
property, you must see that the following are done:
....
f. As often as we reasonably require:
(1) Show the damaged property;
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The policy also includes a “Suits Against Us” provision, which provides that “No
legal action can be brought against us unless the policy provisions have been
complied with . . . .”
Tower Hill contends that Master Plumbing’s inability to schedule an
inspection before the Siegels filed suit resulted in a violation of a condition
precedent, giving rise to a presumption of prejudice—a presumption the Siegels
made no effort to rebut. The court below agreed and specifically found in its order
granting Tower Hill’s motion for summary judgement that “there was a failure to
allow a re-inspection of the insured property before the lawsuit was filed.”
It is the Siegels’ position that Tower Hill never requested a plumbing
inspection prior to the Siegels filing suit and that there cannot be a failure to allow
something that was never requested. Tower Hill contends that the affidavit of its
corporate representative and attached letters dated September 3 and 9, respectively,
along with two unauthenticated emails purportedly from Ms. Heidi Moore at
Tower Hill to Priscilla Rivera and Chrissy Fillmon, who are otherwise
unidentified, are sufficient to meet this burden. We respectfully disagree.
Mr. Polson avers that Tower Hill assigned Master Plumbing to inspect the
Siegels’ plumbing system on August 18, 2015 but that Master Plumbing was
unable to inspect. Absent from the affidavit is any averment that Master Plumbing
actually made contact with the Siegels and, if so, that the Siegels refused Tower
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Hill’s request. Mr. Polson further avers that on September 3, Tower Hill sent
correspondence to the Siegels stating that “Master Plumbing has been requesting
inspection of the plumbing system of your home since August 18, 2015. To date,
we have not been able to gain access.” On its face, neither the affidavit nor the
letter state that Tower Hill made the request of the Siegels or, if not, either that
Tower Hill or Master Plumbing advised the Siegels that Master Plumbing was
making a request on Tower Hill’s behalf. Similarly, there is no averment that the
Siegels affirmatively refused such request.
Mr. Polson next avers that the September 9 letter informs the Siegels that
“[w]e have requested numerous times to have Master Plumbing inspect the
plumbing to no avail.” However, there is no further elaboration or explanation as
to how or to whom such request was made or as to why the plumbing inspection
did not occur. Irrespective of the language used, both of these letters, as well as
the unauthenticated emails, were dated after the lawsuit was filed. It is undisputed
that the Siegels allowed Tower Hill’s independent adjuster to inspect the property
on June 19, 2017, yet, absent from Mr. Polson’s affidavit is any averment that the
Siegels refused to comply with any pre-litigation request made by either Tower
Hill or Master Plumbing. Simply stated, there is no allegation anywhere in the
record that Tower Hill requested the Siegels to provide a pre-litigation plumbing
inspection and that the Siegels refused to do so. Accordingly, Tower Hill does not
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meet its initial summary judgment burden to demonstrate that the Seigels are in
breach for failure to comply with the policy’s post-loss obligation to allow
reasonable inspections.
IV. CONCLUSION
For the foregoing reasons, we find that genuine issues of material fact exist
as to Tower Hill’s required initial payment and the Siegels’ compliance with the
policy’s post-loss obligation to allow reasonable inspections.
Reversed and remanded for further proceedings consistent with this opinion.
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