Newsletter


Newsletter

Florida Bar Ethics Committee Confirms the rule on Attorneys Advising Clients to Clean Up Social Media Pages.

Posted on October 5, 2015

The Professional Ethics Committee of the Florida Bar agrees that a lawyer may advise a client to use the highest level of privacy setting on the client’s social media pages. The committee also agrees that a lawyer may advise the client pre-litigation to remove information from a social media page, regardless of its relevance to a reasonably foreseeable proceeding, as long as the removal does not violate any substantive law regarding preservation and/or spoliation of evidence. The committee is of the opinion that if the lawyer does so, an appropriate record of the social media information or data must be preserved if the information or data is known by the lawyer or reasonably should be known by the lawyer to be relevant to the reasonably foreseeable proceeding. The committee is of the opinion that the general obligation of competence may require the inquirer to advise the client regarding removal of relevant information from the client’s social media pages, including whether removal would violate any legal duties regarding preservation of evidence, regardless of the privacy settings. If a client specifically asks the inquirer regarding removal of information, the lawyer’s advice must comply with Rule 4-3.4(a). What information on a social media page is relevant to reasonably foreseeable litigation is a factual question that must be determined on a case-by-case basis. In summary, Proposed Advisory Opinion 14-1 confirms that a lawyer may advise that a client change privacy settings on the client’s social media pages so that they are not publicly accessible. Provided that there is no violation of the rules or substantive law pertaining to the preservation and/or spoliation of evidence, a lawyer also may advise that a client remove information relevant to the foreseeable proceeding from social media pages as long as an appropriate record of the social media information or data is...

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Fifth District Court of Appeal of Florida finds Expert Witness Compensation Admissible Evidence.

Posted on September 22, 2015

In Vazquez v. Martinez, 2015 Fla. App. LEXIS 13895, Ms. Martinez was stopped at a red light when her car was rear-ended by Ms. Vazquez. Ms. Martinez claimed injuries from the accident and sued Ms. Vazquez. During the trial, the trial court permitted Ms. Martinez to present evidence that, over the past three years, payments totaling almost $700,000, were made “by the defense or its agents” to Ms. Vazquez’s expert witnesses. Ms. Vazquez argued that this evidence was irrelevant because she did not have any direct financial relationship with any of the experts, and instructing the jury on payments made by “representatives of the defendant” or “defendant or its agents” improperly implied the existence of insurance. The trial court allowed the evidence to be presented and Ms. Vazquez appealed. The Court found that whether a party has a direct relationship with any of the experts does not determine whether discovery of the doctor/law firm relationship or doctor/insurer relationship is allowed. The Court emphasized that the purpose of the rule is to expose any potential bias between a party and an expert. Evidence of bias may be found in the financial ties between all of the litigant’s agents, including the litigant’s law firm or insurer and the expert. Moreover, the Court stated that the trial judge adeptly permitted evidence of possible bias without disclosing the existence of insurance. Therefore, the Court concluded that the trial court did not abuse its discretion in permitting Ms. Martinez to present the challenged...

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When the insured had not complied with his post-loss obligations, the insurer could not conduct a meaningful investigation in order to adjust the claim, and it was error to grant the insured’s motion to compel appraisal.

Posted on August 13, 2015

In State Farm Fla. Ins. Co. v. Hernandez, 2015 Fla. App. LEXIS 9215, State Farm appeals the trial court’s non-final order compelling appraisal of Alfredo Hernandez’s supplemental Hurricane Wilma claim. This appeal stems from a supplemental Hurricane Wilma insurance claim that was filed after the homeowner obtained a public insurance adjuster. This particular supplemental claim was filed five years after the insurer paid the initial claim of loss filed by Hernandez. The record reflects that Hurricane Wilma struck Miami on October 24, 2005, and that within one month of Hernandez’s claimed loss, State Farm paid Hernandez $36,858.80 (after subtracting the $5260 deductible) to cover the repairs, which included $27,800 for a full roof replacement. Hernandez did not complete the roof repair until nearly a year later because he was unable to acquire the proper roof tiling. Hernandez claims he noticed additional damage, including water stains, damage to the wiring and walls, and leaking in the roof sometime after State Farm’s initial payment. Allegedly based on these additional damages, Hernandez renovated his entire home by replacing the floor tiles throughout the house; replacing the sinks, tubs, toilets, faucets, tiles, and lighting fixtures in the three bathrooms; replacing all of the cabinets and appliances in the kitchen; replacing some windows and window sills; and repainting various areas in and around the home. Although these renovations were completed in early 2007, Hernandez did not contact State Farm before, during, or after these repairs were made to allow inspection by State Farm. Hernandez only sparsely documented his costs with checks and receipts for only a few of the claimed repairs, and he claims that he paid cash for a substantial portion of the renovations. In November 2010, Hernandez contacted State Farm claiming he was entitled to supplemental damages under the terms of the policy. In response, State Farm requested a sworn proof of loss and any supporting documentation. Hernandez submitted his initial sworn proof of loss claiming he was entitled to an additional $201,038.84 in damages. Hernandez’s sworn proof of loss included the public adjuster’s estimate to replace Hernandez’s roof in the amount of $53,000 even though State Farm had already paid Hernandez $27,865 within one month of the storm to replace his roof and Hernandez had fully replaced his roof by 2006. Recognizing that his first sworn proof of loss for the supplemental claim had falsely included a claim for $53,000 to replace the roof, which had already been replaced in 2006 for $27,865—not the $53,000 sworn to by Hernandez—Hernandez filed a second sworn proof of loss for his supplemental claim wherein he reduced his supplemental claim from $201,038.84 to $168,346.12. This second sworn proof of loss, however, still included a claim to replace the roof for $27,800, which Hernandez admits State Farm had already paid in 2006. In May 2011, Hernandez’s supplemental claim changed again. When Hernandez testified at his Examination Under Oath (“EUO”), he stated that, in addition to the roof replacement and repairs for which he had already been compensated based on his original 2005 claim, he spent approximately $65,000 to make additional repairs to his home rather than the $201,038.84 he claimed in his first sworn proof of loss or the $168,346.12 he claimed in his second sworn proof of loss. In October 2011, State Farm paid Hernandez...

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An assignee of post-loss insurance benefits could sue for breach of such benefits.

Posted on August 13, 2015

In United Water Restoration Group., Inc. v. State Farm Fla. Ins. Co., 2015 Fla. App. LEXIS 10403, United Water Restoration Group, Inc., asks that we exercise our authority to reinstate its complaint against State Farm Florida Insurance Company, which was dismissed by the county court in an order affirmed by the circuit court. According to the complaint, the home of Oran Walker—insured by State Farm—was damaged by water in 2012. Walker entered into a remediation contract with United Water to repair the damage, executing a written assignment of “any and all insurance rights, benefits and proceeds” from his State Farm policy to United Water. After State Farm refused to pay the $2,744.64 bill that United Water submitted, the latter sued the former for breach of contract, alleging that United Water was an assignee of Walker’s rights and benefits. Attached to the complaint were copies of the assignment and United Water’s bill. State Farm moved to dismiss and for summary judgment, contending that it had notified Walker it was denying coverage because an inspection of the home showed the damage was consistent with “repeated leakage and seepage, mold, rot, and decay, which are all specifically excluded under the policy.” It argued that the duty to satisfy the conditions of coverage remained solely with Walker, who was required to contest in court the denial of coverage, not United Water. After a hearing, the county court ruled that the “question of coverage pursuant to the policy is one which the named Insured must bring before the Court and thus, Plaintiff, United Water Restoration Group, Inc. as assignee cannot pursue the claim before the Court.” The court granted State Farm’s motion to dismiss, a ruling affirmed by the circuit court. United Water petitioned for relief via certiorari to the First District Court of Appeal of Florida. The First District Court of Appeal found that due process was not afforded to United Water because the county court granted the motion to dismiss by going beyond the four corners of the complaint. The dismissal order was based on State Farm’s defense that coverage under its policy was unavailable, a ruling that went beyond whether United Water’s complaint stated a claim. Additionally, the Court stated that the dismissal of United Water’s complaint violated the clearly established principles of law that an assignee of post-loss insurance benefits can sue for breach of such benefits. The Court reiterated that clearly established law permits United Water to bring suit to seek recovery under the State Farm policy, and if necessary, seek a coverage determination. The dismissal order had the harsh effect of barring United Water’s enforcement of its bargained-for right to pursue assigned benefits, which amounts to a miscarriage of...

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The Fourth District Court of Appeal of Florida Rules that Post-Loss Assignment of Benefits are Permissible.

Posted on June 22, 2015

In One Call Prop. Servs. v. Sec. First Ins. Co., 2015 Fla. App. LEXIS 7643, One Call, as an alleged assignee of an insured on a homeowners’ insurance policy, brought a complaint for breach of contract against the insurer, Security First, alleging that One Call performed emergency water removal services for the insured following an August 2012 water event, that the insured had assigned his right to insurance proceeds as payment, and that Security First refused to reimburse it adequately for the services provided. In the alternative, the complaint alleged that One Call had an assignment in equity based on the services it rendered. Attached to the complaint was a copy of the assignment, which stated in relevant part: I, the Owner, hereby assign any and all insurance rights, benefits, and proceeds under any applicable insurance policies to One Call. I make this assignment in consideration of One Call’s agreement to perform services and supply materials and otherwise perform its obligations under this contract, including One Call not requiring full payment at the time of service. I intend to transfer all insurance rights to One Call, including any causes of action which exist or may exist in the future. One Call did not attach a copy of the policy to the complaint. Instead, One Call alleged that a copy of the policy would be obtained “through the discovery process” and would “be filed in support of this action at that time.” One Call also alleged compliance with all conditions precedent to recovery under the policy. Security First moved to dismiss, arguing that One Call lacked standing to maintain the lawsuit and that the complaint failed to state a cause of action. Security First advanced multiple arguments in support of its position that the assignment was invalid under the terms of the policy and Florida law. Attached to the motion to dismiss was a certified copy of the policy. One Call filed a written response to the motion to dismiss, arguing that the motion impermissibly went beyond the four corners of the complaint and asserting various reasons for upholding the validity of the assignment. The trial court held a hearing on the motion to dismiss. At the hearing, counsel for One Call focused on the argument that “the nonassignment provision of the policy when read in conjunction with the loss payment provision of the policy precludes the plaintiff, as an assignee, from bringing a lawsuit to determine the amount of the loss or . . . what is due under the policy.” The trial court ultimately granted the motion to dismiss on the basis of this argument, noting that the same ruling had been made in a similar case and that the court was “going to stay consistent.” The court later entered a final order dismissing the complaint with prejudice. One Call appealed the dismissal. One Call argues that the trial court erred as a matter of law in dismissing its complaint based on the anti-assignment and loss payment provisions of the policy. One Call maintains that: (1) post-loss assignments of insurance proceeds are valid under Florida law even if the policy contains an anti-assignment clause; (2) the right of payment accrues on the date of the loss; and (3) the loss payment provision does not preclude an assignment of...

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An insurer was not entitled to summary judgment in a coverage dispute because whether the insured provided “prompt” notice of her hurricane damage claim was a jury question.

Posted on June 22, 2015

In Laquer v. Citizens Prop. Ins. Corp., 2015 Fla. App. LEXIS 7570, Laquer, the owner of a condominium unit, purchased an insurance policy from Citizens that insured personal property from damage by a hurricane or other weather conditions. The policy required “prompt notice” of any claim. It also required Laquer to submit a sworn proof of loss within sixty days of Citizens’ request. On October 24, 2005, Hurricane Wilma struck South Florida. Over three years later, on May 19, 2009, Laquer notified Citizens of mold growth on her furniture, fixtures, carpets, linens, and draperies. She also submitted a sworn proof of loss within sixty days of Citizens’ request. Citizens denied the claim for failure to comply with the policy’s requirement to provide “prompt” notice. Laquer brought this suit for breach of the policy. After discovery was taken, Citizens moved for summary judgment. Citizens argued that a delay of more than three years in reporting an insurance claim is not “prompt” notice as a matter of law, relying on case law holding that notice of hurricane damage submitted several years after the storm constituted late notice. Laquer responded to Citizens’ summary judgment motion by arguing that the issue of whether the notice was “prompt” turns on when the insured first knew or should have known she had suffered damage, which presents an issue of fact. Laquer contended that she rented her condominium unit fully furnished to a tenant for a period extending approximately three years before the hurricane to three years after the hurricane. After Hurricane Wilma struck, the condominium’s manager visited Laquer’s unit and found no damage. Furthermore, the tenant and the housekeeper who attended to the tenant’s maintenance requests, did not report any damage. In support of her position, she filed her affidavit, the deposition of the condominium’s manager who inspected her condominium unit after Hurricane Wilma, and the affidavit of an environmental contractor who repaired damage to Laquer’s unit. Laquer stated she had no way of learning about the damage for three years until shortly before she filed her claim. After reviewing the summary judgment record, the trial court entered a partial summary judgment. It concluded, as a matter of law, that Laquer failed to provide “prompt” notice of her insurance claim. But the court also ruled that there were material facts in dispute over whether Citizens was prejudiced by the late notice. The case went to trial on that issue. The jury returned a verdict in favor of Citizens, and the trial court entered final judgment for Citizens. Laquer appealed the final judgment entered in favor of Citizens Property Insurance Corporation following the jury trial. The Third District Court of Appeal of Florida reversed and remanded the case, finding that Citizens was not entitled to summary judgment in the coverage dispute because whether Laquer provided “prompt” notice of her hurricane damage claim was a jury question. The Court stated the damage to the insured’s condominium unit or the interior of the wall was not apparent until several years after and the hurricane itself was not necessarily the event that triggered the notice requirement, given the absence of apparent damage to any of the insured’s property following the storm. Moreover, the Court concluded that the legal issues of “prompt” notice and prejudice could not be tried separately...

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A settlement proposal, pursuant to Florida’s Offer of Judgment Statute, that offers to resolve pending claims against additional parties who are neither offerors nor offerees, constitutes a joint proposal that is subject to the apportionment requirement contained in the Statute.

Posted on May 4, 2015

In Audiffred v. Arnold, 2015 Fla. LEXIS 803, Valerie Audiffred and her husband, Robert Kimmons, filed an action against Thomas Arnold that arose from an automobile collision. In the complaint, Audiffred sought damages for her injuries and for vehicle repairs. Kimmons sought damages based upon loss of consortium. On April 29, 2010, a settlement proposal was served upon Arnold, which provided a settlement amount of $17,500 dollars, but did not apportion the settlement amount between Audiffred and Kimmons. Arnold constructively rejected the proposal when he did not respond within thirty days. After a jury trial, a verdict was entered against Arnold in the amount of $26,055.54 for Audiffred’s past medical expenses. However, the jury did not award anything to Audiffred for permanent damages or to Kimmons for the loss of consortium claim. Audiffred and Kimmons then filed a motion that sought an award of costs and attorney’s fees pursuant to section 768.79, Florida Statutes (2014), the offer of judgment statute, and Florida Rule of Civil Procedure 1.442. Arnold moved to strike the settlement proposal on the basis that it was defective because it was filed only on behalf of Audiffred, but offered to settle the claims of both Audiffred and Kimmons. Arnold asserted that unapportioned settlement proposals that resolve the claims of multiple parties are improper, even where one claim is a loss of consortium claim filed by a spouse. After a hearing, the trial court denied the motion to strike and entered an amended final judgment that awarded Audiffred and Kimmons costs and attorney’s fees. Arnold appealed. On appeal, the First District reversed the award of costs and attorney’s fees. The district court concluded that the settlement offer constituted a joint proposal because, when read as a whole, it clearly expressed that Audiffred and Kimmons would dismiss their claims against Arnold with prejudice upon acceptance. The First District held that the proposal was invalid for failure to comply with section 768.79 and rule 1.442 because it did not apportion the settlement amount between Audiffred and Kimmons. The Supreme Court of Florida granted review of Arnold based upon express and direct conflict with decisions that hold a proposal for settlement made by a single offeror to a single offeree which upon acceptance will dismiss the entire action, including claims for or against a party who is neither an offeror nor offeree, is not an undifferentiated “joint proposal” that renders the offer invalid and unenforceable. The Supreme Court held that the proposal for settlement did not comply with section 768.79 and rule 1.442. The complaint in this case involved separate claims by Audiffred and Kimmons.  Although the proposal lists Audiffred as the sole offeror, if accepted by Arnold, the offer would have resolved all pending claims by both Audiffred and Kimmons. Thus, the proposal had the effect of settling claims by two plaintiffs against one defendant. Under the required strict construction of the rule and the statute, this ultimate effect of the offer requires that it be treated as a joint proposal. Accordingly, for the proposal to be valid, it was necessary for the amount offered to be apportioned between Audiffred and Kimmons. The proposal, however, does not describe what portion of the amount offered would be applicable to Audiffred, and what portion would be applicable to Kimmons. As written,...

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The Fifth District Court holds that the destruction of property by an intentionally set fire is encompassed within the term “vandalism and malicious mischief.”

Posted on May 4, 2015

In Botee v. Southern Fid. Ins. Co., 2015 Fla. App. LEXIS 1566, Botee owned a single-family home, which was insured under an Southern Fidelity Insurance Company (“SFIC”) insurance policy. The Policy included all-risk coverage on the structure, Coverage A, subject to certain exclusions. One exclusion, the vacancy exclusion, excluded coverage for losses caused by “vandalism and malicious mischief, theft or attempted theft” if the dwelling had been vacant or unoccupied for more than thirty consecutive days immediately before the loss. The Policy also provided named perils coverage, Coverage C, for personal property. The perils named in Coverage C included “fire or lightning” and “vandalism or malicious mischief.” On October 10, 2012, an intentionally set fire destroyed Botee’s home, which had been vacant for more than thirty consecutive days. Following the fire, Botee filed a claim with SFIC for the loss. SFIC denied Botee’s claim, asserting that the intentionally set fire was an act of “vandalism and malicious mischief” excluded under Coverage A as the property had been vacant for more than thirty consecutive days immediately prior to the loss. Botee then filed a declaratory action, requesting the trial court to determine whether the Policy covered her loss. She later filed a motion for summary judgment, conceding that while the property had been vacant for more than thirty days prior to the fire, the vacancy exclusion in Coverage A applied only to “vandalism and malicious mischief,” not “fire.” The trial court denied Botee’s motion and entered final summary judgment in favor of SFIC, holding that the vacancy exclusion in Coverage A of the Policy was unambiguous and that the term “vandalism and malicious mischief” encompassed arson within its plain and ordinary meaning. Thus, the court concluded that SFIC was correct in denying Botee’s claim. Botee appealed the trial court’s final summary judgment entered in favor of SFIC. The Fifth District Court of Appeals stated the Policy provides all-risk coverage against direct physical loss to the structure under Coverage A, the structure provision, and named perils coverage for direct physical loss to the contents of the structure under Coverage C, a separate personal property provision. There was no reason to consider Coverage C in order to determine the meaning of Coverage A. Each are separate and distinct provisions, though common policy definitions and general conditions and provisions would control both. Although arson could be included within “fire or lightning,” these terms appear only in Coverage C, the personal property provision, not Coverage A, the structure provision. As the loss in the instant case was only to the structure and not to any personal property, it is only necessary to read Coverage A and the general conditions and definitions applicable to the entire Policy. In that context, the Fifth District Court concluded that the plain and ordinary meanings of “vandalism” and “malicious mischief” include “arson.” The Court need not read Coverage C to create an ambiguity when the vacancy exclusion in Coverage A is clear on its face. For these reasons, the Fifth District Court affirmed the trial court’s final summary...

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“Structural damage,” referred to in a Sinkhole Loss Claim, is defined as damage that impairs the structural integrity of the building.

Posted on March 4, 2015

In Hegel v. First Liberty Ins. Corp., 2015 U.S. App. LEXIS 3024, this case involves an insurance-coverage dispute that began in 2011 between Severin and Stephanie Hegel (the Hegels) and The First Liberty Insurance Corporation. The Hegels claim that First Liberty improperly denied their claim for a sinkhole loss. As defined under their homeowner’s insurance policy, a sinkhole loss is “structural damage to the building, including the foundation, caused by sinkhole activity.” First Liberty argues that the damage to the Hegels’ residence does not qualify as “structural damage,” a term that was not defined in either the policy or the version of the Florida sinkhole-insurance statute applicable to their claim. In February 2014, the district court granted summary judgment for the Hegels, finding that “structural damage” meant any “damage to the structure” and awarding them $166,518.17 in damages. First Liberty timely appealed. The Court of Appeals for the Eleventh Circuit found that the district court awarded the Hegels damages for all subsurface and cosmetic repairs based on the parties’ stipulation that there was “physical damage to the Hegels home.” The Court of Appeals agreed with First Liberty that the plain meaning of “structural damage” could not be simply any “damage to the structure.” The Court of Appeals stated that the phrase instead meant damage that impaired the structural integrity of the building. The Court reversed the judgment and remanded the case back to the district court to decide if a genuine dispute of material fact exists regarding how much, if any, structural damage to the Hegels’ house is due to sinkhole...

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Ensuing-loss exceptions are not applicable where the ensuing loss was directly related to an original excluded risk.

Posted on February 23, 2015

In Liberty Mutual Fire Ins. Co. v. Martinez, 2015 Fla. App. LEXIS 1918, Liberty Mutual appeals a final summary judgment entered in favor of its insureds, Nigel and Melissa Martinez. Liberty issued an all-risk insurance policy to the Martinezes insuring their residence and other structures located on their property. During a tropical storm, Nigel Martinez partially emptied his family’s in-ground swimming pool because it was overflowing. The following day, he discovered that the pool had lifted out of the ground. As would be later agreed upon by experts, subsurface water accumulated underneath the pool during the storm, which exerted hydrostatic pressure on the partially emptied pool. This pressure caused the pool shell to lift out of the ground, damaging the shell as well as the pool deck, rock garden, and waterfall. Thereafter, the Martinezes filed a claim with Liberty, which was denied on the ground that the Water Exclusion provision in the policy excluded damage caused by hydrostatic pressure from coverage. That provision provides: We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. (C.) Water Damage (1) Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind; (3) Water below the surface of the ground, including water, which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure. In response, the Martinezes filed suit for breach of contract and argued, that their damage was covered under the ensuing-loss provision in the policy. That provision provides: 2. We do not insure for loss to property described in Coverages A and B caused by any of the following. However, any ensuing loss to property described in Coverages A and B not excluded or excepted in this policy is covered. a. Weather conditions. However, this exclusion only applies if weather conditions contribute in any way with a cause or event excluded in paragraph 1. above to produce the loss; Both sides moved for summary judgment. The trial court found that the direct cause of the Martinezes’ damage was the pool shell coming out of the ground, rather than the hydrostatic pressure. Accordingly, the court found that the damages were ensuing losses covered by the policy, denying Liberty’s motion for summary judgment, and granting the Martinezes’ motion for summary judgment. Liberty Mutual appealed to the Fifth District Court of Appeal of Florida. The issue on appeal was whether the Water Exclusion provision excludes the Martinezes’ losses from coverage. The Court agreed with Liberty that under the policy’s plain language, the damage to the Martinezes’ pool deck, rock garden, and waterfall was not an ensuing loss. Rather, the policy expressly excluded the Martinezes’ loss as it specifically excluded losses that occurred directly or indirectly from subsurface water pressure. In the Court’s view, the damage to the deck, rock garden, and waterfall resulted, directly or indirectly, from subsurface water pressure. Accordingly, the court need not look to the ensuing-loss provision. Therefore, the Court held the insurance policy excluded the loss and reversed the summary final judgment and remand the case for entry of judgment in favor of...

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