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SEPTEMBER 14, 2018

The firm successfully represented State Farm in a sinkhole trial in Jacksonville, Florida. The policyholders’ attorney, Mark Nation, argued that State Farm breached the insurance policy by failing to pay a covered claim for sinkhole loss. Plaintiffs’ expert, Sonny Gulati, testified that there was clear evidence of sinkhole activity, as represented by testing that showed zones of little or no soil resistance under the property.

State Farm’s case included Professional Geologist Dr. Anthony Randazzo, who testified that the soft zones under the house were part of the region’s geological make up and proximity to the St. John’s River. Geotechnical Engineer Joakim Nordqvist testified that the near surface soils were uniform and there was no evidence of any disruption at the surface. Structural Engineer Lennon Jordan identified each aspect of the claimed damage and explained how it was related to age and workmanship, not abnormal settlement.

Judge Tyrie Boyer received the jury’s verdict Friday afternoon. The jury concluded that the policyholders met their burden of establishing a loss during the policy period. However, the jury also concluded that State Farm met its burden of establishing that the claimed damage was not caused by sinkhole activity, but was instead caused by things excluded under the policy.

This case was vigorously litigated over several years, which included a neutral evaluation. Although the neutral evaluator agreed that there was not a sinkhole loss, the policyholders rejected that conclusion and opted to try the case. The jury’s verdict will not be appealed, and the Court entered Final Judgment for State Farm.

Although this trial involved a sinkhole claim, many aspects of it were common to virtually any first party property trial. Please let me know if I can get you copies of any court filings or further information concerning this result.

AUGUST 31, 2018

With the advent of Hurricane Irma, many carriers are placing disputes into appraisal. Although appraisals can go awry, they are less expensive, faster, and more final than litigation.

In Florida, with our fee statute, there is significant incentive for policyholders’ attorneys to oppose appraisal. Consequently, we often see arguments that matters are not appropriate for appraisal, because they involve coverage disputes, or because various things constitute a waiver of the ability to appraise.

In Levi Holding v. Scottsdale, the United States District Court for the Middle District of Florida considered these arguments and ruled in favor of Scottsdale that the matter should be appraised, and stayed the pending litigation. The policyholder’s attorney argued that the dispute before the parties involved coverage, not an appraisable issue. The Court disagreed. The loss came about as a result of Hurricane Irma, a covered cause. The dispute essentially concerned the scope of the damage caused by Hurricane Irma. Consequently, the dispute was appraisable.

The policyholder’s attorney also argued that Scottsdale waived appraisal because the carrier filed an answer and responded to discovery. The Court rejected that argument, concluding that Scottsdale’s actions were defensive and that the company timely and effectively asked the Court to require appraisal and stay the litigation.

As we approach the anniversary of Hurricane Irma, litigated insurance claims resulting from the storm continue to increase. Carriers should give consideration to appraisal as a means of resolving the dispute where appropriate.

Please contact me if you would like a copy of the order or any of the filings.

FEBRUARY 19, 2018

Orange County Judge Martha Adams granted GeoVera Specialty Insurance Company’s Motion for Final Summary Judgment, and entered an order dismissing Plaintiff RCO Contractors, Inc.’s (as assignee of insureds) Complaint with prejudice in a first-party breach of contract case arising from an alleged water loss. GeoVera sought summary judgment that the subject insurance policy was void, on the insureds’ failure to disclose, in their application for insurance, a foreclosure action filed against them within the five-year period preceding their application. GeoVera’s motion was supported by Florida case law and the insureds’ application for insurance. The Court record in the foreclosure action, recorded statements obtained from the insureds, GeoVera’s underwriting guidelines (which identified involvement in a foreclosure proceeding within the applicable timeframe as an “ineligible risk”), and an affidavit from a GeoVera insurance underwriter, demonstrated that GeoVera would not have issued the policy of insurance if it had known of the insureds’ involvement in the foreclosure proceeding.

Judge Adams ruled that the insureds made a material misrepresentation in their application for insurance, and GeoVera relied upon the misrepresentation by way of issuing the policy. Judge Adams held the subject policy was void, rendering the insureds’ assignment of benefits under the policy to RCO Contractors, Inc a nullity.

Sherry Kazaleh was GeoVera’s Liability Claim Representative for this matter, and Attorney Julia Young of Rock Law Group presented and argued GeoVera’s Motion for Final Summary Judgment, a copy of which is available. The order is attached for your reference. Please contact us for further details.

DECEMBER 19, 2017

Judge Sherri Collins, of Palm Beach County, granted GeoVera Specialty Insurance Company’s Motion to Dismiss Plaintiff’s complaint, with prejudice. GeoVera made a written demand for appraisal after Plaintiff filed her suit, but before GeoVera was served with the suit. The parties entered into an agreed order abating the action and compelling appraisal. Once the appraisal was concluded and the appraisal award was paid, GeoVera filed a motion to dismiss the suit with prejudice. Prior to a hearing on the motion to dismiss, Plaintiff filed a Motion for Determination of Entitlement to Attorney’s Fees and Court Costs.

Judge Collins heard arguments on GeoVera’s Motion to Dismiss, and declined to hear arguments on Plaintiff’s Motion for fees and costs, as it had not been noticed for hearing. Plaintiff’s counsel argued that GeoVera’s Motion to Dismiss would need to be denied pending a ruling on her motion regarding entitlement to fees and costs.

Judge Collins subsequently handed down her Order granting GeoVera’s Motion to Dismiss. By way of her Order, Judge Collins wrote, “Defendant did not wrongfully withhold insurance benefits such that Plaintiff/Insured needed to file a law suit to compel Defendant/Insurer to comply with its obligations under the contract.”

Attorney Julia Young of Rock Law Group represented GeoVera in this matter. Please let me know if you would like copies of any court filings concerning this matter or otherwise. Best regards for the new year!