Plus, Security First wins attorney fees
Florida’s 1st DCA finds that a breach of contract must exist at filing, homeowners find footing in an appeal for failure to provide prompt notice to their insurance company, and Security First wins an appeal to gain attorney fees from a policyholder. It’s all in this week’s Legal Briefs.
Bailetti v. Universal Property: Florida’s First District Court of Appeals (1st DCA) sided against policyholders in a recent case, deciding that a breach of contract must exist at filing, not years later during litigation. When Hurricane Sally damaged Bailetti’s Pensacola home, Universal Property & Casualty Insurance Company inspected the home and paid the policyholder an actual cash value (ACV) for the damages incurred, all in accordance with the policy’s loss-settlement provision. Four months later, Bailetti sued before making any of the repairs, wanting to recover depreciation in the time elapsed, and without providing a competing ACV estimate. When the trial got underway years later, Bailetti finally produced expert valuation for the damages, which the 1st DCA shot down, holding that Bailetti “failed to show that as of June 2021, when they filed their breach of contract action, Universal had breached the insurance policy.” The insurance company’s initial duty is simply to pay the ACV for the loss, then the burden shifts to the insured, who must prove the ACV was insufficient in a timely manner, which Bailetti did not. Litigation cannot retroactively manufacture a breach, especially years after the loss.
An Appeal for Prompt Notice: On September 1, 2019, the Wilsons’ toilets and bathtubs overflowed which caused damage throughout their home. After a few weeks, they reported the problem to an attorney who hired an investigator to document the water damage. Some 58 days later on October 29, 2019 the Wilsons filed a claim with Universal. Three days after that, Universal had a field adjuster inspect the damages, and tendered a $9,286.43 check to the homeowners, which accounted for the $13,972.64 in line-item damages with the deductible applied. The Wilsons sued Universal ten months later for breach of contract, stating they were unwilling to cover costs for tearing out parts of the property to determine the cause of the water damage, with tear-out and replacement costs to the tune of $77,363.98. The resulting trial hinged not on the large difference in damage value, but on Universal claiming the lack of prompt notice had prejudiced the claim investigation – it did not know if the property’s condition or level of water damage had at all changed in the elapsed 58 days between incident and notice. While a jury initially ruled for Universal, the Fourth District Court of Appeal has since ruled for a retrial, citing the lack of evidence proving late notice prejudiced the investigation. Universal’s field adjuster did not request any further documentation or send a plumber out to the property; there was no investigation to be prejudiced – they simply wrote a check.
Attorney Fees Awarded: In Florida’s Sixth District Court of Appeal, Security First Insurance recently got a win with an appeal ruling in favor of the company’s entitlement to attorney fees in Security First Ins v. Cincotta. The Cincottas purchased home insurance from Security First through Cochran Insurance Inc., an insurance agency, back in 2014. When they reported a fire loss to their home, Security First investigated the claim and found that the Cincottas failed to disclose a 2013 fire loss and subsequent non-renewal on their application – thereby voiding their coverage for the loss. The Cincottas then sued both Security First and Cochran, and a Proposal for Settlement (PFS) was issued by Security First, which was not accepted. The trial court found language in the PFS to be ambiguous regarding the parties affected by claim dismissals, that is, the Cincottas worried that accepting the PFS may have rendered them unable to pursue claims against Cochran. As such, the trial court found the PFS to be unenforceable, failing to comply with section 768.79, Florida Statutes, and Florida Rule of Civil Procedure Rule 1.442. The court then denied Security First’s motion for entitlement to attorney fees. However, the 6th DCA recently reversed the decision, finding no mention of Cochran in the PFS and that the settlement was “sufficiently clear and free of ambiguity.” The trial court has now been tasked with determining a reasonable amount of attorney fees to be awarded to Security First.
LMA Newsletter of 1-20-26
