Florida Court Addresses Declaratory Judgment in Insurance Dispute

An appeals court issued its opinion in a Florida insurance dispute between a homeowner and an insurance company. According to the opinion, a homeowner entered into a contract with an insurance company where they agreed that in exchange for a lower premium, the insurance company would have the option to repair any damage with its preferred contractor. The current claim arose after the homeowner’s home experienced water damage after Hurricane Irma. Immediately after the damage, the homeowner contacted a company to perform mitigation repairs. In addition, he contacted a public adjustor company to appraise the value of damage and assist in settling any claims with the insurance company. About a month after the damage, the homeowner contacted the insurance company.

The insurance company acknowledged receipt of the claim and sent its inspector to evaluate the premises. The company’s inspector valued the loss at around $13,000, and the company chose to repair the damage. Pursuant to their policy with the homeowner, the company notified him of their election, and required the homeowner to file a sworn proof of loss within 60 days. After the period lapsed, the company filed an action for declaratory judgment and a breach of loss. The homeowner moved to dismiss the case, and in the alternative, compel appraisal. At trial, the court dismissed the insurance company’s complaint. The insurance company argued that the homeowner’s failure to provide a sworn proof of loss amounts to a contract breach. As such, they argued that the court should find that the breach justified a loss of coverage.

Under Florida law, a party moving for a declaratory judgment must prove that there is a good faith dispute between the parties; there is a question regarding the existence of rights or status, there is a dispute regarding a party’s rights, and there is an actual need for the judgment. When a petition for declaratory relief meets these factors, the court should not dismiss the matter for failure to state a cause of action.

In this case, the issue is whether the policy’s language contravenes the homeowner’s requirement to submit a sworn proof of loss when the company evokes their right to repair. Here, the court found that the parties are in a bona fide disagreement regarding each parties’ rights and obligations. The homeowner argued the merits of the case; however, the court does not have jurisdiction to hear the merits of the case in these instances. Instead, the court can only determine whether the moving party is entitled to a declaration of rights. Ultimately, the court reversed the lower court’s finding and remanded the case for further proceedings.

Have You Been Involved in a Dispute with Your Insurance Company?

If you believe that your insurance provider has breached the terms of a policy, you should contact the injury attorneys at Friedman Rodman Frank & Estrada, P.A. The South Florida insurance dispute attorneys at our law firm have nearly 100 years of combined experience successfully representing clients in their claims against negligent individuals and companies. Additionally, we have advocated on behalf of our clients against insurance companies engaging in bad faith practices. Through our representation, our clients have recovered substantial amounts of compensation for their losses. Contact our office at 877-448-8585 to schedule a free initial consultation with an attorney at our firm.

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