MARCH 2016

It’s the first anniversary of Florida Insurance Matters! Thank you for reading and we welcome your feedback!

Florida Insurance Matters is a monthly update on Florida insurance-related legal developments by the Colodny Fass Insurance Litigation Practice, recognized as the 2014 Insurance Litigation Department of the Year in South Florida by the Daily Business Review.

About the Author

Amy L. Koltnow, a Colodny Fass Shareholder, focuses her practice on representing insurance companies in complex insurance litigation and counseling insurers on claims resolution. She has represented insurers in connection with property damage and first-party coverage litigation, claims of “bad faith,” high-risk exposures, class actions and multi-district litigation. For more information about Ms. Koltnow, click here.

Shifting Burdens When Multiple Perils Cause Damage

The Second District reversed a jury verdict in favor of insureds in a disputed sinkhole loss because the trial court gave an improper and confusing instruction regarding the parties’ respective burdens of proof. The plaintiffs presented evidence of more than one cause of property damage – sinkhole activity and problematic soil in a reclaimed mine zone. The trial court instructed the jury that the insurer was required to prove all of the damage was caused by an excluded peril. The appellate court reversed, remanded the case for a new trial and instructed the trial court to apply the efficient proximate cause doctrine-that is, which peril was the most substantial factor in the loss.

Citizens Prop. Ins. Corp. v. Salkey (Fla. 2d DCA, Feb. 26, 2016)

• The holding is only applicable in the 2nd DCA, which follows the efficient proximate cause doctrine. Florida policyholders and insurers alike are awaiting the outcome of the pending Florida Supreme Court case of Sebo v. American Home Assurance Co., which will determine whether Florida will follow the concurrent cause doctrine (affording coverage when a loss is caused by both a covered peril and excluded peril) or the efficient proximate cause doctrine (basing coverage on which peril is the most substantial or responsible factor in the loss).
• The dissent challenges whether sinkhole coverage by endorsement should be treated as a type of all-risk coverage, argues that it is a named peril coverage and further suggests the Legislature needs to try “one more time” to obtain an objective approach to sinkhole coverage.

Attorney Billing Records of Insurance Company Relevant to Plaintiff’s Fee Award

In highly contested “bad faith” litigation between an insured and her UM carrier, and after two jury verdicts in the insured’s favor, the parties began litigating the insured’s attorney’s fee award. The insured sought the billing records of GEICO’s counsel, to which GEICO objected. The dispute found its way to the Florida Supreme Court, which held the hours expended by counsel for the insurance company in a contested claim for attorney’s fees is relevant to the issue of the reasonableness of time expended by counsel for the plaintiff, and discovery of such information, where disputed, falls within the sound decision of the trial court.

Paton v. GEICO (Fla. Sup. Court, March 24, 2016)

• The court’s message is clear; in insurance disputes, defense counsel’s billing records are relevant and subject to discovery.
• Be mindful of the risks of a hard-fought battle and gauge which issues should be contested, and when it may be best to lay down the gauntlet after defeat.

Payment of Appraisal Award Not Automatic Confession of Judgment

After granting a rehearing, the Fourth DCA issued a revised opinion holding that the insurer’s obligation to provide a policyholder with statutory notice of mediation does not ripen until the insurer is on notice that there is a dispute relating to a material issue of fact. The court also held that payment of an appraisal award while litigation is pending is not automatically a confession of judgment warranting an award of attorney’s fees. The entitlement to fees turns on whether the insured was forced to file suit to resolve the dispute.

State Farm v. Lime Bay (Fla. 4th DCA, March 23, 2016)

• The issue of entitlement to fees may turn into an evidentiary dispute which can up the ante.
• This case reinforces the argument of an insured’s breach of the policy by filing suit after appraisal is invoked.

AOB Required to Submit to Appraisal

A water mitigation company that filed suit under an assignment of benefits from the insured was ordered to proceed with appraisal of the insurance loss. The court did not compel the insured to participate in the appraisal process, but left the issue open for further proceedings.

Certified Priority Restoration v. State Farm (Fla. 4th DCA, March 26, 2016)

Maria Abate and Matt Scarfone Speak on Fraudulent Roof Damage Claims at Insurance Summit

Colodny Fass attorneys Maria Abate and Matt Scarfone participated in a panel discussion at the annual Florida Insurance Market Summit on the rise of fraudulent roof damage claims in Florida. The presentation, which was well-attended by various industry professionals, focused on hot button issues including manufactured damage, questionable solicitation and advertising practices, and the growing use of assignments of benefits.

Contact Maria or Matt for more information, or to schedule a personalized seminar.

In addition, we are certified by the Florida Division of Insurance Agent and Agency Services to offer and instruct certain Continuing Education courses for adjusters.

For over 40 years, Colodny Fass has represented insurers in complex and high-risk litigation including class actions, bad faith, insurance fraud, multi-jurisdictional cases, coverage matters, and fact-intensive, multi-party lawsuits. The Daily Business Review has recognized Colodny Fass as having the 2014 Insurance Litigation Department of the Year in South Florida. About Amy L. Koltnow Amy L. Koltnow, a Colodny Fass Shareholder, focuses her practice on insurance disputes from trial through appeals. She has represented insurance companies in federal and state courts, as well as in mediation and administrative forums. Ms. Koltnow oversees complex litigation matters and has successfully defended numerous class actions and insurance bad faith cases. She is a member of the Claims and Litigation Management Alliance, a national, invitation-only organization committed to furthering high standards of litigation and claims management in pursuit of client defense.

To view Ms. Koltnow’s complete professional biography, click here. Contact Amy at akoltnow@colodnyfass.com or (954) 492-4010.