JANUARY 2016

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 avoidance and 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.

Third District Court of Appeal Upholds 1.5 Attorney Fee Multiplier in Fire Damage Case

The Third District appellate court recently upheld the application of a 1.5 fee multiplier in a first-party property damage claim by a successful insured resulting in a fee award of $655,852. The “highly contentious” case arose from a fire loss with defenses including arson, fraud, concealment in the policy application, false prices for items claimed to be lost, as well as arguments over whether there was a “total loss” and the insured’s ownership interest in the home. The parties took 27 depositions from Jacksonville to Key West, and the trial court held four summary judgment hearings. On the eve of trial, the carrier agreed to pay full policy limits, plus interest. From the tenor of both the trial court’s final judgment for attorney’s fees and costs and the appellate court’s opinion (which refer to the carrier as “stalling”, and asserting “uncredible” and “unsupportable” positions), this appears to be an example of a case that required critical legal assessments.

Citizens Property Ins. Corp. v. Pulloquinga ­­­(2015).

Click here to read the case.

• Critical and frequent assessments of the factual disputes and litigation risks in large-loss/high-risk cases are essential.
• Understand and appreciate the difference between “cheerleading” and “counseling.” Require defense counsel to advise you of the risks early on in the game and throughout the litigation, so you can make informed decisions concerning the management of the lawsuit.

Forfeiture of Benefits Based on Failure to Attend EUO Affirmed by Fourth District Court of Appeal

For decades, defense counsel have relied on Goldman v. State Farm Fire Gen. Ins. Co. when defending a denial of benefits in a property insurance claim because the insured failed to attend an EUO. Goldman held the insured’s failure to submit to an EUO prior to filing a lawsuit was a material breach of the insurance contract which relieved the carrier of its obligation to pay under the policy. And, since the obligation to submit to an EUO is a condition precedent to suit, a showing of prejudice is not required. In 2014, the legal landscape changed in the context of automobile coverage when the Florida Supreme Court held in State Farm v. Curran that an insured’s failure to attend a compulsory medical exam is a condition subsequent and does not result in a forfeiture of UM benefits unless the carrier pleads and proves prejudice. Some believed the Curran case could lay the foundation for future arguments that an insured is not automatically barred from coverage for not complying with a post-loss obligation absent proof of prejudice to the carrier. The Fourth DCA, however, has remained steadfast in upholding Goldman and recently affirmed a forfeiture of benefits based on the insured’s failure to attend an EUO.

Studio Imports, Ltd., Inc. v. Landmark American Ins. Co., (2015)

Click here to read the case.

• This is an issue to keep watching as the dissent argues clarification from the Florida Supreme Court is needed.
• Be mindful of the purpose of an EUO. The goal is to obtain facts that assist the insurer in making a coverage decision, to protect against false claims and to appropriately resolve legitimate claims.

Colodny Fass Obtains Favorable Judgment Based on Wind-Driven Rain and Other Exclusions

Colodny Fass recently obtained a favorable Final Judgment in a first-party property insurance case involving a roof leak. The carrier denied coverage for the loss because the leak had been ongoing for an extended period of time and was caused by faulty construction and long-term wear and tear. The policy also contained a “wind-driven rain” provision which precluded coverage for damage caused by rain unless the rain (or other covered peril) first created an opening in the roof. Plaintiffs argued the damage was “hidden and unknown” and, therefore, the policy afforded coverage for the loss, or at least rendered coverage ambiguous. Senior Associate Matthew Scarfone successfully argued at the summary judgment hearing that the policy must be read as a whole, and even if one exception was inapplicable, other exclusions applied to preclude coverage.

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.