Koltnow obtains significant appellate victory for insurers in De la Rosa v. FL Peninsula Insurance

Colodny Fass shareholder Amy Koltnow obtained a significant appellate victory for insurers in De la Rosa v. Florida Peninsula Insurance Company, involving a late-reported water back-up claim. The trial court entered summary judgment in favor of the insurer finding as a matter of law that the insureds had failed to overcome the presumption that their failure to timely report their claim had prejudiced the insurer’s investigation. The claim was reported after the plumbing had been repaired and the bathroom had been renovated. Due to the late reporting, the insurance company’s adjuster was unable to determine the cause or the origin or the extent or scope of the damage. The insureds presented affidavits of their public adjuster and engineer in opposition to the insurer’s motion for summary judgment. Both the public adjuster and the engineer attested that the damage was caused by a one-time wastewater backup. The engineer further attested that the evidence “would have been evident upon an inspection by the insurer.”  The affidavits presented by the insureds thus disagreed with the opinion of the insurance company’s adjuster as to whether the cause of loss could be ascertained.

The insureds argued that they presented sufficient counter evidence to overcome the presumption of prejudice rendering it an issue of fact regarding whether the insurer was prejudiced. A prior Fourth District Court case, Stark v. State Farm Ins. Co., held that whether the presumption of prejudice to the insurer has been overcome is “ordinarily . .  . a separate issue of fact.” The Fourth District Court, however, distinguished Stark and held that while there may be a genuine issue of fact concerning causation, the focus is on whether insureds rebutted the presumption of prejudice to the insurance company. Here the engineer’s report bolstered the insurer’s claim of prejudice since the engineer’s report stated that the full extent of the damage could not be ascertained without opening up the slab to evaluate how much damage occurred. The affidavits presented by the insureds did not overcome the presumption of prejudice and the passage of time prejudiced the insurer’s investigation of the extent of the loss.

This case correctly highlights the importance of timely reporting since not only is the insurer often prejudiced in determining the cause of the loss, but the insurer may also be forever foreclosed from investigating the extent of the damage particularly in claims reported after repairs have been completed.

Read the court’s opinion here. This opinion is not final until disposition of timely filed motion for rehearing.