Neutral Evaluation Process of Sinkhole Claims Passes Constitutional Muster

In Cruz v. Cooperativa De Seguros Multiples De Puerto Rico (Fla. 2d DCA, December 30, 2011), the Second District Court of Appeal has upheld the neutral evaluation process for sinkhole claims established in section 627.7074, Fla. Stat.  This case is the state’s first appellate decision to construe the statute since its enactment in 2006.  In Cooperativa, the carrier and the insured disagreed over a sinkhole claim and the carrier invoked “neutral evaluation”.  The insureds, however, sued the carrier for breach of contract.  Pursuant to the neutral evaluation statute, the trial court entered an order staying the lawsuit until completion of the evaluation process.  The insureds sought to lift the stay, arguing that the neutral evaluation conference was not completed within 45 days as mandated by statute thereby denying the insureds access to the courts.  The insureds also argued that the stay provision of the statute was a procedural rule and, therefore, was unconstitutional and an infringement on the Florida Supreme Court’s rule-making authority.  

The Second District Court of Appeal held that any delay or inconvenience while the neutral evaluation process is completed does not demonstrate sufficient irreparable harm to invoke the appellate court’s certiorari review.  The court found that neutral evaluation process is intended as an alternative dispute resolution, and is non-binding, so there is no validity to the insureds’ argument of lack of access to courts. The court further held that the stay provision is sufficiently intertwined with substantive provisions so that it is not an unconstitutional violation of separation of powers. 

The court added that even though the statute requires neutral evaluation “shall” be completed with 45 days, the lapse of that period does not bar any statutory or contractual policy right of the carrier to neutral evaluation.  The court reasoned that the evaluation is an informal process in which formal rules of evidence and procedure need not be observed, which suggests that the legislature intended no sanction for failure to strictly adhere to the time period.  The decision is not final until the time expires to file rehearing motion. 

The opinion is attached for review.

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