Third District Court of Appeal Denies Contractual Appraisal Process Due to Carrier’s Failure to Provide Insureds with Notice of Right to Mediation
May 31, 2011
On May 25, 2011, the Florida Third District Court of Appeal issued an opinion in Universal Property and Casualty Insurance Company v. Colosimo, — So. 3d — 2011 WL 2031332 (Fla. 3d DCA 2011) (Third District Case No. 3D11-180), strictly construing the requirements of section 627.7015 of the Florida Statues, requiring insurers to notify first party claimants of their right to participate in mediation. The Third District affirmed the lower court’s denial of Universal Property and Casualty Insurance Company’s (“UPCIC”) motion to stay the Colosimo’s lawsuit-filed during the contractual appraisal process-permitting the insureds to move forward with their claims for breach of contract and breach of the implied covenant of good faith and fair dealing.
The court rejected UPCIC’s arguments that compliance with § 627.7015, Fla. Stat. was necessary, as the insureds had knowledge of the mediation process due to a contemporaneously filed claim and because their insurance policy contained language apprising the insureds of their right to mediation. The court also rejected UPCIC’s argument that the insureds’ participation in appraisal bound them to complete the process. It appears from this case that a failure to strictly comply with the mediation notice requirements of § 627.7015, Fla. Stat., may effectively eviscerate appraisal provisions in carriers’ insurance policies.
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