PREFERRED MUTUAL INSURANCE COMPANY, A FOREIGN INSURANCE COMPANY AUTHORIZED TO DO BUSINESS IN THE STATE OF FLORIDA, APPELLANT,
v.
MANUEL MARTINEZ AND CLARA MARTINEZ, HIS WIFE, APPELLEES
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Preferred Mutual Insurance Company appeals the trial court's denial of its motion to compel appraisal following a hurricane damage claim dispute with homeowners. The Third District Court of Appeal reversed, holding that appraisal clauses in insurance policies function as arbitration provisions that are conditions precedent to litigation and must be enforced when properly invoked.
The appraisal clause in the insurance policy is an arbitration provision and a condition precedent to recovery. Preferred Mutual did not waive its right to appraisal by negotiating before formally requesting it. The motion to compel appraisal must be granted and the case remanded for entry of an order compelling appraisal.
[1] An appraisal provision in an insurance policy is construed as an arbitration provision.
[2] Appraisal provisions in insurance policies are conditions precedent to recovery under the policy.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“As with arbitration clauses, appraisal provisions are deemed to be conditions precedent to recovery under the insurance policies.”
Establishes the legal status of appraisal clauses as enforceable conditions precedent similar to arbitration agreements
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Join FLexlaw to unlock all legal intelligencePreferred Mutual issued a homeowners' insurance policy to Manuel and Clara Martinez. After hurricane Andrew damaged their home, Preferred Mutual issue…
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BASKIN, Judge.
Preferred Mutual Insurance Company [“Preferred Mutual”] appeals an order denying its motion to compel appraisal. We reverse and remand with instructions.
Preferred Mutual issued a homeowners’ insurance policy to Manuel and Clara Martinez [“insureds”]. The insureds’ home sustained damage during hurricane Andrew. The insureds filed a claim for benefits with Preferred Mutual. Preferred Mutual issued the Martinezes a check for $1,979.43; the insureds believed the amount to be insufficient. After further negotiations, Preferred Mutual issued another check for $8,620.06. The insureds presented Preferred Mutual with two estimates for the repairs required on the home in amounts exceeding $49,-000.00. The insureds filed a lawsuit against Preferred Mutual asserting that the insurance company unreasonably failed to offer them the full replacement value of their home.
Preferred Mutual filed a motion to dismiss and compel appraisal, asserting the policy provision which states that in the event the parties cannot agree on the appropriate compensation either party may file a written demand for appraisal.1 The trial court denied the motion; this appeal ensued.
The sole issue on appeal is whether the appraisal clause in the insureds’ homeowners’ policy should be construed as an arbitration clause. Several courts have construed appraisal provisions in insurance policies and have treated these provisions as arbitration provisions. American Reliance Ins. Co. v. Village Homes at Country Walk, 632 So. 2d 106 (Fla. 3d DCA 1994); Intracoastal Ventures Corp. v. Safeco Ins. Co. of Am., 540 So. 2d 162 (Fla. 4th DCA 1989); U.S. Fire Ins. Co. v. Franko, 443 So. 2d 170 (Fla. 1st DCA 1983); see State Farm Fire & Casualty Co. v. Feminine Fashions, Inc., 509 So. 2d 376 (Fla. 3d DCA 1987). As with arbitration clauses, appraisal provisions are deemed to be conditions precedent to recovery under the insurance policies. Trans-america Ins. Co. v. Weed, 420 So. 2d 370 (Fla. 1st DCA 1982). Moreover, contrary to the insureds’ argument that Preferred Mutual has forfeited its right to invoke the appraisal clause because it failed to request appraisal during the lengthy negotiations, the record demonstrates that Preferred Mutual has not waived its right to appraisal: Preferred Mutual has not acted inconsistently with that right at any point in these proceedings. U.S. Fire Ins. Co., 443 So. 2d at 172; Balboa Ins. Co. v. W.G. Mills, Inc., 403 So. 2d 1149 (Fla. 2d DCA 1981); see Coral 97 Assoc., Ltd. v. Chino Elec., Inc., 501 So. 2d 69 (Fla. 3d DCA 1987). In this ease, Preferred Mutual properly moved to compel appraisal (arbitration) in response to the insureds’ complaint. The trial court erred in denying that motion.
Motions to compel arbitration should be granted whenever the parties have agreed to arbitration and the court entertains no doubts that such an agreement was made. Intracoastal Ventures Corp., 540 So. 2d at 164. For these reasons we reverse the order denying the motion to compel appraisal, and remand for entry of an order compelling appraisal.
Reversed and remanded.
. Paragraph 12 of the Preferred Mutual policy provides:
12. Appraisal — If you and we do not agree on the amount of the loss, the actual cash value of the property or the cost to repair or replace the property, either party may demand that these amounts be determined by appraisal.
If either party makes a written demand for appraisal, each will select a competent independent appraiser and notify the other of the appraiser's identity within 20 days after the receipt of the written demand. The two appraisers will select a competent, impartial umpire. If the two appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the property is located to select an umpire.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By (26 total)
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State Farm Fire & Cas. Co. & Richard Nerndt v. Middleton, 648 So. 2d 1200 (Fla. 3d DCA 1995)…established. See New Amsterdam Casualty Co. v. J.H. Blackshear, Inc., 116 Fla. 289, 291, 156 So. 695, 696 (1934) (appraisal clauses “are valid and are binding upon the parties if they,are appropriately invoked”); Preferred Mut. Ins. Co. v. Martinez, 643 So. 2d 1101, 1102 (Fla. 3d DCA 1994) (“courts have construed appraisal provisions in insurance policies and have treated these provisions as arbitration provisions”); American Reliance Ins. Co. v. Village Homes at Country Walk, 632 So. 2d 106, 107 (Fla. 3d DCA…1 / 2
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Fla. Ins. Guar. Ass'n, Inc. v. Jorge and Helena Castilla, 18 So. 3d 703 (Fla. 4th DCA 2009)…ht by participating in the litigation. Where the insurance company raised its right to an appraisal in its first pleading within thirty days of the filing of the complaint, it had made a timely demand. In Preferred Mutual Insurance Co. v. Martinez, 643 So. 2d 1101 (Fla. 3d DCA 1994), after the insureds and them insurance company could not agree on the amount of their insured loss, the insureds filed suit. The insurer filed a motion to dismiss and compel appraisal which the trial court denied. In reversing, th…
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Fla. Farm Bureau Cas. Ins. Co. v. Sheaffer, 687 So. 2d 1331 (Fla. 1st DCA 1997)…ida courts have interpreted appraisal provisions similar to the instant provision as constituting binding arbitration agreements. State Farm Fire & Cas. Co. v. Middleton, 648 So. 2d 1200, 1202 (Fla. 3d DCA 1995); Preferred Mut. Ins. Co. v. Martinez, 643 So. 2d 1101 (Fla. 3d DCA 1994); American Reliance Ins. Co. v. Village Homes at Country Walk, 632 So. 2d 106 (Fla. 3d DCA 1994); Intracoastal Ventures Corp. v. Safeco Ins. Co. of Am., 540 So. 2d 162 (Fla. 4th DCA 1989); U.S. Fire Ins. Co. v. Franko, 443 So. 2d 1…1 / 2
Previewing 3 of 26 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Am. Reliance Ins. Co. v. The Vill. Homes AT Country Walk, 632 So. 2d 106 (Fla. 3d DCA 1994)
- Intracoastal Ventures Corp. v. Safeco Ins. Co. of Am., 540 So. 2d 162 (Fla. 4th DCA 1989)
- U.S. Fire Ins. Co. v. Franko, 443 So. 2d 170 (Fla. 1st DCA 1983)
- Coral 97 Assocs., Ltd. v. Chino Elec., Inc., 501 So. 2d 69 (Fla. 3d DCA 1987)
- Balboa Ins. Co. v. W. G. Mills, Inc., 403 So. 2d 1149 (Fla. 2d DCA 1981)
- Transamerica Ins. Co. v. Weed, 420 So. 2d 370 (Fla. 1st DCA 1982)
- Willey v. State, 403 So. 2d 1149 (Fla. 1st DCA 1981)
- N.S. v. State, 509 So. 2d 376 (Fla. 3d DCA 1987)
- State Farm Fire & Cas. Co. v. Feminine Fashions, Inc., 509 So. 2d 376 (Fla. 3d DCA 1987)