JAMES HOENSTINE AND KATHI HOENSTINE, APPELLANTS,
v.
STATE FARM FIRE AND CASUALTY COMPANY, ETC., APPELLEE
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The Fifth District Court of Appeal reversed a trial court order that treated an insurance policy appraisal clause as an informal procedure rather than formal arbitration. The court held that the appraisal clause constitutes a binding arbitration agreement governed by Florida's Arbitration Code.
The appraisal clause in the insurance policy is a binding arbitration agreement governed by the Florida Arbitration Code. The procedures outlined in the code therefore apply to the dispute resolution process.
[1] An insurance policy's appraisal clause, which requires parties to select appraisers and an umpire to determine the amount of loss, constitutes an arbitration agreement.
[2] The Florida Arbitration Code applies to insurance appraisal clauses that function as arbitration agreements.
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Join FLexlaw to unlock all legal intelligence“If you and we fail to agree on the amount of loss, either one can demand that the amount of the loss be set by appraisal.”
This language from the appraisal clause demonstrates the binding nature of the dispute resolution mechanism
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Join FLexlaw to unlock all legal intelligenceThe Hoenstines and State Farm Fire and Casualty Company disagreed about the value of property damaged by a tornado. State Farm filed a motion to abate…
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PETERSON, J.
The appellants and their insurance company were not able to agree on the values of property damaged by a tornado and the appellants filed an action for breach of the contract of insurance.
State Farm Fire and Casualty Company filed a motion to abate based upon an appraisal clause in the policy:
6. APPRAISAL. If you and we fail to agree on the amount of loss, either one can demand that the amount of the loss be set by appraisal. If either makes a written demand for appraisal, each shall select a competent, independent appraiser. Each shall notify the other of the appraiser’s identity within twenty (20) days of receipt of the written demand. The two (2) appraisers shall then select a competent, impartial umpire. If the two (2) appraisers are unable to agree upon an umpire within fifteen (15) days, you or we can ask a judge of a court of record in the State where the residence premises is located to select an umpire. The appraisers shall then set the amount of the loss. If the appraisers fails to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two (2) of these three (3) shall set the amount of the loss. Each appraiser shall be paid by the party selecting that appraiser. Other expenses of the appraisal and the compensation of the umpire shall be paid equally by you and us.
This appeal arises from the trial court’s order determining that the appraisal procedure set forth above contemplates an informal procedure rather than a formal procedure governed by the Florida Arbitration Code, sections 682.01, et seq., Florida Statutes (1997). In Florida Farm Bureau Casualty Insurance Co. v. Sheaffer, 687 So. 2d 1331 (Fla. 1st DCA 1997), rev. denied, 697 So. 2d 510 (Fla.1997), the court determined that an appraisal clause nearly identical to the clause in the instant case was an arbitration clause and that the Florida Arbitration Code applied. See also, State Farm Fire & Cas. Co. v. Middleton, 648 So. 2d 1200 (Fla. 3d DCA 1995); Preferred Mutual Ins. Co. v. Martinez, 643 So. 2d 1101 (Fla. 3d DCA 1994); Intracoastal Ventures Corp. v. Safeco Ins. Co. of America, 540 So. 2d 162 (Fla. 4th DCA 1989), in which appraisal clauses similar to the clause in the instant case are interpreted and treated as binding arbitration agreements. We likewise find that the appraisal clause in the instant case is an arbitration clause and that the procedures set forth in the arbitration code apply. Accordingly, we vacate the trial court’s order and remand to the trial court for further proceedings.
ORDER VACATED; REMANDED.
DAUKSCH and W. SHARP, JJ„ concur.
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Allstate Ins. Co. v. Suarez, 833 So. 2d 762 (Fla. 2002)…PER CURIAM. We have for review the decision in Allstate Insurance Co. v. Suarez, 786 So. 2d 645 (Fla. 3d DCA 2001), which certified conflict with the decision in Hoenstine v. State Farm Fire & Casualty Co., 736 So. 2d 761 (Fla. 5th DCA 1999), and Florida Farm Bureau Casualty Insurance Co. v. Sheaffer, 687 So. 2d 1331 (Fla. 1st DCA 1997). We have jurisdiction. See art. V, § 3(b)(4), Fla. Const. We approve the Third District’s decision in this case for the reasons expl…1 / 2
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Allstate Ins. Co. v. Martinez, 790 So. 2d 1151 (Fla. 3d DCA 2001)…rt compels appraisal. United States Fid. & Guar. Co. v. Romay, 744 So. 2d 467 (Fla. 3d DCA 1999). The compliance issue was still raging as of February 16, 2000. R. 145-46. . We note and certify conflict with Hoenstine v. State Farm Fire & Cas. Co., 736 So. 2d 761 (Fla. 5th DCA 1999), and Florida Farm Bureau Cas. Ins. Co. v. Sheaffer, 687 So. 2d 1331 (Fla. 1st DCA), rev. denied, 697 So. 2d 510 (Fla. 1997). .The Allstate policy gave Allstate sixty days after the date of the appraisal award within which to mak…
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Allstate Ins. Co. v. Suarez, 786 So. 2d 645 (Fla. 3d DCA 2001)…parties when entering into the agreement. Therefore, the trial court was correct in upholding the neutral umpire’s decision to conduct the appraisal in an informal manner. We note and certify conflict with Hoenstine v. State Farm Fire and Cas. Co., 736 So. 2d 761 (Fla. 5th DCA 1999), and Florida Farm Bureau Cas. Ins. Co. v. Sheaffer, 687 So. 2d 1331 (Fla. 1st DCA 1997). We find no merit in the other issues raised. Affirmed.…
Previewing 3 of 5 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- State Farm Fire & Cas. Co. & Richard Nerndt v. Middleton, 648 So. 2d 1200 (Fla. 3d DCA 1995)
- Intracoastal Ventures Corp. v. Safeco Ins. Co. of Am., 540 So. 2d 162 (Fla. 4th DCA 1989)
- Preferred Mut. Ins. Co. v. Martinez, 643 So. 2d 1101 (Fla. 3d DCA 1994)
- Fla. Farm Bureau Cas. Ins. Co. v. Sheaffer, 687 So. 2d 1331 (Fla. 1st DCA 1997)