PEOPLE'S TRUST INSURANCE COMPANY,

v.

PEDRO R. RAMOS SANTOS, ET AL.,

Third District Court of Appeal State of Florida

Opinion filed May¹², 2021. Not final until disposition of timely filed motion for rehearing.

________________

No. 3D19-1282 Lower Tribunal No. 18-14139 ________________

People's Trust Insurance Company, Appellant,

vs.

Pedro R. Ramos Santos, et al., Appellees.

An Appeal from the Circuit Court for Miami-Dade County, Spencer Eig, Judge.

Cole, Scott & Kissane, P.A., and Mark D. Tinker (Tampa), for appellant.

Shahady & Wurtenberger, P.A., and John J. Shahady (Fort Lauderdale); Duboff Law Firm, and Kenneth R. Duboff, for appellees.

Before SCALES, HENDON and LOBREE, JJ.

PER CURIAM.

2 In this first-party insurance action, People’s Trust Insurance Company, the defendant below, appeals entry of final judgment in favor of the plaintiffs below, Pedro Ramos Santos and Yanela Arteaga Simon (“Insureds”), on Insureds’ breach of contract claim. The trial court entered the final judgment following the court’s grant of Insureds’ motion for summary judgment that claimed People’s Trust had violated sections 627.7011, 627.70131, and 627.7142 of the Florida Statutes. Because we conclude under the particular facts and circumstances of this case that People’s Trust did not violate the statutes in question, and that, in light of People’s Trust’s exercise of its right to repair option, the judgment is inherently inconsistent with the record, we reverse the trial court’s April¹⁸, 2019 summary judgment order and the May 30, 2019 final judgment and remand for further proceedings.

I.

RELEVANT FACTS AND PROCEDURAL BACKGROUND

A. Insureds’ Insurance Policy People’s Trust issued a homeowners’ policy covering Insureds’ Hialeah residence for the policy period between September²⁰, 2016 and September²⁰, 2017. The policy insured the dwelling at replacement cost and included a $6,800 hurricane deductible. In return for a premium discount, the subject policy contained a Preferred Contractor Endorsement (the “endorsement”). The endorsement

1. If “you” and “we fail to agree on the amount of loss, which includes the scope of repairs, either may demand an appraisal as to the amount of loss and the scope of repairs. In this event, each party will choose a competent appraiser within²⁰ days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, “you” or “we” may request that the choice be made by a judge of a court of record in the state where the Described Location is located. The appraisers will separately set the amount of loss and scope of repairs. If the appraisers submit a written report of an agreement to “us,” the amount of loss and scope of repairs agreed upon will be the amount of loss and scope of repairs. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss and the scope of repairs. Each party will pay its own appraiser, and bear the other expenses of the appraisal and umpire equally.

This was the only appraisal clause contained within the policy. B. Insureds’ Policy Claim

1 Insureds claim they did not receive the October 27, 2017 letter until November 21, 2017.

Enclosed please find the following documentation:

1. Executed Work Authorization

2. Executed Sworn Proof of Loss with supporting estimate from [Insureds’ public adjuster]

The executed work authorization form had several provisions struck through, including the provision requiring Insureds to pay the $6,800 deductible prior to the commencement of the repairs. The report of Insureds’ public adjuster

2 “Actual cash value” is generally defined as replacement cost minus depreciation. Trinidad v. Fla. Peninsula Ins. Co., 121 So. 3d 433, 438 (Fla. 2013).

3 In fact, despite People’s Trust having exercised its right to repair in lieu of making a loss payment, Insureds’ complaint erroneously alleged that People’s Trust had actually made an inadequate loss payment to Insureds.

4 Although Insureds did not specifically reference section 627.7011 in their summary judgment motion, the statute was clearly the basis underlying this argument. See Assad v. Mendell, 550 So. 2d 52, 54 (Fla. 3d DCA 1989) (“The function of a motion for summary judgment is to determine if the

respective parties can produce sufficient evidence in support of the operative issues made in the pleadings.”).

5 Although Insureds’ complaint neither cited to sections 627.70131 and 627.7142 nor contained any allegations with respect to People’s Trust’s purported violation of these statutes, People’s Trust did not object to Insureds’ summary judgment motion on the basis that Insureds had sought relief beyond the issues framed by the pleadings. See Reddy v. Zurita, 172 So. 3d 481, 484 (Fla. 5th DCA 2015). Consequently, People’s Trust consented to having these issues adjudicated. Id. at 484, n.5.

II.

ANALYSIS⁶

Insureds’ summary judgment motion asserted that People’s Trust breached the insurance contract – thus, entitling Insureds to a final judgment for repair damages – by violating three different statutory provisions. While we have no transcripts of the summary judgment hearings, it appears the trial court agreed with Insureds on each basis. We address each in turn, and

6 “We review the trial court’s orders granting final summary judgment de novo. Similarly, a trial court’s decision construing a contract presents an issue of law subject to de novo review.” Siegel v. Tower Hill Signature Ins. Co., 225 So. 3d 974, 976 (Fla. 3d DCA 2017) (citation omitted). We likewise review the trial court’s interpretation of statutes de novo. Health Options, Inc. v. Palmetto Pathology Servs., P.A., 983 So. 2d 608, 613 (Fla. 3d DCA 2008). The lack of hearing transcripts does not preclude our review. See Seal Prods. v. Mansfield, 705 So. 2d 973, 975 (Fla. 3d DCA 1998) (“Where the appeal is from a summary judgment, the appellant must bring up the summary judgment record, that is, the motion, supporting and opposing papers, and other matters of record which were pertinent to the summary judgment motion. Those are the portions of the record essential to a determination whether summary judgment was properly entered. . . . Consequently, it is not necessary to procure a transcript of the summary judgment hearing, . . . although it is permissible and often helpful to do so.”).

A. Section 627.7011 of the Florida Statutes

First, Insureds argued below that People’s Trust breached the insurance contract by violating section 627.7011, governing loss payments for dwellings insured at replacement cost. Where, as here, the dwelling is insured for replacement cost, section 627.7011(3)(a) requires the insurer to “initially pay at least the actual cash value of the insured loss, less any applicable deductible.”⁷ This section, though, is inapplicable when the insurance policy contains, and the insurer validly exercises, a right to repair clause. See § 627.7011(5)(e) (“This section does not . . . [p]rohibit an insurer from exercising its right to repair damaged property in compliance with its policy and s. 627.702(7).”); Prepared Ins. Co. v. Gal, 209 So. 3d 14, 17 (Fla. 4th DCA 2016) (“A ‘replacement cost policy’ is a policy where the insurer agrees to compensate for a loss without taking into account depreciation. Such a policy does not prohibit repairing the

7 “The insurer shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred.” § 627.7011(3)(a), Fla. Stat. (2017).

B. Section 627.70131 of the Florida Statutes

Next, Insureds argued below that, by not responding within fourteen days to Insureds’ counsel’s March 27, 2018 letter, People’s Trust breached

8 “The new contract formed between the insurer’s preferred and designated contractor under such an endorsement and the insured has been termed a ‘Drew agreement,’ a reference to Drew v. Mobile USA Ins. Co., 920 So. 2d 832 (Fla. 4th DCA 2006).” People’s Tr. Ins. Co. v. Franco, 305 So. 3d 579, 582 (Fla. 3d DCA 2020).

§ 627.70131(1)(a), Fla. Stat. (2018). This subsection, though, “shall not apply to claimants represented by counsel beyond those communications necessary to provide forms and instructions.” § 627.70131(1)(c), Fla. Stat. (2018) (emphasis added). Further, “[i]f the communication constitutes a notification of a claim, . . . the acknowledgment shall provide necessary claims forms, and instructions, including an appropriate telephone number.” § 627.70131(2), Fla. Stat. (2018) (emphasis added). Thus, where the insured is represented by an attorney, the statute requires only that the insurer acknowledge receipt of those communications that notify the insurer that its insured is making a claim under the policy. In such instances, the insurer’s acknowledgment of the claim notification need only provide the insured’s attorney with the necessary claim forms and instructions.

15

In this case, Insureds’ counsel notified People’s Trust of Insureds’ loss on September¹⁰, 2017. This communication was clearly a “notification of a claim” under section 627.70131, triggering People’s Trust’s subsequent investigation of Insureds’ claim. Insureds, however, made no argument below with respect to People’s Trust’s acknowledgement of their September¹⁰, 2017 claim notification. Instead, Insureds argued that their counsel’s March 27, 2018 follow-up communication to People’s Trust – sent in response to People’s Trust’s October 27, 2017 letter acknowledging that their loss was covered, but below the policy’s hurricane deductible, and exercising the right to repair – also constitutes a “notification of a claim” under the statute. We disagree. Insureds’ counsel’s March 27, 2018 communication merely provided People’s Trust with additional information regarding a claim of which People’s Trust had already been notified and for which it had already acknowledged coverage. The communication served only to establish a dispute between the parties over the amount of loss and scope of repairs of this covered claim; it did not constitute a “notification of claim” for the purposes section 627.70131. Hence, we are compelled to reverse the trial court’s summary judgment to the extent that it was based upon Insureds’

C. Section 627.7142 of the Florida Statutes

Also, Insureds argued below that People’s Trust breached the insurance contract by violating section 627.7142, governing an insurer’s obligation to distribute the “Homeowner Claims Bill of Rights.” The statute requires insurers of residential property to “provide a Homeowner Claims Bills of Rights to a policyholder within¹⁴ days after receiving an initial communication with respect to a claim . . . .” § 627.7142, Fla. Stat. (2018). Among other things, this document must inform claimants that when they submit a sworn proof of loss to their insurer, they have the right to make a written request that the insurer timely confirm whether their claim is covered, denied or being investigated: YOU HAVE THE RIGHT TO:

. . . .

2. Upon written request, receive from your insurance company

within 30 days after you have submitted a complete proof-of-loss statement to your insurance company, confirmation that your claim is covered in full, partially covered, or denied, or receive a written statement that your claim is being investigated.

Id. (emphasis added).

Finally, because we have reversed all three grounds upon which Insureds’ summary judgment motion was premised, in order to provide some limited guidance on remand, we note one additional ground that compels reversal. The policy’s appraisal provision – contained within the endorsement – is available as a dispute mechanism to the parties only if People’s Trust elects its right to repair option in lieu of making a loss payment. Insureds’ complaint, however, contains no allegations, and the challenged orders do not contain any findings,⁹ that People’s Trust improperly exercised the right to repair option or that the endorsement is otherwise invalid. Quite the opposite: the trial court ordered an appraisal; Insureds did not appeal the

9 Insureds concede that the trial court entered summary judgment with “no reservation” regarding People’s Trust’s exercise of its right to repair under the policy endorsement. The final judgment also makes no mention of the endorsement or People’s Trust’s exercise of the repair option contained therein.

10 A trial court’s interlocutory order compelling appraisal is an appealable, nonfinal order. See Fla. R. App. P. 9.130(a)(3)(C)(iv).

11 Obviously, on remand, we do not know whether: (i) Insureds will seek leave to file an amended complaint; (ii) People’s Trust will seek a ruling on its previously filed motion to dismiss upon which the trial court reserved ruling; (iii) the parties will proceed to allow Rapid Response Team, LLC to perform the repairs pursuant to the appraisal award; or (iv) the parties will pursue other courses of action. Such further proceedings will be left to the sound discretion of the trial court.

D.

CONCLUSION

Based upon the summary judgment record, we conclude that, contrary to the assertions in Insureds’ summary judgment motion (and implicit conclusions by the trial court), People’s Trust did not violate sections 627.7011, 627.70131, or 627.7142 of the Florida Statutes. Further, because, pursuant to the endorsement in the subject policy, People’s Trust exercised its right to repair Insureds’ damages – and Insureds have not alleged any infirmity in People’s Trust’s election of the endorsement or otherwise challenged the endorsement’s validity – we are compelled to reverse the final judgment awarding Insureds money damages because the remedy awarded is inherently inconsistent with the record. We, therefore, reverse the trial court’s April¹⁸, 2019 summary judgment order and the May 30, 2019 final summary judgment and remand for further proceedings. Reversed and remanded.