In a reversal, a Florida appellate court ruled an appraisal was warranted rather than litigation after an insurer did not wholly denied coverage of its insured homeowner claim and the dispute hinged on the amount of the loss.

Jose and Stefania Colucciello submitted a claim to their insurer, First Protective Insurance Co., doing business as Frontline Insurance Co., for damage caused by water intrusion from Hurricane Irma in 2017.

First Protective investigated and paid the Colucciellos more than $100,000 for both mold damage and other interior damage to their home. First Protective, however, declined to pay for some exterior damage.

The Colucciellos sued First Protective for breach of contract, and the company moved to dismiss and to compel an appraisal under the terms of the insurance policy.

Following a brief hearing, the trial court denied First Protective's motion to compel appraisal, and First Protective appealed.

First Protective argued the trial court erred in denying its motion because the dispute between the parties related to the total amount of the loss, which it contended was properly determined by appraisers under the terms of the insurance contract.

The Colucciellos maintained the trial court ruled correctly because First Protective denied coverage for the exterior damage to their home and, as such, whether this aspect of their claim was covered under their insurance policy was a determination to be made by the trial court.

First Protective countered that it did not “wholly deny” coverage on the Colucciellos' claim and that, under Johnson v. Nationwide Mutual Insurance, 828 So. 2d 1021 (Fla. 2002), this was not a dispute over coverage but instead merely a disagreement between the parties on the amount of the loss, which was an issue to be determined under the insurance policy by an appraisal.

The  Decision

The appellate court reversed and remanded with directions to the trial court to compel an appraisal.

In its decision, the appellate court explained the Colucciellos submitted one claim under their policy for damage to their home caused by water intrusion. The appellate court said First Protective agreed  this was a covered claim and paid a “significant amount of money on the claim” to the Colucciellos or on their behalf but disagreed with them on the total amount owed.

The appellate court concluded that under Johnson, coverage was not “wholly denied” by First Protective and, under the terms of the parties' insurance contract, an appraisal was required to determine the total amount of the loss.

The case is First Protective Insurance v. Colucciello, No. 5D19-31 (Fla. Ct. App. July 12). Attorneys involved include: Jay M. Levy, Jay M. Levy P.A., Miami, and Karen Fultz, Sheehee & Associates, Miami, for appellant; and Matthew G. Struble, Struble P.A., Fort Lauderdale, for appellees.

Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. Meyerowitz is the Director of the Insurance Coverage Law Center and editor-in-chief of journals on insurance law, banking law, bankruptcy law, energy law, government contracting law, and privacy and cybersecurity law, among other subjects. Contact him at smeyerowitz@meyerowitzcommunications.com.