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A Florida appellate court has stated in no uncertain terms that a public adjuster previously retained by a policyholder cannot be considered a “disinterested appraiser” during subsequent appraisal proceedings.

The Third District Court of Appeal vacated a Miami-Dade Circuit Court order allowing homeowners Charles and Diana Sanders to use their claims agent, Gian Franco Debernardi with 911 Claims Corporation, in their appraisal proceedings against State Farm Florida Insurance Co. The appellate court found that Debernardi's preexisting relationship with the plaintiffs and financial stake in the appraisal's outcome violated the conditions of the Sanders' homeowner policy with State Farm.

“The appraisal condition in State Farm's Homeowner policy states that, 'Each party will select a qualified, disinterested appraiser,'” the court said. The opinion noted Debernardi's contract with the Sanders provided for him to earn a 10% contingency fee from whatever amount his clients received from State Farm.

“Mr. Debernardi cannot be disinterested, as he has a financial interest in whether or not the insureds recover from State Farm and how much they recover,” the court found.

Steven Gurian and Joe De Prado, litigators with Coconut Grove-based law firm Marin, Eljaiek, Lopez & Martinez, represented the Sanders in the Third DCA. Neither attorney responded to requests for comment by deadline.

The trouble between the Sanders and State Farm began in the wake of Hurricane Irma, which struck Florida in September 2017. The Sanders filed a breach of contract complaint against State Farm in August 2018. The couple alleged the insurance provider did not abide by their homeowners' insurance policy and failed to provide for property damage caused by Irma.

Read the appellate opinion:

The parties subsequently agreed to enter appraisal negotiations. However, State Farm took issue with the Sanders' naming of Debernardi as their appraiser as he had been previously hired by the couple and generated the $88,536.41 estimate at the source of the conflict between the Sanders and their insurance provider. State Farm cited the clause in the homeowner policy calling for a “disinterested appraiser” to be used by both parties and contended Debernardi's history with the Sanders, as well as the money he stood to gain from the appraisal, disqualified him from participating.

Miami-Dade Circuit Judge Martin Zilber issued an order April 9 allowing Debernardi to serve as the Sanders' appraiser during their talks with State Farm. The insurance company subsequently entered their appeal with the Third DCA.

The appellate court quashed the lower court's order, reasoning in part that any harm resulting from Debernardi's hiring in violation of the parties' original agreement could not be rectified on appeal, as “pursuant to the policy language the appraisal process is binding and cannot be undone.”

The court also ruled arrangements such as the one between Sanders and Debernardi do not qualify as “disinterested” under Florida law.

“We hold that a fiduciary, such as a public adjuster who is in a contractual agent-principal relationship with the insureds, cannot be a disinterested appraiser as a matter of law,” Wednesday's opinion said, reiterating that Debernardi would receive a portion of any money given to the Sanders by State Farm. “In the case before us, Mr. Debernardi has previously inspected the loss, and he was the person who prepared the written estimate of damages the insureds used to file their claim. It is hard to imagine that Mr. Debernardi is going to reach a different amount from the initial $88,56.41 estimate he already reached.”

A State Farm representative said the company was satisfied with the appellate court's order in a statement.

“We're pleased with the court's ruling on the plain language of the insurance contract,” the emailed remarks said. “We have nothing further to share beyond the information available in the court filings.”

State Farm's legal counsel, Kara Rockenbach and David Andrew Noel with West Palm Beach law firm Link & Rockenbach, did not return requests for comment.

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