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Reversing a trial court decision, the Fourth District Court of Appeal  ruled a homeowner's public adjuster may not later become the insured's "disinterested appraiser" within the meaning of an insurance policy's appraisal clause.

Joseph Valenti Jr. signed an agreement with a public adjuster after a leak in his home caused water damage. Under the agreement, Valenti assigned 20 percent of any recovery from his insurance company, State Farm Florida Insurance Co., to the public adjuster.

After Valenti retained the adjuster, the adjuster contacted State Farm about the claim, attended the property inspection and sent follow-up correspondence about the inspection to State Farm. Ultimately, the company sent payment for its valuation of the loss and demanded appraisal to resolve any remaining dispute about the valuation.

In response, the adjuster sent a letter to State Farm naming himself as Valenti's appraiser. State Farm objected, arguing the appointment of the adjuster violated the policy's requirement that the parties select a "qualified, disinterested appraiser."

Valenti disagreed, and went to court. The trial court entered summary judgment in Valenti's favor, finding as a matter of law that his adjuster could be his "disinterested" appraiser.

State Farm appealed, and the appellate court reversed.

In its unsigned decision, the appellate court specifically refused State Farm's request that it conclude, as a matter of law, that an insured's public adjuster could not later be appointed as the disinterested appraiser where there was a contingency-fee arrangement.

The appellate court said it could resolve the issue on "narrower" grounds: the actions of Valenti's appraiser combined with his financial interest.

The appellate court explained Valenti had signed a contract with the adjuster entitling the adjuster to a portion of any recovery from State Farm and assigning a portion of his claim to the adjuster; the adjuster had inspected the property and submitted the claim to State Farm; and the adjuster subsequently sent a letter appointing himself the appraiser.

On the facts of this case, the appellate court held the adjuster was not "disinterested" and reversed the judgment by Broward Circuit Judge William Haury. On remand, it said the trial court should enter judgment for State Farm on the issue of this specific adjuster's ability to serve as the disinterested appraiser for this insured.

The Third District Court of Appeal issued a broad ban on dual adjuster-appraiser service in July in another State Farm case.

The Fourth District case is State Farm Florida Insurance v. Valenti, No. 4D19-205 (Fla. Ct. App. Dec. 11). Attorneys involved include: Kara Rockenbach, David A. Noel and Daniel M. Schwarz of Link & Rockenbach, West Palm Beach, for appellant, and Matthew G. Struble and Christine D. Skubala of Struble P.A., Fort Lauderdale, for appellee.

Read more: 

Court Clarifies Definition of 'Disinterested' Appraiser in Insurance Dispute

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.