Page 1 of 48

Case No. 5:19cv371-RH-MJF

IN THE UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF FLORIDA

PANAMA CITY DIVISION

CYNTHIA WILSON et al.,

Plaintiffs,

v. CASE NO. 5:19cv371-RH/MJF

FEDERAL INSURANCE COMPANY,

Defendant.

_____________________________________/

ORDER GRANTING SUMMARY JUDGMENT IN PART

This case presents a dispute over the amount due under a homeowners

insurance policy for losses caused by a hurricane. Each side has moved for 

summary judgment. A critical issue is the effect of two appraisal awards. Under 

Florida law, the appraisal panel could have resolved coverage issues, but it did not. 

This order holds that the awards are binding on the issues the panel considered—

on loss amounts—but not on coverage issues the panel did not consider. This order 

addresses de novo the issues the panel did not address.

I. Background

Caroline P. Ireland owned a residence and 14 acres on the waterfront in Bay 

County, Florida. The defendant Federal Insurance Company insured the property. 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 1 of 48
Page 2 of 48

Case No. 5:19cv371-RH-MJF

The property was directly in the path of Hurricane Michael, by some measures the 

strongest storm ever to hit the continental United States. The storm inflicted major 

damage.

Ms. Ireland died of unrelated causes a few months later. Her nieces Alma 

Wilson Backer and Cynthia Wilson—to whom Ms. Ireland had conveyed an 

interest in the property apparently as an estate-planning measure—became the 

personal representatives of her estate. They pursued her claim under Federal’s 

insurance policy. Federal disagreed with the amounts they claimed.

The policy called for an appraisal, but the parties disagreed on which state’s 

law would govern the appraisal process. Ms. Backer and Ms. Wilson filed this 

action for a declaration on the choice-of-law issue and for other relief. After a 

ruling on the choice-of-law issue and other skirmishing, the parties agreed to a 

bifurcated appraisal process: first on losses related to structures on the insured 

premises, that is, losses for everything other than contents; second on losses related

to contents. The litigation was stayed while the appraisals went forward. 

The appraisal panel issued its awards. The plaintiffs assert the awards are 

binding and entitle the plaintiffs to judgment based on their terms. Federal asserts 

the awards include amounts not only for covered losses but for some losses that are 

not covered, that at least some other errors in the awards can be corrected by the 

court, and that parts of one award exceed the applicable policy limits for discrete 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 2 of 48
Page 3 of 48

Case No. 5:19cv371-RH-MJF

categories of coverage. Federal asserts the plaintiffs cannot recover at all on the 

contents claim because they refused to sit for an examination under oath and did 

not produce some of the requested records on that claim. Each side has moved for 

summary judgment on these issues.

In addition, Federal has moved for leave to amend its answer to assert a 

fraud defense and a counterclaim for recoupment of all amounts it previously paid. 

Federal says the plaintiffs intentionally misrepresented the cause or extent of 

damage to some items included in the contents claim and fraudulently sought 

recovery for some contents that were excluded from Federal’s policy because they 

were covered by a different insurer.

Federal has moved to vacate the contents appraisal award based on the same 

alleged fraud.

II. The Effect of the Appraisal Awards

Appraisal provisions in insurance policies are commonplace. Like arbitration 

clauses, they are contractual in nature—the parties can make the provisions as 

broad or as narrow as they choose. 

When, as here, an appraisal provision does not specify whether it applies 

only to issues related to the amount of loss or will extend also to coverage issues, 

the answer is provided by the law of the appropriate jurisdiction. In this case, that 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 3 of 48
Page 4 of 48

Case No. 5:19cv371-RH-MJF

means the law of Florida. The analysis supporting the conclusion that Florida law 

applies is set out in the order of April 8, 2020, ECF No. 24 at 2–4. 

Under Florida law, when an issue is whether an insurance policy provides 

any coverage for any part of a claim or none, the coverage issue is for the court, 

not the appraisers. But if there is at least some coverage for some part of the claim, 

the issue of which parts of the claim are covered is for the appraisers. In other 

words, coverage is for the court only when the issue is all or nothing. See State 

Farm Fire & Cas. Co. v. Licea, 685 So. 2d 1285 (Fla. 1996). The Eleventh Circuit 

has confirmed this is the proper reading of Licea. See Three Palms Pointe, Inc. v. 

State Farm Fire & Cas. Co., 362 F.3d 1317 (11th Cir. 2004) (upholding an 

appraisal award for relocation expense without reaching the issue of whether the 

policy at issue actually covered relocation expense). The analysis supporting this 

conclusion is set out at greater length in the order of August 24, 2021, ECF No. 96 

at 4–5. 

Here there is no dispute that a covered peril—the hurricane’s winds—

damaged this property. Federal acknowledged this and paid substantial amounts on 

the claim. Under Licea and Three Palms, either party could have insisted on 

submitting to the appraisal panel the issue of which losses are covered. But that is 

not what happened. This appraisal panel confined its inquiry to the dollar amount 

of losses caused by the covered peril, without analyzing whether any specific 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 4 of 48
Page 5 of 48

Case No. 5:19cv371-RH-MJF

element of loss was within the policy’s coverage. The parties acquiesced in this 

treatment. 

The plaintiffs’ insistence that the appraisal awards nonetheless settle all 

coverage issues makes no sense. The awards determined what they determined—

no more and no less. The umpire’s deposition testimony sets out with unmistakable 

clarity what the awards did and did not determine. The awards determined the 

dollar amount of losses caused by the covered peril, but not whether the loss in any 

category was covered or excluded by the policy. The plaintiffs are not entitled to 

recover elements of loss that neither the panel nor the court has determined are 

within the policy’s coverage and that, when properly analyzed, are not within the 

policy’s coverage. 

Well-accepted principles of contract law support this conclusion. For 

contractual provisions of any kind, including for appraisal of insurance losses, the 

parties’ practical construction of their contract sometimes controls over a contrary 

interpretation that might otherwise be adopted by a court. See, e.g., Reinhardt v.

Reinhardt, 131 So. 2d 509, 512–513 (Fla. 3d DCA 1961) (citing Holmes v. Stearns 

Lumber & Exp. Co., 63 So. 449, 452 (Fla. 1913)). Moreover, the parties to an 

appraisal agreement, like the parties to contracts of other kinds, are free to modify 

their agreement, either explicitly or through their conduct. See, e.g., Beach Higher 

Power Corp. v. Granados, 717 So. 2d 563, 565 (Fla. 3d DCA 1998) (recognizing 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 5 of 48
Page 6 of 48

Case No. 5:19cv371-RH-MJF

that parties may modify a contract through their conduct, even if the contract itself 

says it can be modified only in writing). 

In this case, when these parties first presented to the court the question 

whether this appraisal provision extended to coverage issues, they did not address 

what the appraisal panel actually did and their acquiescence in it. Instead, Federal 

asserted that it had argued coverage to the panel, at least on the lost-rent issue, and

that the panel had inexplicably resolved the issue in the plaintiffs’ favor. The court 

record did not show the parties’ practical construction or modification of their 

agreement. But now the record does show this. The record shows that the parties 

practically construed the appraisal provision or modified it through their conduct to 

apply only to the amount of loss caused by the covered peril, not to coverage 

issues. The awards determined only what they determined, leaving unresolved 

coverage issues for the court.

A side note: the appraisal panel’s limited approach and the parties’ 

acquiescence in it ought not be criticized. The approach may be consistent with the 

standard in the trade—or at least with the standard practice of some appraisers, 

including those involved here. Moreover, an appraiser or litigant might reasonably

choose to adopt this approach and thus to avoid the uncertainty posed by Licea and 

Three Palms, with which some Florida intermediate appellate courts have 

disagreed. And regardless of the standard in the trade or governing law, litigants

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 6 of 48
Page 7 of 48

Case No. 5:19cv371-RH-MJF

might reasonably conclude that coverage issues of this kind could be resolved 

more reliably by a court than by an appraisal panel—and so might choose not to 

submit the issues to an appraisal panel. Whether deliberately or otherwise, that is 

the course these parties followed.

III. The Structures Award

A. Lost Rent

Perhaps the clearest illustration of what the appraisal awards did and did not 

determine comes from the structure award’s treatment of lost rent. 

The appraisal award put the fair rental value of the property at $100,000 per 

month for a period of one year, a total of $1,200,000. This is a facially reasonable 

amount for this property—for this residence and 14 acres on the waterfront at this 

location. But the insurance policy provides for payment of lost rent only if the 

property—or any part of it—was usually rented “to others.” This property was 

never rented to others. The plaintiffs are not entitled to recover any amount for lost 

rent.

As the umpire’s testimony makes clear, the appraisal award was not to the 

contrary. The appraisal panel did not have a copy of the insurance policy, did not 

consider whether the property had or had not been rented, and did not determine 

whether Federal was or was not obligated to pay the plaintiffs $1,200,000 for lost 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 7 of 48
Page 8 of 48

Case No. 5:19cv371-RH-MJF

rent. The determination was simply that if lost rent was recoverable, this was the 

recoverable amount.

Federal is entitled to summary judgment in its favor on the lost-rent issue.

B. Duplication

Federal asserts the structures award included improper duplication that can 

and must be corrected by the court. Thus, for example, the award included 

amounts to clean the house’s drapes and also to replace them. The same for 

flooring. The record does not make completely clear that the allegedly duplicative 

amounts related to the same drapes and flooring—this was, after all, a large house 

with many drapes and lots of flooring. 

The inclusion of both cleaning and replacement costs, if indeed these were 

for the same drapes and flooring, might have been a mistake. But it might not 

have been. Leaving wet drapes or flooring in place to grow toxic mold prior to 

their replacement might not be prudent. Attempting to clean drapes to avoid 

having to replace them, but then replacing them if cleaning proves unsuccessful, 

might be prudent and indeed more favorable to an insurer than jumping 

immediately to replacement. This is what the plaintiffs say happened here. See 

ECF No. 60-1 at 3. Federal’s assertion that it can never be proper to clean an item 

that will eventually be replaced is incorrect. The record does not establish that the 

award was erroneous. 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 8 of 48
Page 9 of 48

Case No. 5:19cv371-RH-MJF

More fundamentally, these were issues properly within the scope of the 

appraisal. A court cannot vacate or ignore an appraisal award merely on the 

ground that it was mistaken. See Schnurmacher Holding, Inc. v. Noriega, 542 So. 

2d 1327, 1328 (Fla. 1989) (holding an arbitration award binding even though

mistaken: an award “cannot be set aside for mere errors of judgment either as to 

the law or as to the facts”); A.L. Gary & Assoc., Inc. v. Travelers Indem. Co. of 

Conn., No. 08-60636-CIV, 2008 WL 11333729, at *7 (S.D. Fla. Aug. 27, 2008) 

(applying this principle to an appraisal award). Nothing prevented Federal from 

raising these issues before the appraisal panel, whose award, unless vacated on 

other grounds, is binding on these issues.

C. Policy Limits

In addition to lost rent, the structures award determined losses of 

$1,136,984.04 for the “main house,” $10,005.12 for “mold remediation” for the 

“main house,” $2,813,916.46 for “other structures,” $10,000.00 for “mold 

remediation” for “other structures,” $505,995.20 for “extended building 

coverages,” and $569,125.00 for “incurred temporary repairs.”

The award’s terms—those in quotation marks in the preceding paragraph—

are not identical to the terms used in the policy’s description of its separate 

coverages. This is hardly surprising—the appraisal panel did not have a copy of the 

policy. Federal says the losses should be reallocated to match the policy’s 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 9 of 48
Page 10 of 48

Case No. 5:19cv371-RH-MJF

coverages—or just to correct errors in the award’s treatment of some losses—and 

that, when properly reallocated, some of the losses exceed the policy limits.

Federal is correct that applying the policy limits is for the court—the panel did not 

undertake to do this—and that this could require reallocating any losses the panel 

put in the wrong category.

As relevant here, the policy has separate limits for the “house,” “other 

permanent structures” (abbreviated in this order as “OPS”), mold remediation, and 

tree removal that is not otherwise covered. 

1. House

The listed house limit is $2,142,000. ECF No. 127-1 at 50. But the policy’s 

“payment basis” is “extended replacement cost.” This increases the limit by 50%,

“if necessary, for the reconstruction cost.” Id. at 77. This effectively makes the 

house limit, as relevant here, $3,213,000. The award for the house, including any 

amounts properly allocated to the house, does not exceed this amount. Indeed, the 

part of the award applicable to the house does not exceed the listed limit of 

$2,142,000. Federal concedes that the part of the award properly allocated to the 

house does not exceed the policy limit.

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 10 of 48
Page 11 of 48

Case No. 5:19cv371-RH-MJF

2. OPS

The policy’s listed OPS limit is $2,285,800. Id. at 52. But again there is a 

50% increase because the payment basis is extended replacement cost, effectively 

making the OPS limit, as relevant here, $3,428,700. Id. at 77.

Federal says some of the amounts included in the award’s “main house” 

category should be allocated instead to the policy’s OPS coverage, including, for 

example, amounts awarded for the driveway and masonry walls. This is probably 

correct for the driveway. See Shelter Mut. Ins. Co v. Simmons, 293 F. App’x 273, 

275 (5th Cir. 2008) (holding that a driveway was an “other structure” under a 

policy governed by Mississippi law); Int’l Risk Mgmt. Inst., Other Structures, 

https://www.irmi.com/term/insurance-definitions/otherstructures#:~:text=Other%20Structures%20%E2%80%94%20homeowners%20pol 

(defining OPS to include structures “separated from the dwelling by a clear space” 

and including “driveway” in a list of examples). Whether this is correct for the

masonry walls depends on whether they were connected to the house, a factual 

question on which the record may not be clear. Compare ECF No. 58-4 at 1

(setting out Federal’s position that the walls were not part of the house) with ECF 

No. 60-1 at 2 (adjuster’s unsworn assertion that the walls were attached to the 

house). 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 11 of 48
Page 12 of 48

Case No. 5:19cv371-RH-MJF

Federal asserts its proposed reallocations would put the OPS award above 

the policy’s listed OPS limit of $2,285,800. But the reallocations plainly would not

put the OPS award about the extended-replacement-cost limit of $3,428,700. The 

reallocations thus would make no difference. The award does not exceed the OPS 

limit.

3. Mold Remediation

The mold remediation limit is “$10,000 for each occurrence.” ECF No. 127-

1 at 52. Hurricane Michael was a single occurrence. The structures award includes 

$20,005.12 for mold remediation, allocated $10,005.12 to the main house and 

$10,000 to other structures. As the plaintiffs apparently concede, they are entitled 

to recover only $10,000 for mold remediation. The remaining $10,005.12 in mold 

remediation expense is not recoverable.

4. Tree Removal

The policy, which refers to Federal as “we” and the insured as “you,” 

provides: “Unless covered elsewhere under this policy, we will pay the reasonable 

expenses you incur up to a total of $1,000 for each occurrence to remove trees 

fallen due to wind, hail, sleet or the weight of ice or snow.” Id. at 80. Hurricane 

Michael was a single occurrence, so the limit for tree removal under this provision 

is $1,000, unless greater coverage is provided elsewhere in the policy.

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 12 of 48
Page 13 of 48

Case No. 5:19cv371-RH-MJF

The policy includes landscaping coverage that applies to trees and has a 

limit of $10,000 per tree, but the provision does not apply to losses caused by wind 

and so is inapplicable here. 

The policy covers debris removal with a limit of 30% of the house limit 

before application of the extended-replacement-cost increase. Id. at 81. So the 

debris limit is $642,600—more than enough to cover the cost of removing all the 

fallen trees. But only some, not all, fallen trees are within the debris coverage. 

The debris provision states: “We cover the reasonable expenses you incur to 

remove debris [1] of a covered loss and [2] of the property that caused a covered 

loss.” Id. at 81 (bracketing added). A “covered loss,” as applicable here, is a loss to 

the house or other permanent structure. See id. at 77 (providing for payment of 

“reconstruction cost”); id. at 76 (defining “reconstruction cost” as the lesser of the 

cost to repair, replace, or rebuild “your house or any other permanent structure”). 

A tree is not itself a house or other permanent structure, so a fallen tree is not 

“debris of a covered loss” within clause [1] of the debris provision. A fallen tree is 

“property that caused a covered loss” within clause [2] only if the tree fell on—that 

is, caused a physical loss to—the house or other permanent structure. The debris 

provision does not apply to trees that fell, and stayed on, unimproved land.

Federal agrees with this analysis. The plaintiffs apparently disagree only for 

trees that blocked access to the site of the house or other permanent structure and 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 13 of 48
Page 14 of 48

Case No. 5:19cv371-RH-MJF

whose removal therefore was necessary to repair, replace, or rebuild the structure. 

That assertion implicates a different coverage—the policy’s coverage of the house 

and other permanent structures. Because “reconstruction cost” includes the cost to 

repair, replace, or rebuild the house and other permanent structures, any tree 

removal that is part of that cost—including any removal that is necessary to allow

repair, replacement, or rebuilding—is covered not just under the tree-removal 

provision but “elsewhere in this policy.” Any such tree removal thus is not subject 

to the $1,000 tree-removal limit.

The structures award does not separately identify amounts awarded for tree 

removal. Federal says the award included $289,606 for debris removal and that it 

paid $261,645; Federal apparently asserts the difference of $17,961 is attributable 

to uncovered tree removal in excess of the $1,000 limit. The plaintiffs apparently 

agree that the award included $17,960.60 for uncovered tree-removal expense. The 

$0.40 difference is apparently a rounding error. The record thus establishes, 

without genuine dispute, that the award includes $17,960.60 in unrecoverable treeremoval expense, and that no further reduction for tree-removal expense is in 

order.

D. Expenses Not Yet Incurred

Property insurance policies can provide for payment on various grounds. 

The most common are actual cash value and replacement cost. Actual cash value is 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 14 of 48
Page 15 of 48

Case No. 5:19cv371-RH-MJF

net of depreciation, so, for example, a house that would cost $200,000 to rebuild 

might be worth 10% less than that amount, or $180,000. Replacement cost, in 

contrast, would be the full $200,000. 

It is commonplace for policies that cover replacement cost to provide that 

the amount that exceeds actual cash value—$20,000 in our hypothetical—is 

payable only after the cost is actually incurred, that is, only after the structure at 

issue is in fact repaired, replaced, or rebuilt. So, in our example, the insurer might 

be obligated to pay only $180,000 until the insured actually incurs greater expense

to rebuild, up to the full $200,000. 

Federal asserts this policy works that way—that some amounts included in 

the award will not be payable until actually incurred. Federal says this is so for 

amounts it says were included in the structures award as “placeholders” for 

expenses that will be incurred during the process of rebuilding. Federal says it will 

“pay these costs if, and when, they are incurred.” ECF No. 127 at 8. 

The flaw in the argument is that this policy, unlike many others, does not 

provide that replacement cost in excess of actual cash value is payable only when 

the cost is incurred. The payment basis under the policy is “extended replacement 

cost.” ECF No. 127-1 at 77. The policy explicitly indicates what this means: “If the 

payment basis is extended replacement cost, we will pay the reconstruction cost.” 

Id. This is a defined term: “‘Reconstruction cost’ means the lesser of the amount 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 15 of 48
Page 16 of 48

Case No. 5:19cv371-RH-MJF

required at the time of loss to repair, replace, or rebuild, at the same location, your 

house or any other permanent structure, using like design, and material and 

workmanship of comparable kind and quality.” Id. at 76 (emphasis added). To 

underscore this, the policy provides there will be no deduction for depreciation or 

other specified amounts. Id. at 76–77. The policy does not say Federal will pay the 

“reconstruction cost,” or any part of it, only when the house or other permanent 

structure is repaired, rebuilt, or replaced.

Federal says, though, that in discussing a different payment basis, “verified 

replacement cost,” the policy explicitly addresses whether replacement cost must 

actually be incurred: “If the payment basis is verified replacement cost, we will 

pay the reconstruction cost of . . . your house . . . and other permanent structures 

. . . whether or not you actually repair, replace, or rebuild.” Id. at 77 (emphasis 

added). Federal says the policy would have said the same thing for extended 

replacement cost—the payment basis involved here—if the intent was the same. 

But the assertion ignores the plain language and structure of the policy. 

First, nothing in the policy says that when the payment basis is extended 

replacement cost, the insured must “actually repair, replace, or rebuild” as a 

prerequisite to recovering reconstruction cost. An insurer who wishes to impose 

such a limitation must say so. It is not enough that a different, inapplicable 

provision explicitly excludes such a limitation. 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 16 of 48
Page 17 of 48

Case No. 5:19cv371-RH-MJF

Second, “extended replacement cost” is the policy’s superior coverage—the 

superior coverage Ms. Ireland paid for and Federal agreed to provide. The superior 

coverage provides greater benefits, including the 50% increase in limits noted 

above, and comes with a greater obligation to keep the property fully insured, not 

just insured at 90% of value as required for verified replacement cost. Id. at 77. 

Federal has it backwards when it asserts the policy provides greater replacementcost benefits when the payment basis is verified replacement cost than when the 

payment basis is extended replacement cost.

Under the policy’s plain language, the plaintiffs are entitled to recover 

replacement cost now. There is no requirement to repair, replace, or rebuild before 

recovering the full amount of the loss as properly calculated based on replacement 

cost. 

Federal has proffered no evidence that the amounts included in the award, 

including the amounts it denigrates as “placeholders,” are not reasonable 

determinations of amounts the plaintiffs will have to incur to repair, replace, or 

rebuild. Determining these amounts was the role of the appraisal panel, whose 

determination is now binding.

IV. Contents Award

The plaintiffs say they are entitled to recover the full amount of the contents 

appraisal award. Federal disagrees on three grounds.

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 17 of 48
Page 18 of 48

Case No. 5:19cv371-RH-MJF

First, Federal says the plaintiff’s amended complaint—the operative 

pleading—does not assert a contents claim. But it does. The amended complaint, 

which sometimes refers to the contents appraisal as the “phase two” appraisal,

demands “ancillary relief necessary to afford complete relief,” including, after 

completion of the phase two appraisal, “judgment on the phase two appraisal 

award (if any).” ECF No. 66 at 3 ¶ 5; see also id. at 29 (demanding “judgment 

following appraisal confirming the award and compelling its payment”).

Proceeding in this manner is unobjectionable. Indeed, it happens frequently in 

cases of this kind that the sequence is (1) filing of the complaint, (2) appraisal, and 

(3) entry of judgment based on the appraisal. 

Second, Federal says the award included loss amounts for some items that 

were not damaged by the hurricane, or that had preexisting damage improperly 

treated as caused by the hurricane, or that could have been cleaned or repaired but 

were treated as a total loss. This is an assertion that the appraisal panel made 

mistakes. But as set out above, a court cannot set aside an appraisal award on the 

ground that it is mistaken. See supra at 9. Evaluating these contentions was the 

province of the appraisal panel. Whether, as Federal contends, the award should be 

set aside on other grounds—failure to submit to a requested examination under 

oath, or to produce documents, or fraud—is a separate question addressed below.

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 18 of 48
Page 19 of 48

Case No. 5:19cv371-RH-MJF

Third, Federal invokes the policy’s exclusion for personal property “insured 

on a blanket basis under a personal articles floater policy or similar policy.” ECF 

No. 127-1 at 95. As is undisputed, Ms. Ireland was insured under such a policy—a 

“fine art personal blanket” policy issued by Ironshore Indemnity Inc. The plaintiffs 

are not entitled to recover for loss to articles insured under the Ironshore policy. 

In resisting application of this exclusion, the plaintiffs say they are not 

seeking a double recovery. But that misses the point. The plaintiffs are not entitled 

to recover from Federal for any article covered under the Ironshore policy. This is 

so regardless of whether the plaintiffs recovered from Ironshore or even whether 

they asserted a claim against Ironshore. What matters is whether an article was 

covered by Ironshore, not whether any award against Federal would effect a double 

recovery.

In sum, the contents award must be reduced by only the amount awarded for 

items insured by Ironshore. 

V. Affirmative Defense: Policy Conditions

The policy’s liability coverage, which is not at issue here, imposes on the 

insured an explicit duty to cooperate with Federal in the defense of any claim 

against the insured. The policy’s property coverage, which is at issue here, does 

not explicitly impose a general duty to cooperate. But the property coverage does 

come with conditions addressing examinations under oath and document 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 19 of 48
Page 20 of 48

Case No. 5:19cv371-RH-MJF

production. Federal asserts as an affirmative defense that the plaintiffs failed to 

comply with these conditions.

A. Policy Terms

Three provisions set out the insured’s duty to provide information.

First, the policy requires “you” to submit a sworn proof of loss “providing 

all information and documentation we request such as the cause of loss, 

inventories, receipts, repair estimates and other similar records.” ECF No. 127-1 at 

126. 

Second, the policy allows Federal to “ask you . . . to produce all records and 

documents we request and permit us to make copies.” Id. This language does not 

explicitly require a document request to be relevant to a claim and reasonable, but 

the language should be so construed, a view consistent with the implied covenant 

of good faith. See, e.g., De Leon v. Great Am. Assurance Co., 78 So. 3d 585 (Fla. 

3d DCA 2011) (holding an insured was completely justified in refusing to answer 

impertinent EUO questions).

Third, the policy allows Federal “to examine separately under oath as often 

as we may reasonably require you, family members and any other members of 

your household and have them subscribe the same.” ECF No. 127-1 at 126. 

The policy defines “you” as “the person named in the Coverage Summary, 

and a spouse who lives with that person.” The person named in the coverage 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 20 of 48
Page 21 of 48

Case No. 5:19cv371-RH-MJF

summary is Ms. Ireland. Id. at 50. She had no spouse. The plaintiffs are her 

personal representatives. This order assumes they had the same duty to produce 

documents and appear for EUOs as Ms. Ireland would have had.

B. Chronology

Federal requested contents-related documents at the outset and eventually 

agreed to an order specifying the documents the plaintiffs were required to produce 

prior to the contents appraisal. Federal acknowledged that the plaintiffs complied 

with the order, and the contents claim went to appraisal on that basis. Federal now 

says the plaintiffs should have produced more.

Federal did not request EUOs when the claim was submitted, when the 

lawsuit was filed, when the parties agreed to a bifurcated appraisal schedule, or 

when the appraisals commenced. Shortly before the contents award was expected, 

Federal asked for EUOs for the first time. Federal limited the request to the 

contents claim. 

The chronology confirms just how late in the process it was when Federal 

requested EUOs and additional documents. Hurricane Michael made landfall and 

damaged the property on October 10, 2018. On May 1, 2019, having been unable 

to reach agreement with Federal on the recoverable amount, the plaintiffs 

requested an appraisal. ECF No. 29-2. On May 17, 2019, Federal denied the 

request, saying its investigation was ongoing. ECF No. 29-4. Federal asked for a 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 21 of 48
Page 22 of 48

Case No. 5:19cv371-RH-MJF

sworn proof of loss and documentation, including an inventory and “[a]ny 

documents that support your claim for damaged contents.” Id. at 4. Federal did not 

ask for EUOs and has identified nothing it asked for at that time that the plaintiffs 

did not provide prior to appraisal.

The plaintiffs filed this lawsuit on October 1, 2019. By order dated 

December 30, 2019, the discovery deadline was set for May 15, 2020, and the trial 

was set for August 3, 2020. 

On February 3, 2020, the plaintiffs moved for summary judgment on the 

choice-of-law issue. Federal asked for and received an extension of the deadline to 

respond, and Federal responded by the extended deadline. On April 8, 2020, an 

order was entered determining that Florida law would apply to any appraisal. 

On May 31, 2020, an agreed order was entered with exactly the terms 

proposed by the parties. The order stayed the litigation pending appraisal. The 

order required the plaintiffs to produce within 15 days, that is, by June 15, all 

unprivileged documents in their possession that were requested in prior letters, 

including documents in listed categories. The category specifically addressing 

contents was an “inventory of contents that are being claimed as damaged as part 

of this loss, along with an estimated valued of said items.” ECF No. 26 at 2. More 

general categories that may have dealt with contents as well as structures included 

engineering or expert reports “addressing the nature or cause” of claimed damage, 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 22 of 48
Page 23 of 48

Case No. 5:19cv371-RH-MJF

reports “prepared by or on behalf of the insured under the policy which speak to 

the condition of the subject property prior to the date of loss,” estimates of the loss, 

photographs or videos of the “subject property” prior to the date of loss, and any 

updated or amended proof of loss. Id.

The order set October 15, 2020 as the deadline to complete the appraisal and 

enter an award. The order did not provide for EUOs; Federal had not asked for any. 

By that point, Federal had had 18 months to evaluate the loss and five months to 

conduct the full array of discovery available under the Federal Rules of Civil 

Procedure. 

On August 13, 2020, Federal filed a motion to limit the scope of the 

appraisal. The motion asserted that appraisal of the contents portion of the claim 

was inappropriate because the plaintiffs had not provided requested documents and 

Federal thus had “not had the opportunity to investigate and adjust” that portion of 

the claim. ECF No. 29 at 2. The plaintiffs obtained an extension of the deadline to 

respond to the motion so that the parties could attempt to agree on the matter, and 

the parties eventually agreed. 

On October 6, 2020, an agreed order was entered in exactly the form 

proposed by the parties. ECF No. 39. The order bifurcated the appraisal process 

into phases I and II—into what have also been referred to as the structures 

appraisal and the contents appraisal. The order recounted that Federal had 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 23 of 48
Page 24 of 48

Case No. 5:19cv371-RH-MJF

requested and would be allowed to conduct an additional inspection of the 

contents. The order required the plaintiffs to produce to Federal within 15 days, 

that is, by October 21, 2020, unprivileged documents in their possession that had 

not already been produced “that backup or support the damages or value for any of 

the [contents] claimed.” Id. at 3. The order did not mention, and Federal did not 

request, EUOs.

The October 6 order provided that Federal would have until November 18, 

2020 “to evaluate any potential loss concerning [contents] and provide its position 

on the same and any payments owed to the [plaintiffs] within that time frame.” Id. 

at 3. The order provided that if, after Federal’s evaluation, either party disputed the 

amount recoverable on the contents claim, a demand for appraisal would be 

presented to the other party by November 25, 2020. The order provided that any 

contents appraisal would be completed by December 18, 2020. Id. at 3.

On November 18, 2020, the deadline for Federal to provide its contents 

position, Federal moved to extend the deadline by 30 days. The motion 

acknowledged that the plaintiffs had produced the required documentation by the 

October 21 deadline. ECF No. 43 at 3. The motion said that, despite working 

diligently, Federal’s “team and expert consultant” had been unable to complete 

their evaluation by the November 18 deadline. Id. at 3. In response to the plaintiffs’ 

opposition, Federal said the requested 30-day extension would “allow [Federal] to 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 24 of 48
Page 25 of 48

Case No. 5:19cv371-RH-MJF

complete its investigation of this portion of the claim and provide its position with 

respect to coverage and payment.” ECF No. 49 at 1. Federal did not suggest the 

team and expert consultant needed anything further from the plaintiffs and did not 

mention EUOs, which Federal still had not requested.

On December 4, 2020, an order was entered extending Federal’s deadline to 

advise the plaintiffs of its contents position to December 18, 2020, extending the 

deadline to demand a contents appraisal to December 23, 2020, and extending the 

deadline to complete the contents appraisal and enter an award to January 22, 

2021. ECF No. 51. This was the full extension Federal requested.

On the December 18 deadline, Federal advised the plaintiffs of its contents 

position. Federal said its consultant “had reviewed the items claimed” and 

determined their value. ECF No. 66-3 at 4. Federal put the value at substantially 

less than the plaintiffs claimed. Federal took the unfounded position that the 

plaintiffs could recover some contents-related expenses only after the plaintiffs 

paid the expenses, and Federal asked for documentation of any such payments. 

Federal asked for no other documentation and did not request EUOs. 

The plaintiffs disagreed with Federal’s position on the recoverable contents 

loss, and the dispute proceeded to appraisal. 

The deadline for a contents award was January 22, but the appraisal panel 

said it needed 90 more days. On February 4, 2021, the parties moved jointly to 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 25 of 48
Page 26 of 48

Case No. 5:19cv371-RH-MJF

extend the deadline. On February 5, the motion was granted, and the deadline was 

extended by 90 days, to April 22, 2021. Federal again did not assert it needed more 

time or that the plaintiffs had failed to provide any requested documentation. 

Federal did not say it needed or wished to conduct EUOs. 

Federal asked for EUOs for the first time by letter dated March 2, 2021. The 

letter requested that the EUOs occur on March 24, 2021. The letter said the two 

plaintiffs would be examined sequentially, with neither present for the other’s 

examination. The letter asked for production by March 19 of a broad array of 

documents, much broader than required by the October 6, 2020 agreed order, 

including all documents “that support or concern” the contents claim. ECF No. 78-

2 at 3. The letter offered to move the EUO to a different date for the plaintiffs’ 

convenience.

The plaintiffs apparently responded to the EUO request through telephone 

calls on March 8 and 24 and by letter dated March 30, 2021. The plaintiffs asserted 

the policy’s EUO requirement applies only before the filing of a lawsuit. No 

attempt was made to conduct the EUOs on Federal’s requested date, March 24, and 

no decision was made whether EUOs would or would not occur at some later date. 

The issue lay dormant for a period, perhaps because Federal was changing 

attorneys. 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 26 of 48
Page 27 of 48

Case No. 5:19cv371-RH-MJF

On April 15, 2021, Federal’s appraiser said Federal’s expert’s “content 

package”—apparently Federal’s complete presentation to the panel—would be 

provided within “the next couple of days.” ECF No. 69-1 at 2. The appraiser did 

not say Federal needed anything more and did not mention EUOs. Federal soon 

submitted its package as promised.

On April 22, 2021, Federal again moved to extend the deadline for the 

contents appraisal award, this time at the umpire’s request. The umpire said an 

extension was needed because he was moving and the plaintiffs’ appraiser was 

recovering from covid-19. ECF No. 69-3 at 1. Federal said its own appraiser had 

been dealing with a family member’s covid-19. ECF No. 69 at 2. Federal did not

assert it needed more documentation—or that the panel did—and did not mention 

EUOs. The plaintiffs objected to an extension. 

On April 23, the umpire advised the panel he had received “all the 

information” and did not need a 30-day extension as previously suggested. Federal 

did not withdraw its motion for an extension and may not have known the umpire 

had changed his position. Nobody advised the court of the change. By order dated 

April 26, 2021, the deadline for the contents award was extended to May 23, 2021. 

On May 3, 2021, Federal, now acting through its new attorney, sent an email 

“following up” on the prior EUO request and asking the plaintiffs’ availability on 

May 13 or 14. ECF No. 78-3 at 8. The plaintiffs responded by email the same day. 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 27 of 48
Page 28 of 48

Case No. 5:19cv371-RH-MJF

The email promised to provide the plaintiffs’ position “as soon as possible,” 

indicated May 13 and 14 would not work, and asked for dates the next week, that 

is, during the week of May 17. Id. at 6. 

Two hours later, Federal’s appraiser sent an email to the appraisal panel 

saying unequivocally that Federal was “going to be taking an EUO.” ECF No. 79-1 

at 2. The appraiser said the EUO would seek “information related to the contents to 

ascertain how the contents were handled from the loss event, have all the contents 

been viewed at all potential locations they may be at, and is there any duplication 

of contents between the two different content policies.” Id. The appraiser said he 

was “not sure what other potential issues there may be if any.” Id. 

By email later the same day—promptly after learning of Federal’s 

appraiser’s email—the plaintiffs objected to any delay of the appraisal based on the 

request for EUOs. The plaintiffs asked Federal to indicate whether it was seeking a 

delay. ECF No. 78-3 at 5. Federal responded on May 4 that it might indeed request 

a delay if the plaintiffs did not promptly indicate whether they would sit for EUOs. 

Id. at 4. Federal did not promise not to seek a delay, even if the plaintiffs did

appear promptly for EUOs. Id. Federal asked for an EUO response “by close of 

business today,” and asked the plaintiffs to produce “all documents relating to the 

. . . contents claim, including documentation related to any fine art.” Id. 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 28 of 48
Page 29 of 48

Case No. 5:19cv371-RH-MJF

In its May 4 email, Federal asked for a telephone conference on May 5 to 

discuss the EUO issue. The plaintiffs agreed. At the conference, the plaintiffs said 

they had not decided whether to sit for EUOs. The record does not indicate what if 

anything was discussed about document production.

On May 6, Federal moved to compel EUOs and production of previously 

requested documents “relating to” the contents claim. ECF No. 78 at 6. Federal 

asked alternatively for an order authorizing discovery. Federal said it requested the 

EUOs

to answer questions about the contents being claimed, including 

but not limited to questions about specific information about the 

contents themselves, how the contents were handled following the 

loss, where the contents were located at the time of the loss, the 

age and pre-loss condition of the contents, the damage as a result 

of the loss, and whether any of the contents being appraised have 

also been claimed under another insurance policy.

ECF No. 78 at 6–7. This was one of several motions then pending, with briefing 

not complete until late June.

On July 7, 2021, before a ruling on the pending motions, the panel issued its 

contents award. An order on the motions was issued on August 24, 2021. The order 

denied Federal’s motion to compel EUOs or document production but explicitly 

made “no ruling” on Federal’s affirmative defense that the plaintiffs could not 

recover because they failed to comply with Federal’s requests. The order 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 29 of 48
Page 30 of 48

Case No. 5:19cv371-RH-MJF

authorized discovery “on issues not resolved by the appraisal awards.” ECF No. 96 

at 8. 

C. The Plaintiffs’ Obligation 

Florida law is settled that an EUO provision of this kind is valid and 

enforceable—that an insured’s failure to comply may defeat a claim. See, e.g.,

Stringer v. Fireman’s Fund Ins. Co., 622 So. 2d 145 (Fla. 3d DCA 1993); Laine v. 

Allstate Ins. Co., 355 F. Supp. 2d 1303 (N.D. Fla. 2005). The same is true for 

failure to produce properly requested documents. 

The plaintiffs say they are nonetheless entitled to summary judgment on the 

EUO issue, because, they say, an insured need not appear for an EUO first 

requested after the insured files suit. That is wrong, as shown by this policy’s 

language, the governing caselaw, and sound analysis of how this process should 

work.

First, the policy allows Federal to conduct EUOs “as often as we may 

reasonably require.” ECF No. 127-1 at 126. Nothing in this provision or elsewhere 

in the policy suggests Federal’s right to do this ends when the insured files suit. 

The request must, however, be reasonable, as the EUO provision explicitly 

provides. A post-filing request, like a pre-filing request, may be reasonable.

Second, courts have enforced an insurer’s right to an EUO even when first 

requested after suit was filed. See, e.g., Biscayne Cove Condo. Ass’n v. QBE Ins. 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 30 of 48
Page 31 of 48

Case No. 5:19cv371-RH-MJF

Corp., 971 F. Supp. 2d 1121 (S.D. Fla. 2013). For their contrary assertion, the 

plaintiffs cite Willis v. Huff, 736 So. 2d 1272 (Fla. 4th DCA 1999), but that 

decision supports Federal, not the plaintiffs, on this issue. In Willis, the insured 

filed suit more than two years after a covered event, and the insurer requested an 

EUO only after suit was filed. The trial court granted summary judgment for the 

insurer based on the insured’s failure to appear for the requested EUO. The Fourth 

District reversed, but not because the EUO request came too late. Quite the 

contrary, the Fourth District held that the insured was obligated to appear for an 

EUO. The Fourth District reversed only because, when it became apparent at the 

summary-judgment hearing that the trial court believed the EUO request was 

proper, the insured offered to appear. The Fourth District held that the insured 

should have been given an opportunity to do so at that time; the case was remanded 

so the insured could be given that opportunity. The plaintiffs here have cited no 

case holding that an insurer’s right to an EUO ends when suit is filed, and I am 

aware of none.

Third, a holding that an EUO is required only when requested before suit is 

filed would create undesirable incentives—in effect, a race to the courthouse (for 

an insured) or to an EUO (for an insurer). The incentives against cooperation in 

this field are strong enough already, as are the motivations attending EUO 

requests. See Whistler’s Park, Inc. v. Fla. Ins. Guar. Ass’n, 90 So. 3d 841, 845 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 31 of 48
Page 32 of 48

Case No. 5:19cv371-RH-MJF

(Fla. 5th DCA 2012) (noting that EUO forfeiture decisions “have led to a cottage 

industry of EUO litigation”). The timing of an insurer’s investigation, on the one 

hand, and of an insured’s filing of suit, on the other hand, should turn on other 

considerations—not on an arbitrary rule that an EUO request must come before 

suit is filed.

In sum, on whether the plaintiffs were obligated to appear for EUOs, the 

critical question is not whether Federal made the request before or after the 

plaintiffs filed this action. The critical question is whether Federal’s request was 

reasonable. Had Federal requested EUOs when the plaintiffs filed suit or at any 

time before the appraisal process began, the plaintiffs would have been obligated to 

comply, and their failure to do so might well have entitled Federal to summary 

judgment. 

But that is not what happened. Instead, Federal requested an EUO only very 

late in the process, with an appraisal award imminent. That is an important factor 

in the reasonableness analysis. 

Similarly, on whether the plaintiffs were obligated to produce documents 

sooner than or in addition to what was provided, the critical question is whether the 

production was reasonably requested. The timing of any request for more than the 

plaintiffs had already produced—and more than Federal had agreed to accept—is 

an important factor in the analysis. 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 32 of 48
Page 33 of 48

Case No. 5:19cv371-RH-MJF

D. Whether the Plaintiffs Failed to Appear for EUOs

Federal plainly, if belatedly, requested EUOs. But a date certain was not set, 

and the plaintiffs thus never failed to appear for a scheduled EUO. Whether the 

plaintiffs refused to appear at all, making scheduling of a date certain irrelevant, is 

unclear. 

To be sure, the plaintiffs dawdled when Federal asked for their position. But 

Federal had waited roughly two years before asking for EUOs. Its demand for the 

plaintiffs’ position “by close of business today,” ECF No. 78-3 at 4, might be 

thought unreasonable. 

Moreover, the issue of whether the plaintiffs were obligated to appear at that 

late date was—and still is—unsettled. Under these circumstances, the plaintiffs’ 

failure to respond more quickly could be viewed as tantamount to a refusal but also 

could be viewed as a reasonable request for time to decide. 

Whether the plaintiffs failed to appear for EUOs is a genuine factual dispute. 

See Haiman v. Fed. Ins. Co., 798 So. 2d 811, 812 (Fla. 4th DCA 2001) (holding 

that a factual issue for the jury exists where the insured cooperates to some degree 

or provides an explanation for its noncompliance). Neither side is entitled to 

summary judgment on this issue. 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 33 of 48
Page 34 of 48

Case No. 5:19cv371-RH-MJF

E. Prejudice

Florida law is not entirely clear on whether failure to appear for an EUO 

provides a defense only if the failure causes prejudice to the insurer and, if so, 

which side has the burden of proof on the issue. Compare Goldman v. State Farm

Fire Gen. Ins. Co., 660 So. 2d 300, 306 (Fla. 4th DCA 1995) (holding that an EUO

was “a condition precedent to suit” and that the insured’s failure to comply 

“preclude[d] an action on the policy regardless of a showing of prejudice by the 

insurer”), with Whistler’s Park, Inc. v. Fla. Guar. Ass’n, 90 So. 3d 841, 845–46

(Fla. 5th DCA 2012) (holding the insurer must show prejudice), and Willis v. Huff, 

736 So. 2d 1272, 1274 (Fla. 4th DCA 1999) (distinguishing Goldman on the 

ground that an EUO is a condition precedent only if requested prior to suit). See 

also State Farm Mut. Auto Ins. Co. v. Curran, 135 So. 3d 1071, 1076-80 (Fla. 

2014) (plurality opinion) (stating that an insured’s submission to a medical 

examination as required by the policy is not a condition precedent and thus 

precludes recovery only if the insurer proves actual prejudice); Garden-Aire Vill. S. 

Condo. Ass’n v. QBE Ins. Corp., 591 F. App’x 868, 871 (11th Cir. 2014) (citing 

Florida decisions on both sides of the question whether prejudice is an element of 

an insurer’s defense alleging failure to comply with the policy).

The better view is that prejudice is an element of an insurer’s defense based 

on failure to appear for an EUO, at least when an EUO is first requested after a 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 34 of 48
Page 35 of 48

Case No. 5:19cv371-RH-MJF

lawsuit is filed. If, as Goldman said, this turns on whether appearance for an EUO 

is a condition precedent, the proper treatment of a post-suit request is clear: 

compliance could not be a condition precedent to suit, because appearance was not 

required prior to suit. Moreover, there is no reason to treat failure to appear for an 

EUO, as required by the governing insurance policy, differently from failure to 

submit to an equally required medical examination, the issue addressed in Curran. 

The same is true for a failure to produce properly requested documents. See 

Depositors Ins. Co. v. CC & C of Lake Mary, LLC, 172 So. 3d 888, 891 (Fla. 5th 

DCA 2015) (following the Curran plurality opinion and requiring an insurer to 

show prejudice for a defense based on an insured’s failure to take action after the 

policy became effective). 

The plaintiffs’ failure to appear for the requested EUOs, if indeed they failed 

to appear, and failure to produce properly requested documents, if indeed that 

occurred, might or might not have caused prejudice to Federal. Both sides had 

hired experts to evaluate the contents, and their analyses had been provided to the 

appraisal panel. The contents had belonged to Ms. Ireland, not to the plaintiffs, 

who might or might not have had meaningful knowledge about the contents. The 

plaintiffs probably would, however, have had pertinent information about the 

claim. 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 35 of 48
Page 36 of 48

Case No. 5:19cv371-RH-MJF

Perhaps the plaintiffs could have provided information at their EUOs, or 

perhaps they had possession of requested documents, that would have changed the 

appraisal panel’s analysis. But that is not at all clear. The record does not show 

what further pertinent information the plaintiffs possessed or what they would have 

said, partly because Federal chose not to depose them. The record does not indicate 

whether an EUO would have made any difference, even if conducted before the 

appraisal panel reached its decision. 

Whether the absence of EUOs or any failure to produce requested 

documents caused prejudice to Federal is a genuine factual dispute. Neither side is 

entitled to summary judgment on this issue. As suggested by Curran, Federal will 

have the burden of proof on this issue at trial.

F. Opportunity to Cure

At least one Florida court has held that an insured whose obligation to 

appear for an EUO is unclear, and who is later held to have breached the policy by 

failing to appear, must be given an opportunity to cure the breach. See Willis v. 

Huff, 736 So. 2d 1272, 1274 (Fla. 4th DCA 1999); see also Riviera S. Apartments, 

Inc. v. QBE Ins. Corp., No. 07-60934-CIV, 2007 WL 2506682, at *5 (S.D. Fla.

Aug. 30, 2007) (recognizing that Willis provides support “for the general 

conclusion that an insured should be given an opportunity to comply with requests 

for examinations under oath.”). This order requires the attorneys to confer on the 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 36 of 48
Page 37 of 48

Case No. 5:19cv371-RH-MJF

overall schedule going forward. The conference should also address whether 

Federal still wishes to conduct EUOs and whether the plaintiffs will now appear 

for them. 

VI. Fraud

Federal says the plaintiffs committed fraud both by (1) including in their 

claim items that were covered under the Ironshore policy and that were therefore 

excluded under Federal’s policy and (2) misrepresenting the extent of hurricane 

damage to various items, including 49 not covered by the Ironshore policy. Federal 

has filed two motions raising the fraud issue: first, a motion to vacate the contents 

appraisal award, and second, a motion for leave to amend Federal’s answer to 

include a new affirmative defense and counterclaim. The affirmative defense 

asserts Federal cannot recover at all, even for structures damage unrelated to any 

fraud. The counterclaim seeks to recoup all prior payments, including those for 

structures damage unrelated to any fraud.

A. Items Covered by Ironshore

Federal’s principal complaint is that the plaintiffs’ claim included items 

covered by the Ironshore policy. Federal’s policy excluded coverage of those 

items. Federal has not established, though, that the plaintiffs committed fraud in 

this respect. 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 37 of 48
Page 38 of 48

Case No. 5:19cv371-RH-MJF

First, the plaintiffs never denied the existence of the Ironshore policy. They 

never denied that any item covered by the Ironshore was indeed covered by the 

Ironshore policy. Federal knew about the Ironshore policy at least as early as 

March 15, 2019, when the plaintiffs’ public adjuster sent Federal’s adjuster an 

email identifying Ironshore as the fine-arts insurer and providing its claim number

and contact information. ECF No. 136-1 at 2. The plaintiffs’ submission of a claim 

including items covered by the Ironshore policy thus could not have misled 

Federal, which knew of the exclusion in its own policy and was at least as capable 

as the plaintiffs of determining which items were covered by the Ironshore policy. 

Federal has not identified a false statement at all, let alone a material false 

statement—one that Federal would reasonably take into account given its superior 

knowledge of its own exclusion. 

Moreover, as this order makes clear, any misrepresentation about items 

covered by the Ironshore policy made no difference, because Federal refused to 

pay any part of the claim excluded by the Ironshore policy, and Federal’s position 

has been upheld. Any misstatement about whether any given items were covered 

by the Ironshore policy—Federal has alleged none—did not cause Federal to pay 

losses for those items. Nor could any such misrepresentation have affected the 

appraisal panel, which did not consider coverage issues of this kind. That the 

award includes losses for items covered by the Ironshore policy is of no 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 38 of 48
Page 39 of 48

Case No. 5:19cv371-RH-MJF

consequence, because any judgment for the plaintiffs will exclude that part of the 

award. 

B. Other items

Federal says the plaintiffs misrepresented the extent of hurricane damage to 

49 other items—items not covered by the Ironshore policy. Federal bases the 

assertion on the disparity between the plaintiffs’ claim as submitted to Federal and 

notes apparently made by an expert retained by the plaintiffs to evaluate the items. 

The plaintiffs say these were preliminary, unreliable notes. 

It is a stretch to assert that the plaintiffs must have believed the notes—if 

they even knew about them—or that any statement at odds with the notes was 

willfully false. But the plaintiffs have submitted no evidence explaining the 

disparity. If, as Federal asserts, the plaintiffs willfully concealed preexisting 

damage to some items or the extent of damage to others, they may have committed 

fraud. This record presents a genuine dispute of material fact on this issue.

C. The Proposed Answer and Counterclaim

The genuine dispute over whether the plaintiffs committed fraud does not 

mean Federal should be allowed, at this late date, to amend its answer to assert a 

fraud defense and counterclaim. Federal says it acted as soon as it had the ability to 

subpoena nonparties and thus to learn of the fraud. That is not so.

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 39 of 48
Page 40 of 48

Case No. 5:19cv371-RH-MJF

The plaintiffs filed this action on October 1, 2019. Federal answered on 

November 6, 2019. Discovery opened by December 2, 2019. See ECF No. 10 at 1 

(confirming that the Federal Rule of Civil Procedure 26(f) attorney conference 

occurred that day); Order of Nov. 7, 2019, ECF No. 6 at 1–2 (allowing discovery 

to begin without delay). Discovery was open until the case was stayed pending 

appraisal on May 31, 2020. ECF No. 26. The full array of discovery under the 

Federal Rules of Civil Procedure, including the ability to subpoena nonparties, was 

available to Federal from December 2, 2019 to May 31, 2020—for six months less 

one day. 

Federal chose, for reasons of its own, not to subpoena nonparties during that 

six-month period, even though Federal had roughly the same grounds for doing so 

during that period as later. And even after the appraisals were completed, Federal 

acted only slowly, serving subpoenas returnable after the discovery deadline. 

Federal moved for leave to amend on December 17, 2021, more than three 

years after the hurricane and more than two years after this action was filed. The 

deadline to amend pleadings, based on the court’s order accepting the parties’ 

proposed deadline, was January 30, 2020. See ECF No. 10 at 3 (joint scheduling 

report proposing this deadline); ECF No. 11 at 2 (order adopting the proposal). 

A party who moves for leave to amend after the deadline must show good 

cause for the belated filing. See, e.g., Smith v. Sch. Bd. of Orange Cnty., 487 F.3d 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 40 of 48
Page 41 of 48

Case No. 5:19cv371-RH-MJF

1361, 1366 (11th Cir. 2007). An element of good cause is diligence prior to the 

deadline. See Sosa v. Airprint Sys., Inc., 133 F.3d 1417, 1418 (11th Cir. 1998)

(affirming the denial of leave to amend sought after the deadline: the “good cause 

standard precludes modification unless the schedule cannot ‘be met despite the 

diligence of the party seeking the extension.’” (quoting Fed. R. Civ. P. 16 advisory 

committee's note)); S. Grouts & Mortars, Inc. v. 3M Co., 575 F.3d 1235, 1241–43 

(11th Cir. 2009) (affirming the denial of leave to amend based on lack of diligence 

during discovery). Federal has not shown good cause. It could and should have 

explored these issues early in the litigation. 

To be sure, the plaintiffs amended their complaint after the deadline, on 

March 2, 2021. The amendment more clearly asserted the plaintiffs’ claim for 

payment of the amount due, not just for an appraisal. But the original complaint 

was already sufficient to assert the payment claim, and the amendment was ordered 

on the court’s own motion, not at the plaintiff’s request, simply as a matter of 

sound case management:

As an exercise in sound case management, this order 

requires the plaintiffs to file an amended complaint explicitly 

setting out their breach-of-contract claim—their claim that the 

defendant has failed to pay the amount due as properly determined 

through appraisal. This will require the defendant to make clear in 

its answer the grounds on which it opposes the claim.

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 41 of 48
Page 42 of 48

Case No. 5:19cv371-RH-MJF

Order of Feb. 8, 2021, ECF No. 64, at 2. Having been afforded an opportunity “to 

make clear in its answer the grounds on which it opposes the claim,” Federal said 

not a word about fraud.

After the appraisals were completed and Federal’s plainly unfounded motion 

to vacate the structures award—on grounds not at issue here—the court set a new 

discovery deadline: November 24, 2021. The deadline to move for summary 

judgment was December 17, 2021. Federal belatedly served nonparty subpoenas 

returnable after the discovery deadline, and, remarkably, continued to obtain 

documents based on the subpoenas after an order was entered quashing them as 

untimely. Federal says it first learned of the alleged fraud from those documents.

That seems unlikely. The alleged fraud, though not alleged with 

particularity, was misrepresenting the condition of items that Federal’s own expert 

had examined. Federal has not explained how, if the plaintiffs’ expert was able to 

determine the condition of the items, Federal’s expert could not have done so. 

Federal has not explained why, if Federal could infer fraud from the disparity 

between the plaintiffs’ expert’s analysis and the claim, Federal could not also infer 

fraud from the disparity between its own expert’s analysis and the claim. 

Federal has not shown good cause for the belated filing. The motion for 

leave to amend would be denied on this basis, without more. But there is more. 

Under Federal Rule of Civil Procedure 9(b), a pleading alleging fraud must “state 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 42 of 48
Page 43 of 48

Case No. 5:19cv371-RH-MJF

with particularity the circumstances constituting fraud.” To meet this standard, a 

pleading must set out: 

(1) precisely what statements were made in what documents 

or oral representations or what omissions were made, and

(2) the time and place of each such statement and the person 

responsible for making (or, in the case of omissions, not making) 

same, and

(3) the content of such statements and the manner in which 

they misled the plaintiff, and

(4) what the defendants “obtained as a consequence of the 

fraud.”

Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1371 (11th Cir.

1997) (quoting prior authorities).

Federal’s proffered amendment misses the 9(b) standard by a wide margin. 

The proposed answer’s fraud defense, denominated the eleventh affirmative 

defense, merely quotes the policy’s fraud exclusion: “We do not provide coverage 

if you or any covered person has intentionally concealed or misrepresented any 

material fact relating to this policy before or after loss.” ECF No. 125-1 at 22. The 

defense does not allege the plaintiffs committed fraud at all, just that the policy 

includes this provision. The defense does not allege the plaintiffs misrepresented 

anything, not even generally, and thus does not allege “precisely what statements 

were made in what document or oral representations.” This is the very antithesis of 

a pleading that would pass muster under Rule 9(b). 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 43 of 48
Page 44 of 48

Case No. 5:19cv371-RH-MJF

The law is unsettled as to whether an affirmative defense must include 

factual allegations as extensive as those required for a complaint. See, e.g., 

Southern-Owners Ins. Co. v. Whitley Contracting, Inc., No. 4:14CV106-RH/CAS, 

2014 WL 11512364, at *1 (N.D. Fla. July 9, 2014). But whatever the standard, an 

affirmative defense needs more than this—and when asserting fraud, must comply 

with Rule 9(b). See, e.g., Hendley v. Am. Nat. Fire Ins. Co., 842 F.2d 267, 268–69 

(11th Cir. 1988) (affirming district court’s decision to strike a fraud defense that 

did not comply with Rule 9(b)). This defense is fatally deficient.

The counterclaim is better but still falls well short of the particularity 

required by Rule 9(b). Federal has submitted evidence identifying 49 items on 

which the plaintiffs allegedly inflated their claim. But the evidence is not part of 

the counterclaim. The counterclaim itself does not allege “precisely what 

statements were made” in “what documents or oral representations.” The 

counterclaim does not allege the “time and place” or “persons responsible for the 

misstatements”: was it the plaintiffs themselves or the public adjuster who Federal 

apparently asserts was their agent? The counterclaim does not allege how the 

misstatements misled it—an understandable omission because, on this record, it 

seems clear the misstatements did not mislead Federal at all. And the counterclaim 

does not allege what the plaintiffs “obtained as a consequence of the fraud”—again 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 44 of 48
Page 45 of 48

Case No. 5:19cv371-RH-MJF

an understandable omission because a ruling on the motion to vacate, as addressed 

below, will ensure that the plaintiffs obtain nothing as a consequence of any fraud.

A party who submits a deficient pleading early in a case ordinarily is given 

leave to amend. But Federal’s proposed answer and counterclaim are already far 

too late. Federal has not asserted that, if its proposed pleading is held deficient, it 

should be given leave to try again. As a matter of discretion, this order denies the 

motion for leave to amend and does not grant leave to file another proposed 

amendment.

The denial of leave to amend makes it unnecessary to decide whether, if the 

plaintiffs committed fraud as to the contents claim as Federal asserts, this would 

preclude recovery on other contents items, or on structures, or even would allow

Federal to recoup amounts already paid. Although Florida law is not settled, it is 

likely the fraud would preclude any further recovery on contents—even those 

unaffected by the fraud—but would not preclude recovery on structures and would 

not allow Federal to recoup prior payments. Compare Schneer v. Allstate Indem. 

Co., 767 So. 2d 485, 490 (Fla. 3d DCA 2000), with id. at 490–91 (Schwartz, J., 

dissenting); see also Wong Ken v. State Farm Fire & Cas. Co., 685 So. 2d 1002, 

1004 n.1 (Fla. 3d DCA 1997). 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 45 of 48
Page 46 of 48

Case No. 5:19cv371-RH-MJF

D. Motion to Vacate

As both sides apparently agree, appraisal is properly treated as a narrow, 

specialized form of arbitration. An award may be vacated on the grounds set out in 

Florida Statutes § 682.13. Federal invokes one such ground: that the award was 

procured by fraud. Id. § 682.13(1)(a). 

The motion to vacate presents a genuine factual dispute as to the 49 items 

not covered by the Ironshore policy. The alleged fraud, if ultimately proven, could 

be a basis to vacate or reduce the contents award. 

The plaintiffs say the motion to vacate was filed too late. A motion to vacate 

an award based on fraud must be filed “within 90 days after the ground is known 

or by the exercise of reasonable care would have been known by the movant.” Id. 

§ 682.13(2). Whether Federal used “reasonable care” after issuance of the award is 

a different question from whether Federal showed “good cause” to amend its 

answer or assert a counterclaim long after the deadline to amend pleadings. And 

the burden of proof is different: on the motion to vacate, the burden is on the 

plaintiffs to show lack of reasonable care, while on the motion for leave to amend, 

the burden is on Federal to show good cause. On this record, neither side has 

carried the burden. The result is that the motion to vacate must proceed to an 

evidentiary hearing, despite denial of the motion for leave to amend. 

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 46 of 48
Page 47 of 48

Case No. 5:19cv371-RH-MJF

VII. Conclusion

The appraisal awards determined the amount of loss caused by the covered 

peril—the hurricane’s winds. The appraisal panel did not address additional 

coverage or limits issues, which must be resolved de novo in this litigation. No 

amount of lost rent is covered, resulting in a structures-award reduction of 

$1,200,000. The structures award exceeded the mold limit by $10,005.12. The 

structures award exceeded the limit for not-otherwise-covered tree-removal 

expense by $17,960.60. This leaves a net structures award of $5,018,060.10, 

calculated as the gross award of 6,246,025.82, less lost rent of 1,200,000.00, less 

excess mold remediation of 10,005.12, less excess tree removal of 17,960.60. 

The contents award included $161,180 for items that, at least according to 

Federal, were included in the claim the plaintiffs submitted to Ironshore. But an 

item is not excluded from Federal’s coverage just because the plaintiffs submitted 

a claim to Ironshore; the issue is whether the item was actually covered under the 

Ironshore policy. The second item on Federal’s list consists of a table and chairs, 

with no showing these were in fact covered by Ironshore. This record may include 

sufficient information to allow calculation of the proper reduction of the contents 

award based on Ironshore coverage, but if so, the parties have not cited it. This 

order does not include a calculation.

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 47 of 48
Page 48 of 48

Case No. 5:19cv371-RH-MJF

Even aside from this issue, unresolved issues prevent entry of judgment on 

the contents award at this time. The unresolved issues are whether the plaintiffs 

failed to appear for reasonably requested EUOs or to produce reasonably requested 

documents; if so, whether Federal suffered prejudice as a result; and whether the 

plaintiffs committed fraud as to 49 non-Ironshore items included in the award. The 

EUO issues are part of the plaintiffs’ claim and thus are triable to a jury. The fraud 

issue is part of Federal’s motion to vacate and is triable to the court. This order 

requires the attorneys to confer on a schedule for these proceedings.

IT IS ORDERED:

1. The summary-judgment motions, ECF Nos. 126 and 128, are granted in 

part and denied in part. 

2. The motion to vacate the contents appraisal award, ECF No. 138, is 

denied in part and remains pending in part.

3. The motion for leave to amend, ECF No. 125, is denied.

4. I do not direct the entry of judgment under Federal Rule of Civil 

Procedure 54(b).

5. The attorneys must confer and file a proposed schedule for further 

proceedings by July 11, 2022.

SO ORDERED on June 20, 2022.

s/Robert L. Hinkle

United States District Judge

Case 5:19-cv-00371-RH-MJF Document 170 Filed 06/20/22 Page 48 of 48