FILED 

 U.S. COURT OF APPEALS

 ELEVENTH CIRCUIT 

 02/07/00

 THOMAS K. KAHN 

 CLERK

 [PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

_______________

No. 97-5856

_______________

D. C. Docket No. 97-2302-CV-JAL

HILDA GALINDO,

Plaintiff-Appellant,

versus

ARI MUTUAL INSURANCE COMPANY, 

f.k.a. American Reliance Insurance Company,

Defendant-Appellee.

_______________

No. 97-5857

_______________

D. C. Docket No. 97-2314-cv-JAL

ALICIA SUAREZ,

Plaintiff-Appellant,

versus

ARI MUTUAL INSURANCE COMPANY,

f.k.a. American Reliance Insurance Company,

Defendant-Appellee.

_______________
*

Honorable Richard H. Mills, Senior U.S. District Judge for the Central District of

Illinois, sitting by designation.

2

No. 98-4485

_______________

D. C. Docket No. 97-2975-CIV-SH

RAMON FERRER, 

MAYRA FERRER,

Plaintiffs-Appellants,

versus

UNITED STATES FIDELITY AND GUARANTY COMPANY,

Defendant-Appellee.

______________________________

Appeals from the United States District Court

for the Southern District of Florida

______________________________

(February 7, 2000)

Before BIRCH and CARNES, Circuit Judges, MILLS*

, Senior District Judge.

BIRCH, Circuit Judge:
3

These consolidated cases present the issue of whether a supplemental claim

on a homeowner’s insurance policy permits the insurance company to investigate

the additional claim before an appraisal is required under the policy. The district

judges determined that the insurance companies’ investigation of the subsequent

claims was a condition precedent to appraisal; consequently, the insureds’

appraisal request was premature. We affirm.

I. BACKGROUND

In the wake of Hurricane Andrew, which struck Dade County, Florida, on

August 24, 1992, numerous residential owners made claims on their homeowners’

insurance policies for property loss and damage. Three such homeowners and their

respective insurance companies are involved in this appeal: Hilda Galindo

(“Galindo”) and ARI Mutual Insurance Company, formerly, American Reliance

Insurance Company (“ARI”); Alicia Suarez (“Suarez”) and ARI; and Ramon and

Mayra Ferrer (“Ferrer”) and United States Fidelity and Guaranty Company

(“USF&G”). In 1992, all of these homeowners made claims on their insurance

policies following Hurricane Andrew. After investigation, the insurance
1

 ARI paid Galindo $14,864 on November 25, 1992, for structural damage to her home

and loss of personal property, and it paid Suarez’s claim on October 8, 1992. Suarez, however,

was dissatisfied with the first payment and submitted a subsequent claim, which ARI paid on

June 14, 1993. The cumulative amount paid to Suarez under all coverages provided by her

policy was $8,817. The record does not reveal the amount of the1992 payment that USF&G

made to the Ferrers. 

2

 Galindo’s May 5, 1997, letter to ARI demanded payment of $109,296, less the previous

payment, within five business days or submission to appraisal. Suarez’s May 20, 1997, letter to

ARI demanded payment of $85,404, less former payments, within five business days or

submission to appraisal. The Ferrers’ June 20, 1997, letter to USF&G demanded payment of

$161,404.15, less the prior payment, within ten days or submission to appraisal.

4

companies paid the claims, and payment was accepted by the insureds.1

Thereafter, the insurance companies considered these claims settled and closed.

In 1997, all of these homeowners wrote their insurance companies, stated

that their previous payments had been insufficient to cover the Hurricane Andrew

loss and/or damage to their residences and personal property, and demanded

payment of supplemental, sizeable claims on their policies based on unsworn and

unsigned estimates purportedly prepared by East Coast Appraisers, Inc. (“East

Coast”). The insureds also imposed on the insurance companies an ultimatum:

either pay the requested amounts within a few days or submit to appraisal or

arbitration under the terms of the policy.2

 In response, the insurance companies

promptly informed the insureds that invocation of appraisal was premature prior to

an investigation of the claim by the insurance companies. To investigate these

supplemental claims after five years had passed since the original Hurricane
3

 Although the East Coast estimate for Galindo and Suarez represented that the report

included work accomplished and work to be done with invoices, no invoices were attached and

repairs that supposedly had been done were not identified. 

4

 The same district judge for the Galindo and Suarez cases quoted the appraisal provision

of the ARI homeowner’s policy, which is representative of appraisal provisions in homeowner’s

insurance policies:

Appraisal. If you and we fail to agree on the amount of loss, either may

5

Andrew payments, the insurance companies requested that the insureds fulfill their

obligations under the insurance policies, which included providing a sworn proof

of loss with supporting documentation,3

 allowing inspection of the property, and

appearing for an examination under oath. 

Rather than complying with the insurance companies’ requests for

information to permit investigation of the claims, all of the insureds filed

complaints in state court and sought declaratory relief by compelling appraisal

under their respective policies. The insurance companies removed the cases to

federal court based on diversity jurisdiction and filed motions to dismiss for failure

to state a claim for which relief could be granted or for summary judgment based

on lack of disagreement regarding the loss amount in the 1997, supplemental

Hurricane Andrew claims. The district judges concluded that the insureds had

prevented the insurance companies’ investigation of the supplemental claims,

which was a condition precedent to either party’s demand for appraisal because of

failure to agree regarding the loss amount.4

 Accordingly, the motions to dismiss or
demand an appraisal of the loss. In [that] event, each party will choose a

competent appraiser within 20 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 and we may request that the choice be made by a

judge of a court of record in the state where the residence premises is located. 

The appraisers will separately set the amount of loss. If the appraisers submit a

written report of an agreement to us, the amount agreed upon will be the amount

of loss. 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.

Galindo R1-18-1-2; Suarez R1-20-1-2 (alteration in original). The judge stated that “[n]owhere

in [Galindo’s] complaint does she suggest that A[RI] disagreed with her as to the value of her

loss.” Galindo R1-18-3 n.1; Suarez R1-20-3 n.1.

Similarly, the district judge granting summary judgment in Ferrer concluded:

[T]he Ferrers argue that USF&G’s request for documentation, examination under

oath and sworn proof of loss are sufficient to establish the existence of a

disagreement between the parties regarding the amount of loss, thereby making

their invocation of the appraisal process appropriate. The pertinent policy

provision states, “If you and we fail to agree on the amount of loss, either may

demand an appraisal of the loss.” The Court finds nothing in USF&G’s request

that connotes disagreement with the amount of loss claimed by the Ferrers in their

demand letter. USF&G’s response is nothing more than a request for further

information and documentation, in accordance with the terms of the insurance

policy, to permit USF&G to evaluate the Ferrers’ claim.

Ferrer R1-20-5 (emphasis added). 

6

for summary judgment were granted. On appeal, the insureds pursue their

arguments that they are entitled to compel appraisal concerning the loss amount of

their supplemental claims based on loss estimates. They also appeal the district

judges’ denying their motions to amend their complaints.
7

II. DISCUSSION 

We review a district court’s granting summary judgment de novo, consider

all facts and reasonable inferences in favor of the nonmoving party, and apply the

same legal standards used by the district court. See Allison v. McGhan Medical

Corp., 184 F.3d 1300, 1306 (11th Cir. 1999). Summary judgment properly was

granted when the evidence before the district judge showed that there was no

genuine issue concerning any material fact and that the moving party was entitled

to judgment as a matter of law. See Carnival Brand Seafood Co. v. Carnival

Brands, Inc., 187 F.3d 1307, 1309 (11th Cir. 1999) (citing Fed. R. Civ. P. 56(c)). 

The interpretation of an insurance contract is a question of law subject to de novo

review. See Technical Coating Applicators, Inc. v. United States Fidelity & Guar.

Co., 157 F.3d 843, 844 (11th Cir. 1998). We review de novo a district judge’s

granting a motion to dismiss for failure to state a claim. See Long v. Satz, 181

F.3d 1275, 1278 (11th Cir. 1999) (per curiam). This consists of finding that there

is no set of facts that could substantiate the allegations of the complaint; we review

the legal conclusions de novo. See Mesocap Ind. Ltd. v. Torm Lines, 194 F.3d

1342, 1343 (11th Cir. 1999).

A federal court applies the substantive law of the forum state in a diversity

case, unless federal constitutional or statutory law requires a contrary result. See
5

 The Florida Supreme Court also has explained the purpose of this rule and the hierarchy

of authority in Florida courts:

“The District Courts of Appeal are required to follow Supreme

Court decisions. As an adjunct to this rule it is logical and

necessary in order to preserve stability and predictability in the law

that, likewise, trial courts be required to follow the holdings of

higher courts—District Courts of Appeal. The proper hierarchy of

decisional holdings would demand that in the event the only case

on point on a district level is from a district other than the one in

which the trial court is located, the trial court be required to follow

that decision. Alternatively, if the district court of the district in

which the trial court is located has decided the issue, the trial court

is bound to follow it. Contrarily, as between District Courts of

Appeal, a sister district’s opinion is merely persuasive.”

Pardo v. State, 596 So.2d 665, 666-67 (Fla. 1992) (citation omitted). Indeed, Suarez concedes in

her brief: “Due to the discrete genesis of these claims — Hurricane Andrew’s devastation of

South Florida — there is little likelihood that another district court of appeal will address this

issue or take a position contrary to that of the Third District. Without an inter-district express

and direct conflict, this issue is unlikely to reach the Florida Supreme Court from the Third

District Court of Appeal.” Appellant Suarez’s Brief at 37; see Fla. R. App. P. 9.030(2)(A)(iv)

(stating that the Florida Supreme Court has discretionary jurisdiction to review district court of

appeals decisions that “expressly and directly conflict with a decision of another district court of

appeal”).

8

Salve Regina College v. Russell, 499 U.S. 225, 226, 111 S.Ct. 1217, 1218 (1991). 

Absent a decision by the highest state court or persuasive indication that it would

decide the issue differently, federal courts adhere to intermediate appellate courts in

applying state law. See Insurance Co. of N. Am. v. Lexow, 937 F.2d 569, 571 (11th

Cir. 1991). Concomitantly, the Florida Supreme Court has held that “‘[t]he

decisions of the district courts of appeal represent the law of Florida unless and

until they are overruled by this Court.’ Thus, in the absence of interdistrict conflict,

district court decisions bind all Florida trial courts.”5

 Pardo v. State, 596 So.2d 665,
6

 In his special concurrence, Chief Judge Schwartz, who authored the former Third

District Court of Appeal’s seminal case for appellant’s position, Allstate Ins. Co. v. Sierra, 705

So.2d 119 (Fla. Dist. Ct. App. 1998), “and several of its ill-conceived descendants” in the Third

District Court of Appeal, see, e.g., Hurrah v. Allstate Ins. Co., 721 So.2d 1266 (Fla. Dist. Ct.

App. 1999) (per curiam); Llaguno v. ARI Mut. Ins. Co, 719 So.2d 311 (Fla. Dist. Ct. App. 1998)

(per curiam); Perez v. Allstate Ins. Co., 709 So. 2d 591 (Fla. Dist. Ct. App. 1998) (per curiam),

agreed with “Judge Jorgenson’s unanswerable opinion” in Romay. Romay, 744 So.2d at 472

(Schwartz, C.J., specially concurring). 

7

 Delineated by the Romay court, the representative USF&G post-loss obligations under

its homeowner’s policy provide:

2. Your duties after loss. In case of a loss to covered property, you must see that 

9

666 (Fla. 1992) (citation omitted) (alteration in original). “The law is settled that a

federal appellate court sitting in a diversity case must apply the state law as it exists

at the time of the appeal and not at the time of the district court judgment.” Kramer

v. Piper Aircraft Corp., 868 F.2d 1538, 1541 (11th Cir. 1989).

The Florida Third District Court of Appeal, sitting in Miami, unanimously has

decided en banc the precise issue before us in a consolidated case arising from

homeowners’ supplemental claims against their insurance companies for Hurricane

Andrew damage and loss. See United States Fidelity & Guar. Co. v. Romay, 744

So.2d 467 (Fla. Dist. Ct. App. 1999) (en banc). In Romay, the Third District Court

of Appeal receded from its prior law that required appraisals based solely on the

insured’s filing a sworn proof of loss.6

 Instead, the en banc court held “that the

insured must meet all of the policy’s post-loss obligations before appraisal may be

compelled.” 7

 Id. at 468.
the following are done: 

a. give prompt notice to us or our agent; 

.... 

d. (1) protect the property from further damage; 

 (2) make reasonable and necessary repairs to protect the property; and 

 (3) keep an accurate record of repair expenses; 

e. prepare an inventory of damaged personal property showing the quantity, 

 description, actual cash value and amount of loss. Attach all bills, receipts and 

 related documents that justify the figures in the inventory; 

f. as often as we reasonably require: 

 (1) show the damaged property; 

 (2) provide us with records and documents we request and permit us to make

copies; and 

 (3) submit to questions under oath and sign and swear to them;

g. send to us, within 60 days after our request, your signed, sworn proof of loss 

 which sets forth, to the best of your knowledge and belief: 

 (1) the time and cause of loss; 

 (2) the interest of the insured and all others in the property involved and all

liens on the property; 

 (3) other insurance which may cover the loss; 

 (4) changes in title or occupancy of the property during the term of the policy; 

 (5) specifications of damaged buildings and detailed repair estimates; 

 (6) the inventory of damaged personal property described in 2e above; 

 (7) receipts for additional living expenses incurred and records that support the 

 fair rental value loss . . . .

Romay, 744 So.2d at 470-71. The Romay court determined that “[t]hese obligations are not

unduly burdensome or arbitrary and constitute assurance that the insurer will be provided with

adequate information on which to base its conclusion.” Id. at 471. Furthermore, the en banc

state appellate court concluded that these post-loss obligations were required as conditions

precedent for appraisal and that the policy terms were not ambiguous. See id.

10

Appraisal in a homeowner’s insurance policy is treated as an arbitration

provision, “narrowly restricted to the resolution of specific issues of actual cash

value and amount of loss.” Id. at 469. Consequently, the en banc court reasoned

that it is “axiomatic that an arbitrable issue exists between the parties whose

agreement provides for appraisal when there is a disagreement in the dollar amount
8

 The court further explained that 

permitting the insured to compel appraisal without first complying

with the policy’s post-loss obligations would place the insurer at a

considerable disadvantage entering the appraisal process. The

nature of the post-loss obligations is merely to provide the insurer

with an independent means by which to determine the amount of

loss, as opposed to relying solely on the representations of the

insured.

Romay, 744 So.2d at 471 n.4.

9

 Nearly ninety years ago, the Florida Supreme Court recognized that express conditions

in an insurance contract are part of the consideration for the insurer to assume the risk and that

the insured, by accepting the policy, becomes bound by these conditions. See Southern Home

Ins. Co. v. Putnal, 49 So. 922, 932-33 (Fla. 1909); see also Shuster v. South Broward Hosp. Dist.

Physicians’ Prof’l Liability Ins. Trust, 591 So.2d 174, 176 (Fla. 1992) (“The insurer has the duty

11

of the loss being claimed.” Id. That court further recognized that “the disagreement

necessary to trigger appraisal cannot be unilateral.” Id. at 469-70. Rather, the

contract terms “contemplated that the parties would engage in some meaningful

exchange of information sufficient for each party to arrive at a conclusion before a

disagreement could exist.” Id. at 470. Otherwise, an insured, after sustaining a loss,

“could immediately invoke appraisal and secure a binding determination as to the

amount of loss” and “the post-loss obligations, would be struck from the contract by

way of judicial fiat and the bargained-for contractual terms would be rendered

surplusage.”8

 Id. at 471. The court concluded that “[t]here exists but one

reasonable interpretation of the terms of the policy at issue here: The insured must

comply with all of the policy’s post-loss obligations before the appraisal clause is

triggered.”9

 Id. In the absence of a Florida Supreme Court decision on this issue
to investigate the facts and give fair consideration to the claims pending.”). Indeed, the Supreme

Court has stated with respect to an insured’s responsibility to submit to an examination under

oath:

The object of the provisions of the policies of insurance, requiring

the insured to submit himself to an examination under oath, to be

reduced to writing, was to enable the company to possess itself of

all knowledge, and all information as to other sources and means

of knowledge, in regard to the facts, material to their rights, and to

enable them to decide upon their obligations, and to protect them

against false claims.

Claflin v. Commonwealth Ins. Co., 110 U.S. 81, 94-96, 35 S.Ct. 507, 515 (1884). 

10 Galindo and Suarez also argue on appeal that the district judge abused her discretion in

denying their respective motions pursuant to Federal Rule of Civil Procedure 15(a) to amend

their complaints. Among the reasons that the Supreme Court has recognized as warranting the

denial of a motion to amend is “futility of amendment.” Foman v. Davis, 371 U.S. 178, 182, 83

S.Ct. 227, 230 (1962). “A proposed amendment is futile if the complaint, as amended, would be

subject to dismissal.” Jefferson County School Dist. No. R-1 v. Moody’s Investor’s Servs., Inc.,

175 F.3d 848, 859 (10th Cir. 1999). There is no way that Galindo and Suarez could amend their

complaints to obtain the declaratory judgment that they sought in district court because of the

Florida Third District Court of Appeal’s Romay decision, the basis of our holding in this case. 

Romay requires that insureds comply with the post-loss provisions of their insurance policies

and that there be disagreement between the insured and the insurer before appraisal is

appropriate. Thus, the district judge correctly denied their respective motions to amend their

complaints.

Suarez also contends that the district judge erred in denying her motion to remand for

lack of subject matter jurisdiction pursuant to 28 U.S.C. § 1447(c), because the appraisal remedy

that she seeks requires determination and application of state substantive law. In addition to

12

and finding no conflict with federal constitutional or statutory law, we apply the

Florida Third District Court of Appeal’s en banc opinion in Romay to the

consolidated appeals before us. Therefore, we hold that these insureds must comply

with the post-loss terms of their respective homeowner’s policies, which enables the

insurance companies to investigate the insureds’ claims and to disagree with the loss

amount before the appraisal term becomes effective.10
diversity, under which ARI removed the underlying state-court action to federal court, 28

U.S.C. § 2201(a) authorizes a federal court “[i]n a case of actual controversy within its

jurisdiction . . . [to] declare the rights and other legal relations of any interested party seeking

such declaration . . . [and] [a]ny such declaration shall have the force and effect of a final

judgment or decree and shall be reviewable as such.” Id. While the Supreme Court has

recognized that “it would be uneconomical as well as vexatious for a federal court to proceed in

a declaratory judgment suit where another suit is pending in a state court presenting the same

issues, not governed by federal law, between the same parties,” no state court proceeding

remains between Suarez and ARI that would give rise to “gratuitous interference” after removal

to federal court. Brillhart v. Excess Ins. Co., 316 U.S. 491, 495, 62 S.Ct. 1173, 1175-76 (1942)

(emphasis added). Furthermore, our decision in this appeal applies the Third District Court of

Appeal’s Romay decision, which is the same ruling that Suarez would receive in state court

because the state trial court is bound by Romay. Thus, Suarez’s argument that the district

judge’s denial of her motion to remand to preclude the federal courts from deciding a state-law

issue is meritless. 

 

13

III. CONCLUSION

These three appeals, Galindo, Suarez, and Ferrer, pose the same issue of

whether an insured’s supplemental claim on a homeowner’s policy requires

appraisal based on the insured’s proof of loss. The district judges in each of these

cases removed from state court determined that the insured’s unilateral loss estimate

without an opportunity for the insurance company to investigate the supplemental

claim was insufficient to constitute a disagreement between the two parties regarding

the amount of loss or damage. Because we apply Florida law to resolve these

consolidated appeals and the Florida Third District Court of Appeal has decided en

banc in Romay that an insurance company must be given an opportunity to

investigate a supplemental claim before there can be a disagreement between the
14

parties regarding the amount of property loss or damage to effectuate appraisal, we

AFFIRM.

AFFIRMED.