Source: http://butler.legal/Can-an-Insured-Sue-His-Adjuster
Timestamp: 2019-04-22 10:16:06+00:00

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April 09, 2015 | Blog Post| Can an Insured Sue His Adjuster When the Insured is Injured Cleaning Debris, Because the Adjuster Incorrectly Denied Coverage for Debris Removal?
Imagine a gigantic tree limb weighing over 7,000 lbs falling onto your home. You dutifully call your insurance company to report the loss. So when the adjuster inspects your home and (verbally) tells you that debris removal is not covered by your policy and that you need to clean up the debris (glass, limbs, branches) all by yourself, you clean it up yourself, right? And when you hurt your hand in the process of doing so and then discover that your policy does, in fact, provide additional coverage for debris removal, you sue the adjuster for negligent misrepresentation, right?
This is what happened in Bock v. Hansen, 225 Cal. App. 4th 215, 170 Cal. Rptr. 3d 293 (2014). As a result of the injury, the insured sued an adjuster for negligent misrepresentation. After the trial court dismissed the action, the insured’s appealed. The appellate court disagreed with the trial court’s decision, i.e., that the insureds’ Complaint failed to state a cause of action against the adjuster as a matter of law, finding that the adjuster could be held personally liable for the tort of negligent misrepresentation, even though he was not a party to the insurance contract.
The court explained that before an action for negligent misrepresentation could be maintained, there must be a “legal duty.” The court stated that a “special relationship” exists between insurers and their insureds; and therefore, the adjuster, as an employee of the insurer, had a legal duty to the insureds. Because an insured was injured as a direct result of relying on the adjuster’s misrepresentation, the adjuster was subject to liability for the false statements.
The court listed the elements of negligent misrepresentation, one of which is “justifiable reliance on the misrepresentation.” The adjuster in the case argued that the insureds could not justifiably rely on his representations because his representations contradicted the express terms of the policy. The appellate court did not agree.
So what’s the bottom line? Adjusters should be careful when making representations to insureds, and consider only discussing coverage in writing—especially in California! As far as the decision in this case, this case seems to be an outlier, because the majority of jurisdictions have held that an adjuster does not owe a duty to an insured.
A Senior Associate at Butler Weihmuller Katz Craig LLP in Tampa, FL. Morgan practices in our Arson & Fraud and First-Party Coverage departments.
March 07, 2019 Blog PostPennsylvania court rules insurer may still be responsible to pay RCV even if repairs never completed.
In situations where a property insurer denies coverage, the insured often complains that it is faced with a difficult dilemma – use its own money to fund repairs or avoid making repairs and risk having its recovery limited to actual cash value (ACV) if the insurer is later found liable for coverage.
Recently, Florida’s First District Court of Appeal held that for purposes of determining the timeliness of a proposal for settlement, the complaint is considered served on the insurer when process is served upon the statutory agent, Florida’s Chief Financial Officer, and not when process is forwarded by the Chief Financial Officer to the insurer. Markovits v. State Farm Mutual Automobile Ins. Co., 235 So. 3d 1018 (Fla. 1st DCA 2018) rehr’g denied (Feb. 5, 2018).
Recent legislative and judicial developments in Puerto Rico may very well have revived thousands of claims that insurers believed to be time-barred, per the terms of the Suit Against Us provisions of their Policies. Until the February 14, 2019, ruling issued by a San Juan court, residential property damage claims that had not escalated to suit within a year of the date of loss, had been considered time-barred. It would seem that it may not be the case anymore, and insurers should be prepared for a potential flurry of new litigation, even involving prior Hurricane Irma and Maria claims.
The hurricane may trigger civil authority or ingress/egress coverage for businesses that are not directly damaged but lose income because they cannot access their operations for a period of time due to a governmental evacuation order.
Once Hurricane Florence passes through the region, insurance professionals can expect a deluge of claims activity. While both North Carolina and South Carolina have felt the effects of recent Hurricanes Irene and Matthew, for example, many insurance professionals have limited familiarity with the particularized coverage issues which may arise in both states. Navigating the laws of both states, which can be both parallel and disparate, is going to be important in Florence’s aftermath.
The legislatures are directing the public adjuster to focus on negotiating the insurance claim as opposed to profiting from remediation or remediation efforts and to ensure that all relationships are properly disclosed to the insured. This is certainly a move in the right direction.
Increasingly, property insurers in Florida are being sued for bad faith. What accounts for this increase? Mainly, it has been driven by recent appellate court decisions that have eroded and all but eliminated any prerequisites to bad faith actions. In part one of this two-part webinar series, we will outline the legal environment created by those decisions; attempt to define “bad faith”; explore the use and abuse of the civil remedy notice of insurer violation, and; discuss some things that can be done either to avoid a bad faith lawsuit altogether or, at least, to put the file in the best posture if a bad faith lawsuit can’t be avoided.
On January 12, 2018, the Florida House of Representatives passed a bill (HB 7015) that would dramatically affect the way contractors and their lawyers use assignments of benefits (“AOBs”) in first-party property insurance claims and lawsuits. The biggest changes in the bill impact how AOBs must be written, new obligations on assignee contractors in the claim investigation process, limitations on when assignee contractors can file lawsuits, and how and when attorney fees are awarded (see all the details of the bill below).
The United States Supreme Court analyzed the availability of contingency fee enhancements under fee-shifting statutes in Burlington v. Dague, 505 U.S. 557 (1992). There, the Court held that a contingency enhancement was not permitted under fee-shifting provisions of the Solid Waste Disposal Act and Clean Water Act. It reversed a 25% lodestar enhancement. Justice Scalia wrote the majority decision. He emphasized that fees are “certain” or “contingent.” Id. at 560. A fee is certain if it is payable without regard to the outcome of the suit; it is contingent if the obligation to pay depends on a particular result obtained. Id. at 560-61.
It took years of depositions and other discovery to realize that that most of my 2004-2005 hurricane condominium association claims were much simpler to defend than I thought. The center of gravity of these claims was the proper calculation of Actual Cash Value (ACV).
Due to its holding in Macedo II, the Florida Supreme Court created a situation where, arguably, many auto policies now provide coverage for attorney’s fees and expenses awarded against an insured following an adverse verdict triggering the penalties under a proposal for settlement.
On July 20, 2017, the Second District Court of Appeal issued an order that closed its books on the Sebo appeal. Mr. Sebo made a homeowner’s claim to American Home contending construction deficiencies had allowed water to enter the residence at multiple points, causing, eventually, a complete destruction of the residence. The trial court ruled the concurrent cause doctrine applied, and so that the combination of covered water damage and excluded faulty, inadequate and defective construction had resulted in coverage for the loss.
The recent catastrophic ground cover collapse in Land O’Lakes attributed to a sinkhole highlights the unique aspects of Florida geology and the impact it can have on the risks faced by building owners and their insurers. In central and western Florida, the land generally consists of a layer of limestone topped by layers of clays and sands. The limestone is a vestige of the shells and skeletons of marine life deposited during prehistoric periods when that layer was at the bottom of shallow seas. Over time, limestone was formed and covered by layers of silts and sands. The limestone is slowly dissolved by groundwater, and constitutes part of the aquifer.
Four little words—a, an, any, and the—can mean a world of a difference with respect to coverage for an innocent co-insured. A federal judge (applying Florida law) recently ruled that “that the phrase ‘any insured’ unambiguously expresses a contractual intent to create joint obligations.” Stettin v. National Union Fire Insurance Company of Pittsburg, PA, 2017 WL 2858768 (11th Cir., July 5, 2017) (emphasis added). The Settin Court solidified a prior U.S District Court for the Southern District of Florida case, which held that an intentional loss provision precluded coverage for even innocent co-insureds when the intentional loss provision contained language prohibiting coverage for intentional acts by any insured.
For years, courts across the country have considered whether an earth movement exclusion in a policy applies only when the earth movement losses are caused by or stem from natural causes or phenomena, or whether it applies to earth movement losses from both natural and man-made causes.
For years, when a bad faith action was brought pursuant to a jury verdict in excess of policy limits in the underlying UM claim, everyone assumed the jury verdict was binding in the bad faith action. Then, Bottini v. GEICO resulted in a $30.8 million-dollar verdict – over 600 times the policy’s UM limit of $50,000! GEICO appealed, and the Second DCA concluded that even if GEICO were correct that errors affected the jury’s computation of damages, any such errors were harmless in the context of this case.
June 20, 2017 Blog PostFlorida's Third District Court of Appeals provides a warning: When insureds communicate about their policy needs, agents better listen and communicate back or insurance companies could be left holding the bag in a negligent procurement action.
In Kendall South Medical Center v. Consolidated Insurance Nation, No. 3D16-926, 2017 WL 1908376, *1 (Fla. 3d DCA May 10, 2017), the Third District Court of Appeals reversed the lower court’s fourth dismissal of Kendall South Medical Center’s complaint for negligent procurement, holding that there may be liability for negligent procurement where an agent fails to explain to an insured a coinsurance provision that could reduce coverage to less than the amount requested by that insured.
The Third Circuit Court of Appeals sitting in Pennsylvania recently issued a precedential decision that interpreted the definition of a “named insured” under a tax delinquency statute to encompass tenants of a property even though the property owner, not the tenant, owed the delinquent taxes.
Property policies typically provide, if there is coverage, that the insured can recover for the costs to repair or replace the property damaged by loss. But when an insured does not repair or replace the damaged property (or until such repairs are made), the insured is only entitled to the actual cash value of the property. The calculation of actual cash value varies state to state, but generally courts either define it as replacement cost less depreciation or courts use the broad evidence rule.
In the Ridgewood Group LLC v Millers Capital Insurance Company, No. 1138 EDA 2016, February 27, 2017, the Superior Court of Pennsylvania analyzed two often troublesome policy provisions, the surface water exclusion and the ensuing loss cause .
The 2017 Florida Legislative Session convened on March 7. Of particular interest to property insurers are the following bills, which we are closely watching: SB 944, proposing licensing requirements upon appraisers and appraisal umpires; SB 1038 and HB 1218, proposing a statute concerning assignments of benefits; and SB 1218, proposing licensing requirements on those who perform water damage restoration and prohibiting policy provisions that preclude post-loss assignments of benefits.
Jurisdiction gives a federal court the power to hear a case. Jurisdiction matters at the outset of a lawsuit. It matters during discovery. It even matters after summary judgment. Jurisdiction matters because federal courts are courts of limited jurisdiction.
The state of water loss claims abuses in Florida, the water loss marketplace, and water loss damage claims on a national scale were presented by the Division of Insurance Fraud, Bureau of Property & Casualty, and the National Insurance Crime Bureau, respectively.
Policyholders who seek coverage for the monetary consequences of a violation of the statute under the “personal and advertising injury” or general liability coverage in their insurance’ policies are likely to find themselves looking elsewhere for funds.
The decision offers further guidance in the somewhat inconsistent world of rescission and automobile policy statutes, which – when accounting for the application misrepresentation, policy, and statutes – can be a tricky process.
Takeda appealed the ruling to the Fifth Circuit Court of Appeals, but it reached a settlement in the MDL litigation in May of 2015 before appellate briefing commenced. The Actos ruling is isolated to date; no other court has applied this holding or followed its interpretation.
The court noted that Cincinnati had been defending the action since 2012, but did not file the motion until 2015 and only on the eve of trial. With regard to the damage interrogatories themselves, the parties argued that neither party’s expert had broken down the damages in the manner proposed by Cincinnati.
April 06, 2015 Blog PostIt's a "Storm Surge" -- not a "Flood"!
On August 21, 2014, the United States Court of Appeals for the Eleventh Circuit vacated the decision of the U.S. District Court for the Middle District of Florida in Shelton v. Liberty Mutual, Case number 13-15371 / D.C. Docket No. 8:12-cv-02064-JSM-AEP. This decision confirms that the statutory definitions for structural damage under the May 17, 2011 amendments to the Florida sinkhole statutes apply to property policies issued after those amendments were enacted. The court’s order reversed the positions taken by the District Court that seemed bent on plotting a new course for Florida jurisprudence.
A federal judge recently ruled that an insurer was not obligated to pay $50,000 for a feng shui consultant following a fire loss in a dentist’s office. Patel v. American Economy Insurance Co. et al., No. 12-cv-04719, 2014 WL 1862211 (N.D. Cal. May 8, 2014). While the cost to repair the physical damage from the fire was insured under the policy, the court found that the cost to repair damage to any invisible forces that may have been at work in the office was not.

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