Court Opinion

ID: 4201651
Source: CourtListenerOpinion
Date Created: 2017-09-07 13:07:41.302064+00
Date Added: 2024-06-11T14:14:10.571064
License: Public Domain

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FIFTH DISTRICT

                                                 NOT FINAL UNTIL TIME EXPIRES TO
                                                 FILE MOTION FOR REHEARING AND
                                                 DISPOSITION THEREOF IF FILED

JOSEPH RINGELMAN,

             Appellant,

 v.                                                             Case No. 5D16-260

CITIZENS PROPERTY INSURANCE
CORPORATION,

             Appellee.

________________________________/

Opinion filed September 1, 2017

Appeal from the Circuit Court
for Hernando County,
Richard Tombrink, Jr., Judge.

George A. Vaka and Nancy A. Lauten,
of Vaka Law Group, P.L., Tampa, for
Appellant.

Jonathan D. Franklin, of Franklin Legal
Group, P.A., Miami, for Appellee.

PER CURIAM.

      Appellant, Joseph Ringelman, appeals a final judgment entered in his favor

following his suit for breach of contract against his insurer, Citizens Property Insurance

Corporation ("Citizens"). Ringelman argues on appeal that the trial court erred by staying

execution of the final judgment until he provides Citizens with a signed contract for
completion of the necessary subsurface repairs to his home, which was damaged by

sinkhole activity. Considering Citizens's representations during oral argument, we affirm.

      Citizens issued Ringelman a homeowner's insurance policy that provided

coverage limits of $225,900. The policy included the following provisions concerning

sinkhole damage:

             SECTION I – PERILS INSURED AGAINST

             The following is added to SECTION I – PERILS INSURED
             AGAINST:

             Sinkhole Loss.

             1.     We insure for direct physical loss to property covered
                    under Section I caused by the peril of "sinkhole loss,"
                    including the costs incurred to:

                    a. Stabilize the land and building; and

                    b. Repair the foundation;

                    In accordance with the recommendations of the
                    professional engineer who verifies the presence of a
                    "sinkhole loss" in compliance with Florida sinkhole
                    testing standards and in consultation with you.

                    The professional engineer must be selected or
                    approved by us.

             2.     This peril does not increase the limit of liability applying
                    to the covered property.
             ....

             SECTION I – CONDITIONS

             Loss Settlement paragraph 3.b.(5) is added as follows:

             (5) In the event of a "sinkhole loss":

                    (a) We will pay for "Sinkhole loss," subject to (e)(ii)
                    below, up to the applicable Section I – Property

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                    Coverage Limit of Liability shown in your
                    Declarations.

                    (b) We will pay no more than the actual cash value of
                    the damaged property; not including underpinning or
                    grouting or any other repair technique performed below
                    the existing foundation of the building, until you enter
                    into a contract for the performance of building
                    stabilization or foundation repairs.

                    (c) Once you enter into such contract, we will pay the
                    amounts necessary to begin and perform such repairs
                    as the work is performed and as the expenses are
                    incurred.

                    (d) We may at our option, and with your written
                    approval and written approval of any lienholder, make
                    payment directly to the persons selected by you to
                    perform the land and building stabilization and
                    foundation repairs.

                    (e) If repair has begun and the professional engineer
                    selected or approved by us determines that the repairs
                    will exceed the applicable Limit of Insurance, we will at
                    our option; either:

                           (i) Complete the professional engineer's
                           recommended repairs; or

                           (ii) Pay the policy limits without a reduction for
                           the repair expenses incurred.

      In June 2011, Ringelman notified Citizens that he discovered damage to the floors

and walls of his home purportedly caused by sinkhole activity. At the conclusion of the

claims process, Citizens extended coverage for the sinkhole loss, informing Ringelman

that it would pay $208,322.36 to stabilize his home after he provided Citizens with a

signed contract to complete the subsurface repairs.1 Ringelman responded by sending

      1In the interim, Citizens provided Ringelman with a check for $12,827.23 to repair
the cosmetic damage to the property.
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Citizens a "Sinkhole Demand Package," requesting a total of $329,110.56 to effect the

stabilization repairs. When negotiations reached an impasse, Ringelman filed suit against

Citizens for breach of contract, requesting that the jury determine the amount required to

effectuate the repairs. The jury returned a verdict against Citizens, finding that it

"breached the policy for below ground damages caused by sinkhole activity." The jury

determined that "the total amount of subsurface repair costs" amounted to $445,000.

       Post-trial, Citizens moved for remittitur, reasoning that the jury's award "exceed[ed]

the available insurance coverage by at least $219,000, which does not include any prior

payments for the deductible." Citizens further argued in opposition to Ringelman's motion

for entry of final judgment that any duty to pay the claim must be preceded by Ringelman

providing it with a signed contract to complete the necessary repairs. Ultimately, the lower

court granted Citizens's motion for remittitur, reducing the verdict "to the insurance policy

limits ($225,900), minus the deductible and previous payments." Ringelman filed a

"qualified acceptance of remittitur," explaining that he "reserv[ed] his right to challenge

. . . the portion of the order that requires Mr. Ringelman to enter into a contract to repair

the sinkhole-damaged property when the cost of those repairs . . . far exceed the policy

limits and the amount of the remitted judgment."

       After a hearing at which the parties attempted to agree on the language of the final

judgment, Citizens proposed a final judgment that included the following provisions:

              (A) The verdict is remitted to subject insurance policy limits
              ($225,900.00), minus the deductible and any previous
              payments, if any.

              (B) The Plaintiff must use the net proceeds from the remitted
              monetary final judgment, after consideration of the reasonable
              attorney's fees and reasonable litigation costs, to repair the
              sinkhole-damaged property; unless, Defendant pursuant to

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             the subject policy, chooses to exceed the policy limits in the
             repair of the property.

             (C) Execution of this Final Judgment shall be stayed pending
             the Plaintiff providing Defendant with signed contracts to
             complete the stabilization and/or cosmetic repairs at the
             insured property.

             (D) That given the Plaintiff is the prevailing party in this action,
             he is entitled to an award of his reasonable attorney's fees,
             costs, and interest in the matter as lawfully appropriate.

             (E) The Court retains jurisdiction to determine the amount of
             attorney's fees, costs, and interest that the Plaintiff may
             recover from Defendant.

Ringelman maintained his position that, because the trial court remitted the verdict to the

policy limit, the proposed final judgment placed him in a precarious position wherein he

would have to "enter into a contract to, quote, repair, for a house that can't be repaired

for the $225,000." The trial court disagreed, entering a final judgment containing the

aforementioned provisions requested by Citizens. Ringelman now challenges the portion

of the final judgment staying execution until he provides Citizens with a signed contract

to complete the necessary repairs.

      "The issue in this case concerns construction of an insurance policy which is a

question of law subject to de novo review." Wash. Nat'l Ins. Corp. v. Ruderman, 117 So.
3d 943, 948 (Fla. 2013). Section 627.707, Florida Statutes (2011), sets forth the

procedures for resolving sinkhole claims. If the insurer verifies damage caused by

sinkhole activity, it must adhere to the following procedures for repairing the damage:

             (5) If a sinkhole loss is verified, the insurer shall pay to
             stabilize the land and building and repair the foundation in
             accordance with the recommendations of the professional
             engineer retained pursuant to subsection (2), with notice to
             the policyholder, subject to the coverage and terms of the
             policy. The insurer shall pay for other repairs to the structure

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             and contents in accordance with the terms of the policy. . . .
             However, if the insurer's professional engineer determines
             that the repair cannot be completed within policy limits, the
             insurer must pay to complete the repairs recommended by the
             insurer's professional engineer or tender the policy limits to
             the policyholder.

             (a) The insurer may limit its total claims payment to the actual
             cash value of the sinkhole loss, which does not include
             underpinning or grouting or any other repair technique
             performed below the existing foundation of the building, until
             the policyholder enters into a contract for the performance of
             building stabilization or foundation repairs in accordance with
             the recommendations set forth in the insurer's report issued
             pursuant to s. 627.7073.

             (b) In order to prevent additional damage to the building or
             structure, the policyholder must enter into a contract for the
             performance of building stabilization and foundation repairs
             within 90 days after the insurance company confirms
             coverage for the sinkhole loss and notifies the policyholder of
             such confirmation. This time period is tolled if either party
             invokes the neutral evaluation process, and begins again 10
             days after the conclusion of the neutral evaluation process.

             (c) After the policyholder enters into the contract for the
             performance of building stabilization and foundation repairs,
             the insurer shall pay the amounts necessary to begin and
             perform such repairs as the work is performed and the
             expenses are incurred. The insurer may not require the
             policyholder to advance payment for such repairs. If repair
             covered by a personal lines residential property insurance
             policy has begun and the professional engineer selected or
             approved by the insurer determines that the repair cannot be
             completed within the policy limits, the insurer must complete
             the professional engineer's recommended repair or tender the
             policy limits to the policyholder without a reduction for the
             repair expenses incurred.

Id. § 627.707(5) (emphasis added).

      The Second District Court has issued several opinions resolving the precise issue

in this case, all of which addressed the same sinkhole provisions in Ringelman's

insurance policy. For example, in Citizens Property Insurance Corp. v. Amat, 198 So. 3d
6
730, 731 (Fla. 2d DCA 2016), the homeowners reported damage to their home from

suspected sinkhole activity. Citizens denied the claim, and the case proceeded to a jury

trial. Id. After the jury returned a verdict for the homeowners, the trial court entered final

judgment against Citizens for approximately $168,000. Id. On appeal, Citizens argued the

trial court erred by "requiring it to pay for the cost of the subsurface repairs without

requiring the Homeowners to enter into a contract for those repairs." Id. at 732. The

Second District Court agreed:

              Subparagraph (b) allows for immediate payment for only
              cosmetic repairs, i.e., repairs for damages occurring above
              the ground. In contrast, subparagraph (b) provides that
              payment will not be made for subsurface stabilization and
              repair, i.e., damages occurring below the ground, until the
              insureds enter into a contract for the subsurface repairs. . . .

                     ....

              Thus, even if this case could be said to involve "a total breach
              of the contract," the Homeowners themselves chose to
              enforce the contract, not to rescind it. Based on the jury's
              finding of coverage, the trial court was obligated to enforce the
              contract, including the policy's restrictions on Citizens'
              obligations to pay for the cost of the repair for subsurface
              damages.

Id. at 733-34. Accordingly, the court reversed the "final judgment to the extent that it

awarded money damages payable to the Homeowners without recognizing Citizens's

right to withhold payment for the cost of the subsurface repairs until the Homeowners

enter into a contract for those repairs." Id. at 735. The Second District Court has reached

the same conclusion in several additional cases. See, e.g., Citizens Prop. Ins. Corp. v.

Simoneau, 197 So. 3d 70, 71 (Fla. 2d DCA 2016); Citizens Prop. Ins. Corp. v. Blaha, 194
So. 3d 411, 416 (Fla. 2d DCA 2016); Citizens Prop. Ins. Corp. v. Retz, 193 So. 3d 1084,

1084 (Fla. 2d DCA 2016).

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       During oral argument in this case, the parties answered questions from the panel

regarding which party bears responsibility for paying the cost to repair the home above

the $225,900 policy limit, given that the jury determined that it would cost $445,000 to

stabilize Ringelman's home. Counsel for Citizens made the following specific

representation:

              We have asked for a repair contract to perform the repairs that
              the jury found were necessary and we have asked for that
              contract so that we can pay which means we will exceed our
              policy limits. That is consistent with the statute. . . . As soon
              as they bring the contract, the process begins.

In light of counsel's statements, we find that Citizens has waived its option under section

3.b.5(e) of the insurance policy to tender the policy limits in lieu of paying in excess of

those limits to complete the repairs.2 Accordingly, we affirm the final judgment but remand

with instructions to enter a corrected order reflecting that, when Ringelman provides

Citizens with a signed contract to complete the necessary repairs, Citizens shall pay that

amount instead of tendering the policy limits.

       AFFIRMED and REMANDED with Instructions.

TORPY, WALLIS and LAMBERT, JJ., concur.

       2  Case law supports the proposition that counsel's representations during oral
argument are binding. See Freeman v. BellSouth Telecomms., Inc., 954 So. 2d 45, 46
(Fla. 1st DCA 2007) ("At oral argument, BellSouth stipulated that if this court were to
reverse on appeal, BellSouth would abide by the original jury verdict and abandon its
motion for remittitur."); Sound Builders of St. Petersburg, Inc. v. Hanlon, 439 So. 2d 276,
276 (Fla. 2d DCA 1983) ("At oral argument, counsel for both parties stipulated that one
of the final judgments should be stricken."); Renfroe v. Renfroe, 326 So. 2d 211, 211 (Fla.
4th DCA 1976) ("On oral argument before the court, counsel for the respective parties
stipulated that such payments were to be made weekly. Accordingly the final judgment is
modified to this effect.").

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