Court Opinion

ID: 771685
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:55:15+00
Date Added: 2024-06-11T13:18:22.083317
License: Public Domain

236 F.3d 1282 (11th Cir. 2001)
Floyd JACOBS, Ruth Jacobs, his wife, Plaintiffs-Counter-Defendants-Appellees,v.NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Defendant-Counter-Claimant-Appellant.
Nos. 99-4301, 99-10529.
United States Court of Appeals, Eleventh Circuit.
January 4, 2001.January 16, 2001.

Appeals from the United States District Court for the Southern District of  Florida. (No. 97-01485-CV-DLG), Donald L. Graham, Judge.
Before MARCUS, WILSON and MAGILL*, Circuit Judges.
MAGILL, Circuit Judge:

1
Floyd and Ruth Jacobs filed suit against Nationwide Mutual Fire Insurance  Company ("Nationwide") in Florida state court, seeking appraisal under the terms  of their Florida insurance contract. Nationwide removed the action to federal  district court based on diversity jurisdiction. The district court granted the  Jacobs' motion for summary judgment, compelling appraisal, and granted the  Jacobs' motion for attorney fees. Nationwide appeals both orders. The line of  Florida cases upon which the district court relied in reaching its decision has  since been overruled by the Third District Court of Appeal in United States  Fidelity & Guaranty Co. v. Romay, 744 So.2d 467 (Fla. 3d DCA 1999), which holds  that insureds must fulfill all of their post-loss obligations before seeking  appraisal. Accordingly, we vacate the order of the district court and remand for  further proceedings consistent with this opinion.

I.

2
On August 24, 1992, Hurricane Andrew caused substantial damage to the home of  Floyd and Ruth Jacobs. A homeowners' insurance policy issued by Nationwide  covered the Jacobs' property. After the Jacobs notified Nationwide of the  damage, Nationwide investigated their claim, adjusted the loss, and paid the  Jacobs approximately $37,000 in 1992.

3
In late 1996, the Jacobs hired East Coast Appraisers, Inc. ("East Coast") to  assess the damage to their home and make a supplemental claim on their behalf.  As a result of East Coast's appraisal, the Jacobs served Nationwide with a  demand letter on November 9, 1996, stating that Hurricane Andrew had caused  damage to their home totaling $104,120.27. The letter also stated that the  failure to pay the demand within five days would constitute a disagreement as to  the amount of the loss, entitling the Jacobs to appraisal under the insurance  contract, which provided that if the Jacobs and Nationwide:

4
fail to agree on the amount of loss, either can demand that the amount be set  by appraisal. If either makes a written demand for appraisal, each will select  a competent, independent appraiser and notify the other of the appraiser's  identity within 20 days of receipt of the written demand. The two appraisers  will then select a competent, impartial umpire. If the appraisers cannot agree  upon an umpire within 15 days, [the Jacobs or Nationwide] can ask a judge of a  court of record in the state where the residence premises is located to select  an umpire. The appraisers will then set the amount of the loss. If the  appraisers submit a written report of an agreement to [Nationwide], the amount  agreed upon will be the amount of the loss. If the appraisers fail to agree  within a reasonable time, they will submit their differences to the umpire.  Written agreement signed by any two of these three will set the amount of the  loss.

5
On November 25, 1996, Nationwide responded to the Jacobs' demand by requesting a  sworn proof of loss and other documentation of the claim. After the Jacobs  failed to comply with Nationwide's request, Nationwide repeated its request on  January 2, 1997, and also asked that the Jacobs submit to examinations under  oath, as required by the insurance contract. The Jacobs failed to appear at  scheduled examinations on February 7, 1997 and February 27, 1997, but eventually  submitted to the examinations under oath on March 26, 1997.

6
The parties disagree about what transpired at the examinations. Nationwide  contends that the Jacobs refused to submit a sworn proof of loss, produce  requested documents, or answer questions about their finances. Nationwide  further contends that the Jacobs deferred to their appraiser, East Coast, on a  number of issues, but refused to make East Coast available for examination under  oath. The Jacobs assert that they "submitted to approximately four (4) hours of  interrogation ... and produced all of the documents requested by Nationwide,  which the Jacobs had in their possession, other than personal financial records,  which the Jacobs objected to." The Jacobs also claim that they answered  Nationwide's questions to the best of their ability and that the only Nationwide  requests with which they failed to comply were: (1) questions and document  requests concerning their personal finances; and (2) the request for a sworn  proof of loss.

7
After the examinations, the Jacobs filed suit in Florida state court, seeking to  compel arbitration under the appraisal provision in their insurance contract.  Nationwide removed the action to federal district court based on diversity  jurisdiction, and filed a third amended answer, affirmative defenses, and a  counterclaim. Nationwide alleged, inter alia, that the Jacobs had failed to meet  their post-loss duties under the insurance contract. The relevant portion of the  contract states:

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2.Your Duties after Loss. In case of a loss, you must:

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a. give immediate notice to us or our agent....

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b. protect the property from further damage. You must make repairs required to  protect the property; also, keep a record of repair expenses.

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c. prepare a list of damaged personal property showing in detail the quantity,  description, actual cash value, and amount of loss. Attach all bills and  receipts that support the figures.

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d. as often as we reasonably require:

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(1) exhibit the damaged property;

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(2) submit to an examination under oath; and

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(3) provide records and documents we request and permit us to make copies.

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e. submit to us, within 60 days after we request, your signed, sworn proof of  loss which sets forth, to the best of your knowledge and belief:

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(1) the time and cause of loss.

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

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(3) other insurance that may cover the loss.

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

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(5) detailed estimates for repair of damage.

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(6) a list of damaged personal property described in 2c.

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(7) receipts for additional living expenses and records supporting the fair  rental value loss....

24
As a result of their failure to fulfill their post-loss duties, Nationwide  asserted that the Jacobs had breached the insurance policy, that the policy was  void, and that the Jacobs had forfeited their right to appraisal or recovery  under the policy.

25
On January 21, 1998, Nationwide moved for summary judgment on its affirmative  defenses. The Jacobs responded and moved for summary judgment on both their  application to compel arbitration and Nationwide's affirmative defenses. On May  19, 1998, the district court granted the Jacobs' motion for summary judgment on  the application to compel arbitration, and denied both motions for summary judgment on Nationwide's affirmative defenses. Nationwide then moved for  reconsideration of the district court's order.

26
On February 13, 1999, the district court granted Nationwide's motion for  reconsideration in part, holding that under Allstate Insurance Co. v. Sierra,  705 So.2d 119 (Fla. 3d DCA 1998), and its progeny, the Jacobs were required to  file a sworn proof of loss to be entitled to appraisal. The court thus ordered  the Jacobs to submit a proof of loss prior to appraisal. On February 17, 1999,  Nationwide moved for clarification of the district court's order. On November  19, 1999, the court denied Nationwide's motion, stating that its February 13  order was a final determination regarding the Jacobs' application to compel  arbitration and denying as moot Nationwide's defenses and counterclaims.

27
The Jacobs moved for attorney fees on February 24, 1999, and filed a sworn proof  of loss on March 5, 1999. The magistrate judge granted the Jacobs' motion for  fees on March 23, 1999. On April 5, 1999, the district court overruled  Nationwide's objections and approved the magistrate's order. Nationwide filed  two notices of appeal, one from the district court's order compelling  arbitration and another from the award of attorney fees, and moved for a stay of  appraisal pending appeal. The district court granted Nationwide's motion for a  stay, but required posting of a $150,000 bond as a condition of the stay.

II.

28
The district court granted the Jacobs' application to compel appraisal,  conditioned only upon their filing of a sworn proof of loss statement. We review  this decision de novo. See Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc.,  10 F.3d 753, 756 (11th Cir.1993).

29
Nationwide asserts that the district court erred in ordering appraisal before  the Jacobs had satisfied all their post-loss obligations under the contract. In  reaching its decision, the district court relied on a line of Florida Third  District Court of Appeal cases holding that submission of a sworn proof of loss  statement is the sole condition that an insured must fulfill prior to invoking  its right to appraisal. See Allstate Ins. Co. v. Sierra, 705 So.2d 119 (Fla. 3d  DCA 1998); Llaguno v. ARI Mut. Ins. Co., 719 So.2d 311 (Fla. 3d DCA 1998).

30
On August 25, 1999, after Nationwide filed both of its notices of appeal, the  Third District Court of Appeal, sitting en banc, overruled Allstate Insurance  Company v. Sierra and its progeny. See United States Fidelity & Guar. Co. v.  Romay, 744 So.2d 467 (Fla. 3d DCA 1999).1 As in this case, the policy at issue  in Romay required the insureds to perform certain prerequisites before the  appraisal clause was triggered, such as: "submit a sworn proof of loss and  supporting documents; submit to an examination under oath; and make the property  available for inspection." Id. at 469. The insureds in Romay had failed to meet  any of the post-loss obligations other than submission of the sworn proof of  loss. Id. The trial court granted their petition to compel arbitration because,  under Sierra, filing of a sworn proof of loss was the only precondition to  appraisal. The insurer appealed, and the Third District altered its position  that an insured need only submit a sworn proof of loss to be entitled to  appraisal, instead holding that the insured must meet all post-loss obligations  imposed by the insurance policy in question before appraisal may be compelled.  See id. at 468.

31
Romay requires the Jacobs to fulfill all of their post-loss obligations under  the insurance policy with Nationwide before invoking their right of appraisal.  These obligations include: (1) providing immediate notice to the insurer; (2)  protecting the property from further damage; (3) exhibiting the damaged  property; (4) submitting to examination under oath; and (5) providing records  and documents requested by the insurance company. Accordingly, we must reverse  the district court's order holding that submission of a sworn proof of loss is  the sole precondition to appraisal.

III.

32
Nationwide asserts that the Jacobs have failed to fulfill their post-loss  obligations, and that, as a result, this court must remand with directions to  enter judgment for Nationwide. Nationwide also contends that the district court  erred in failing to adjudicate its affirmative defenses. The Jacobs respond that  they have fully satisfied Romay by complying with their post-loss obligations,  and that the district court fully adjudicated Nationwide's defenses in its  February 13, 1999 and November 19, 1999 orders. Accordingly, the Jacobs contend,  they should be permitted to immediately invoke their right to appraisal.

33
The insurance contract between the parties requires the Jacobs to fulfill  several post-loss duties, including: (1) submitting to an examination under  oath; and (2) supplying Nationwide with records and documents at its request.  Nationwide conducted examinations of the Jacobs under oath on April 4, 1997. At  their examinations under oath, the Jacobs answered some questions but refused,  or were unable, to answer others. Also on April 4, the Jacobs provided  Nationwide with some of the documents it had requested but objected to the  production of others.

34
Thus, there remain genuine issues of material fact regarding whether, by  responding to some, but not all, of Nationwide's questions and document  requests, the Jacobs have fulfilled their post-loss duties and thus satisfied  the requirements of Romay. Accordingly, we must remand to the district court to  determine whether the Jacobs have fulfilled their post-loss obligations, and  whether the Jacobs are entitled to appraisal.

35
In addition, it appears that as a result of its conclusion that submission of a  sworn proof of loss was the only precondition to appraisal, the district court  summarily denied as moot Nationwide's affirmative defenses, which arose from the  Jacobs' failure to fulfill their other post-loss obligations. Based on the  foregoing, we must reverse this denial and remand to the district court with  instructions to fully adjudicate Nationwide's affirmative defenses.

IV.

36
In granting the Jacobs' motion for attorney fees, the court found that because  the Jacobs obtained a declaratory judgment compelling appraisal, they were  prevailing parties and thus entitled to attorney fees. Under the new standard  announced in Romay, the Jacobs may not have fulfilled the preconditions to  appraisal, and thus may no longer be prevailing parties. Accordingly, we must  vacate the district court's award of attorney fees, pending its determination of  whether the Jacobs have satisfied the requirements of Romay.

V.

37
For the foregoing reasons, we REVERSE the judgment of the district court and  REMAND for further proceedings consistent with this opinion.

NOTES:

*
 Honorable Frank J. Magill, U.S. Circuit Judge for the Eighth Circuit, sitting by  designation.

1
 Although Romay was decided after the district court rendered summary judgment in  this case, both parties agree that it governs the result in this case.