Court Opinion

ID: 5116316
Source: CourtListenerOpinion
Date Created: 2021-10-06 15:03:08.936626+00
Date Added: 2024-06-11T08:21:56.142400
License: Public Domain

Third District Court of Appeal
                               State of Florida

                        Opinion filed October 6, 2021.
       Not final until disposition of timely filed motion for rehearing.

                            ________________

                              No. 3D21-356
                        Lower Tribunal No. 20-6505
                           ________________

             State Farm Florida Insurance Company,
                                  Appellant,

                                     vs.

                            Vernon Shotwell,
                                  Appellee.

     An Appeal from a non-final order from the Circuit Court for Miami-Dade
County, Barbara Areces, Judge.

      Law Offices of Ubaldo J. Perez, Jr., P.A., and Ubaldo J. Perez, Jr.;
Russo Appellate Firm, P.A., Elizabeth K. Russo and Paulo R. Lima, for
appellant.

      Quintana Law, P.A., and Brittany Quintana Marti; Alvarez, Feltman, Da
Silva & Costa, PL, and Paul B. Feltman, for appellee.

Before FERNANDEZ, C.J., and LOGUE, and BOKOR, JJ.

     FERNANDEZ, C.J.
       State Farm Florida Insurance Company appeals the trial court’s order

compelling State Farm to pay Vernon Shotwell, the insured, the full appraisal

award. Upon our review of the record, we affirm in part and reverse in part.

  I.     Background

       Shotwell purchased an “all-risk” home insurance policy from State

Farm. During the policy period on or about December 22, 2019, Shotwell’s

master bathroom toilet overflowed causing significant water damage to the

master bath and bedroom area and adjoining areas of the house. State Farm

acknowledged coverage of a certain amount of water damage, offered

mitigation services, and issued payment to Shotwell in the amount of

$888.72, after subtracting depreciation and the deductible.

       Shotwell hired a public adjuster to assess the property damage, who

worked with All 4 One Plumbing & Construction to determine the underlying

cause of the toilet overflow. The plumbing report concluded that the overflow

was due to a blockage in a sagging and corroded pipe located under the

kitchen cabinets that serviced the master bathroom. To access the pipe, the

kitchen cabinets and the slab would have to be torn out and replaced. The

public adjuster also provided a list of additional damages not covered in

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State Farm’s estimate. An estimate was prepared by Intellaclaim for the

amount of $138,202.21.

        On February 22, 2020, State Farm sent a second letter adjusting the

estimate and issued a second payment for $1,406.34. The letter advised that

while water damage from the overflow was covered, the repairs to the drain

line set forth in All 4 One Plumbing & Construction’s report were not covered,

citing to relevant policy provisions. On February 25, 2020, State Farm sent

a third letter issuing payment to Shotwell for the video diagnostic of the drain

line.

        Shotwell filed a breach of contract action claiming that State Farm

failed to indemnify him for all losses, and the estimate was insufficient to fund

all necessary repairs. In response, State Farm filed a motion to compel

appraisal and to dismiss or stay the action, pursuant to the policy. The trial

court granted the motion and ordered dismissal based on the parties’

agreement to proceed with appraisal. The trial court appointed an umpire to

oversee the appraisal process.

        On September 25, 2020, the appraiser and umpire entered a line item

appraisal for the total amount of $138,912.08. State Farm paid only a portion

of the appraisal amount, citing to the Tear Out provision under Additional

Coverages and the Additional Living Expense (ALE) provision under

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Property Coverages. Shotwell moved to compel payment for the full amount

of the appraisal award, for interest, and for sanctions.

         After a hearing on the motion, the trial court entered an order granting

Shotwell’s motion to compel payment for the full amount of the appraisal

award, providing “coverage for damages due to the toilet overflow.” This

appeal followed.

   II.      Analysis

         This Court has affirmed the separate and distinct roles of appraisers

and of the judiciary in insurance disputes:

         The appraisers determine the amount of the loss, which includes
         calculating the cost of repair or replacement of property
         damaged, and ascertaining how much of the damage was
         caused by a covered peril ... [and] [t]he court decides whether
         the policy provides coverage for the peril which inflicted the
         damage, and for the particular property at issue[.]

People’s Tr. Ins. Co. v. Garcia, 263 So. 3d 231, 234 (Fla. 3d DCA 2019)

(quoting Citizens Prop. Ins. Corp. v. River Manor Condo. Ass’n, Inc., 125

So.3d 846, 854 (Fla. 4th DCA 2013)). “[I]ssues pertaining to insurance

coverage present questions of law subject to de novo review.” Herrera v.

C.A. Seguros Catatumbo, 844 So. 2d 664, 665 (Fla. 3d DCA 2003).

         The issues before this Court are: 1) whether the Tear Out provision

covers tearing out and replacing the building structure needed to access the

pipe, 2) whether the Tear Out provision covers repairing and replacing the

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pipe, and 3) whether the ALE provision provides coverage and when

payment is to be issued.

   1. The Building Structure

      Upon reading the plain language of the policy, we hold that the Tear

Out provision does not cover the cost of tearing out and replacing the kitchen

cabinets and slab.

      Under Section I – Losses Insured, Coverage A – Dwelling, the policy

states that certain losses will be covered “unless the loss is excluded or

limited in SECTION I – LOSSES NOT INSURED or otherwise excluded or

limited in this policy.” (Emphasis added). Under Section I, Additional

Coverages, the Tear Out provision provides additional coverage for tear out

of the building structure but narrowly limits the terms of that coverage. The

Tear Out provision provides:

      14. Tear Out. If a loss insured to Coverage A property is caused
      by water, steam, or sewage escaping from a system or appliance
      we will also pay the reasonable cost you incur to tear out and
      replace only that particular part of the building structure
      necessary to gain access to the specific point of that system
      or appliance from which the water, steam or sewage escaped.
      We will not pay for the cost of repairing or replacing the system
      or appliance itself. This coverage does not increase the limit
      applying to Coverage A property.

(Emphasis added). The plain language of this provision is very narrow: “only

that particular part,” “necessary,” “the specific point,” “from which the water,

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steam or sewage escaped.” As the order on appeal provides, “[T]here was

coverage for damages due to the toilet overflow,” versus due to a pipe

rupture. (Emphasis added). The specific point from which the water/sewage

escaped is from the toilet. Even if we consider the pipe itself, the specific

point in which the water/sewage escaped from the pipe is at the end of the

pipe into the toilet. The water did not escape from the corroded pipe under

the kitchen cabinets. Because the language is so specific, we find it was

error for the trial court to determine that the Tear Out provision encompassed

coverage of tearing out and replacing the kitchen cabinets and slab to access

the pipe.

   2. The Corroded Pipe

      The Tear Out provision unequivocally states, “We will not pay for the

cost of repairing or replacing the system or appliance itself.” Additionally, the

policy specifically excludes coverage for “[d]amage caused by wear/tear,

decay, corrosion, rust, deterioration and inadequate maintenance,” taken

from Section I – Losses Not Insured 1(g)-(h) and 3(a)-(c). Therefore, the trial

court erred in determining that the policy covered the cost of repairing and

replacing the corroded pipe.

   3. The ALE Awards

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      The ALE provision applies to two appraisal awards. The first ALE

award pertains to the duration of time it took to the tear out and replace the

building structure and the corroded pipe. Because neither the pipe itself nor

the tear out of the building structure are covered under the policy, this ALE

award is also not covered by the policy. Therefore, the trial court erred in

determining that the first ALE award is covered by the policy.

      The second ALE award pertaining to the duration of time it took to

repair the water damaged areas caused by the toilet overflow was rightly

awarded. State Farm contends that it is not required to pay for ALE in this

instance until it is “incurred.” The ALE provision, under Section I – Property

Coverages, Coverage C – Loss of Use, is provided as follows:

      Additional Living Expense. When a loss caused by a peril
      described in Section I – LOSSES INSURED causes the
      residence premises to become uninhabitable, we will pay the
      reasonable and necessary increase in cost incurred by an
      insured to maintain their normal standard of living for up to 24
      months. Our payment is limited to incurred costs for the shortest
      of: The time required to repair or replace the premises; The time
      required for your household to settle elsewhere; or 24 months.
      This period of time is not limited by the expiration of this policy.

(Emphasis added). Though the provision does state “incurred,” the provision

is without a requirement that the insured submit receipts or any other

documentation verifying the cost incurred. Additionally, requiring the trial

court to examine extrinsic evidence when the amount of the ALE award has

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already been determined by appraisal is problematic. State Farm essentially

argues that the policy requires receipts but concedes that the amounts on

those receipts do not matter. Because this demand goes beyond the plain

language of the provision, the trial court correctly determined that the second

ALE award is covered by the policy and immediately payable.

   III.      Conclusion

          For the reasons stated, we reverse and remand the order on appeal

only as to: 1) payment for tearing out and replacing the building structure, 2)

payment for repairing and replacing the corroded pipe, and 3) payment of

the related ALE amount. We affirm as to all other issues pertaining to the

order on appeal.

          Affirmed in part; reversed in part.

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