Castro v. Homeowners Choice Property & Casualty Insurance Company
228 So. 3d 596
| Fla. Dist. Ct. App. | 2017Background
- Homeowners Castro and Lopez discovered suspected sinkhole damage on May 4, 2010, and filed a claim with Homeowners Choice.
- Homeowners Choice retained SDI Engineering, which found no sinkhole activity, and the insurer denied coverage on July 12, 2010, citing an earth-movement exclusion.
- Before denial, the insurer did not request examination under oath (EUO), sworn proof of loss, or documents; the denial letter made no mention of those policy duties.
- In 2014 the homeowners obtained an FTE engineering report concluding sinkhole damage, sent it to the insurer, and asked that the denial be reconsidered.
- The insurer then requested EUOs, proof of loss, and FTE documents; homeowners filed suit for breach of contract on December 18, 2014, before complying.
- The trial court granted summary judgment for the insurer based on homeowners’ failure to comply with policy conditions precedent; the appellate court reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether insurer can later affirm conditions precedent after it unconditionally denied coverage | Castro: insurer waived conditions by denying coverage, so failure to give EUO/proof of loss cannot bar suit | Homeowners Choice: homeowners "reopened" claim by submitting FTE report and must comply with conditions, failure is material breach | Court: When insurer unconditionally denies coverage, it cannot later enforce policy conditions precedent to bar suit; denial waives those requirements |
| Whether submission of a new engineering report and request to reconsider reopens the claim and revives pre-suit conditions | Castro: providing the FTE report did not legally reopen the claim or revive previously uninvoked conditions | Homeowners Choice: the new report reopened the claim, allowing insurer to insist on EUOs and proofs before suit | Court: Policy contains no definition or notice that submitting new information reopens a claim; mere submission does not revive conditions |
| Whether insureds were required to provide contrary expert report before filing suit | Castro: no obligation to produce the FTE report before filing; suit may proceed | Homeowners Choice: (implied) homeowners should have presented report and complied with conditions before suing | Court: Insureds are not required to produce a contrary report before suing; they may litigate denial even if they obtained a later report |
| Standard for summary judgment on these facts | Castro: genuine issues of material fact exist and insurer is not entitled to judgment as matter of law | Homeowners Choice: failure to meet conditions is a clear contractual bar entitling judgment | Court: De novo review; genuine issue existed as insurer had previously denied liability, so summary judgment for insurer was improper |
Key Cases Cited
- Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126 (Fla. 2000) (standard of review for summary judgment)
- Tower Hill Select Ins. Co. v. McKee, 151 So. 3d 2 (Fla. 2d DCA 2014) (insurer’s unconditional denial of coverage waives policy conditions precedent to suit)
- Indian River State Bank v. Hartford Fire Ins. Co., 35 So. 228 (Fla. 1903) (denial of liability effects waiver of proofs of loss)
- Hartford Accident & Indem. Co. v. Phelps, 294 So. 2d 362 (Fla. 1st DCA 1974) (insurer denying liability waives proof-of-loss requirement)
- Citizens Prop. Ins. Corp. v. Munoz, 158 So. 3d 671 (Fla. 2d DCA 2014) (insured need not produce a contrary report before filing suit)
- Redland Ins. Co. v. Cem Site Constructors, Inc., 86 So. 3d 1259 (Fla. 2d DCA 2012) (summary-judgment standards reiterated)