271 So. 3d 1013
Fla. Dist. Ct. App.2019Background
- Hershel and Betty Bryant purchased a surplus-lines homeowner policy from GeoVera covering a pipe leak on April 28, 2014; the policy contains a $1,000 sublimit for long-term water leakage and a $5,000 combined sublimit for mold/rust/rot.
- GeoVera inspected, paid $6,000 pre-suit, and sent a formal claim response asserting the $1,000 leakage sublimit applied and limiting coverage unless additional information reopened the claim; GeoVera requested a sworn proof of loss (60-day deadline).
- The Bryants filed suit (breach of contract, petition for appraisal, statutory bad faith) and then provided a sworn proof of loss the same day they amended the complaint.
- The parties agreed to a line-item appraisal during litigation; the appraisal award itemized dwelling, mold, and mitigation amounts and did not allocate any item to the $1,000 leakage sublimit.
- GeoVera paid the appraisal award during litigation (including amounts exceeding the $1,000 sublimit). Trial court granted summary judgment for GeoVera on breach and bad faith; the Fourth DCA reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did post-suit payment of appraisal award constitute a confession of judgment? | Payment shows GeoVera reversed an incorrect pre-suit denial (confession entitling Bryants to fees). | Payment followed policy procedures and Bryants filed prematurely, so payment isn't a confession. | Yes; payment during suit functioned as a confession that GeoVera had incorrectly invoked the $1,000 leakage sublimit. |
| Did GeoVera’s pre-suit invocation of the $1,000 sublimit and $6,000 payment waive the sworn proof-of-loss requirement? | Bryants: GeoVera’s pre-suit repudiation made proof of loss futile, so proof requirement waived. | GeoVera: Proof-of-loss remained a condition precedent; pre-suit payments/sublimits do not waive it. | Yes; partial denial on grounds other than lack of proof waived the proof-of-loss requirement. |
| Could Bryants have been required to invoke appraisal pre-suit despite coverage dispute? | Bryants: Coverage defense made appraisal and proof futile; they had immediate right to sue. | GeoVera: Appraisal and policy procedures were followed; no bad faith. | Coverage dispute (application of sublimit) is a judicial issue; Bryants were not required to invoke appraisal pre-suit. |
| Was summary judgment proper on statutory bad faith? | Bryants: Confession and waiver created ripe basis for bad faith claim. | GeoVera: Participation in appraisal and timely payment shows good faith; bad faith is premature. | No; genuine issues of material fact remain whether GeoVera acted in good faith when it invoked the sublimit, so bad faith claim may proceed. |
Key Cases Cited
- Johnson v. Omega Ins. Co., 200 So. 3d 1207 (Fla. 2016) (post-suit payment can be treated as confession of judgment entitling insured to fees)
- Ivey v. Allstate Ins. Co., 774 So. 2d 679 (Fla. 2000) (incorrect denial of benefits, even if mistaken, can give rise to fees where denial is incorrect)
- Johnson v. Nationwide Mut. Ins. Co., 828 So. 2d 1021 (Fla. 2002) (coverage issues are judicial, not for appraisers)
- Lewis v. Universal Prop. & Cas. Ins. Co., 13 So. 3d 1079 (Fla. 4th DCA 2009) (appraisal followed by insured recovering additional sums can support attorney’s fees)
- Vest v. Travelers Ins. Co., 753 So. 2d 1270 (Fla. 2000) (bad faith requires insurer to act unreasonably in performance of express policy terms)
- Trafalgar at Greenacres, Ltd. v. Zurich Am. Ins. Co., 100 So. 3d 1155 (Fla. 4th DCA 2012) (bad faith action premature until coverage defenses resolved and extent of loss determined)
- Goldman v. United Servs. Auto. Ass’n, 244 So. 3d 310 (Fla. 4th DCA 2018) (timely payment of appraisal award during litigation does not always equal confession where insurer was unaware of insured’s dispute pre-suit)