State Farm Florida Insurance Company v. Lime Bay Condominium, Inc., 187 So. 3d 932

Background

In Oct. 2005 Hurricane Wilma damaged Lime Bay Condominium roofs; Lime Bay submitted a claim to State Farm and provided a contractor’s replacement estimate (~$1.5M) but no supporting proof that replacement was required.
State Farm inspected multiple times, concluded repairs (not replacement) were warranted, and paid $6,940.46 in Sept. 2006 after deductible adjustments.
Lime Bay served a Civil Remedy Notice in Feb. 2007; State Farm demanded appraisal under the policy. Lime Bay refused appraisal pending proof State Farm had given statutorily required mediation notice. Lime Bay filed suit in March 2007 without participating in appraisal.
Court-ordered appraisal produced an award ~ $1.1M; after deductible and prior payment State Farm paid Lime Bay $608,141.41. Lime Bay moved to confirm the award and for attorney’s fees; State Farm moved for summary judgment asserting the appraisal resolved the claim. Trial court granted Lime Bay judgment and fees, finding State Farm’s post-suit payment amounted to a confession of judgment and that State Farm had not shown compliance with mediation-notice statute.
On appeal, the Fourth DCA reversed and remanded, holding material factual disputes exist about whether State Farm gave timely mediation notice, whether Lime Bay was compelled to sue (necessary to apply confession-of-judgment/fee doctrines), and that the trial court abused its discretion by granting a protective order shielding Lime Bay’s relevant discovery.

Issues

Issue	Plaintiff's Argument (Lime Bay)	Defendant's Argument (State Farm)	Held
Whether State Farm’s post-suit payment of the appraisal award is an automatic confession of judgment	Payment after suit is a confession of judgment and entitles Lime Bay to judgment and fees	Payment resolved the claim via contract appraisal; not an automatic confession because appraisal was a contractual remedy	Reversed: payment is not automatic confession; inquiry is whether insured was forced to litigate — material fact dispute exists
Whether Lime Bay was required to participate in appraisal before filing suit once State Farm demanded appraisal	Lime Bay need not participate because State Farm failed to prove compliance with §627.7015(2) mediation-notice requirements	Appraisal clause + suit-precondition clause require participation after insurer’s written demand; State Farm did provide mediation notice	There are factual disputes whether State Farm gave timely mediation notice; notice requirement ripens when insurer is on notice of a disputed, material-fact claim
Whether State Farm complied with §627.7015(2) (mediation-notice) and timing of that notice	Notice was untimely (sent months after claim filed), so Lime Bay was excused from appraisal	Notices sent in Mar. and May 2006 satisfied the statute once a dispute over a material fact arose; statute construed with §627.7015(9)	Whether notice was timely is a genuine issue of material fact for remand
Whether the trial court properly granted Lime Bay a protective order against State Farm’s discovery requests	Discovery irrelevant because payment was automatic confession; protect Lime Bay from burdensome discovery	Discovery into communications with contractors/public adjusters and other evidence is relevant to whether Lime Bay continued to dispute the claim and was forced to sue	Protective order was an abuse of discretion because discovery was relevant to whether Lime Bay was compelled to litigate; remand for further proceedings

Key Cases Cited

Jaffer v. Chase Home Fin., 155 So. 3d 1199 (Fla. 4th DCA 2015) (summary-judgment standard; view evidence in light most favorable to nonmoving party)
Wolf v. Sam’s E., Inc., 132 So. 3d 305 (Fla. 4th DCA 2014) (summary-judgment standard cited)
Clifton v. United Cas. Ins. Co. of Am., 31 So. 3d 826 (Fla. 2d DCA 2010) (confession-of-judgment penalizes insurer only when insured was forced to litigate)
State Farm Fla. Ins. Co. v. Lorenzo, 969 So. 2d 393 (Fla. 5th DCA 2007) (doctrine not applied when insured was not forced to sue)
Basik Exps. & Imps., Inc. v. Preferred Nat’l Ins. Co., 911 So. 2d 291 (Fla. 4th DCA 2005) (refusing confession-of-judgment where insurer complied with obligations)
Lewis v. Universal Prop. & Cas. Ins. Co., 13 So. 3d 1079 (Fla. 4th DCA 2009) (attorney’s fees may be appropriate when suit compels insurer to invoke appraisal and insured recovers substantially more)
Travelers Indem. Ins. Co. of Ill. v. Meadows MRI, LLP, 900 So. 2d 676 (Fla. 4th DCA 2005) (insured entitled to fees where litigation forced insurer to resolve claim)
Goff v. State Farm Fla. Ins. Co., 999 So. 2d 684 (Fla. 2d DCA 2008) (award of fees where lawsuit forced insurer to request appraisal and pay additional sums)
Katzman v. Rediron Fabrication, Inc., 76 So. 3d 1060 (Fla. 4th DCA 2011) (abuse-of-discretion standard for protective orders)