Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.
Help support the publication of case reports on MoreLaw
Date: 07-10-2022
Case Style:
PROGRESSIVE AMERICAN INSURANCE vs GLASSMETICS, LLC, A/ A/ O DEVAN HAMMOND
Case Number: 2D21-488
Judge:
Morris Silberman
Court:
DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT
On Appeal From The County Court for Hillsborough County
Frances M. Perrone
Judge
Plaintiff's Attorney: Alexandra Valdes and Kurt T. Koehler of Cole, Scott & Kissane
Defendant's Attorney:
Tell MoreLaw About Your Litigation Successes and MoreLaw Will Tell the World.
Re: MoreLaw National Jury Verdict and Settlement
Counselor:
MoreLaw collects and publishes civil and criminal litigation information from the state and federal courts nationwide. Publication is free and access to the information is free to the public.
MoreLaw will publish litigation reports submitted by you free of charge
Info@MoreLaw.com - 855-853-4800
Description:
Tampa., Florida - Small Claims lawyer represented Appellee with a underpayment of an insurance claim Dispute.
Glassmetics, LLC, a/a/o Devan Hammond, filed a small
claims lawsuit in county court against Progressive American
Insurance Company for the alleged underpayment of an insurance
claim for repair of a damaged windshield. Progressive now
challenges a nonfinal order that denies Progressive's amended
motion to dismiss or, alternatively, motion to abate or stay and
motion to compel appraisal.
The trial court refused to enforce the insurance policy's
appraisal provision on a number of grounds, and Progressive raises
multiple issues on appeal.1
We reverse the order because the trial
court erroneously determined (1) that the appraisal provision was
against the public policy underlying section 627.428, Florida
Statutes (2016); (2) that the appraisal provision failed to provide
sufficient procedures and methodologies; (3) that Progressive waived
its appraisal right; (4) that the appraisal provision was
unenforceable because Progressive failed to prove that the insured
knowingly, voluntarily, and intelligently waived his rights of access
1
Based on our resolution, we need not address Progressive's
argument that the trial court impermissibly rewrote the insurance
policy by invalidating the appraisal provision.
3
to courts, to a jury trial, and to due process; and (5) that the
appraisal provision contains an ambiguity. In light of our
conclusions, we remand for further proceedings consistent with this
opinion.
I. FACTS AND PROCEDURAL HISTORY
This case involves a Progressive policy issued to Frank
Hammond as the named insured. Devan Hammond is listed as a
driver and resident relative. The effective date of the policy is
September 16, 2016. The appraisal provision provides:
If we cannot agree with you on the amount of a loss,
then we or you may demand an appraisal of the loss.
Within 30 days of any demand for an appraisal, each
party shall appoint a competent and impartial appraiser
and shall notify the other party of that appraiser's
identity. The appraisers will determine the amount of
loss. If they fail to agree, the disagreement will be
submitted to an impartial umpire chosen by the
appraisers, who is both competent and a qualified expert
in the subject matter. If the two appraisers are unable to
agree upon an umpire within 15 days, we or you may
request that a judge of a court of record, in the county
where you reside, select an umpire. The appraisers and
umpire will determine the amount of loss. The amount of
loss agreed to by both appraisers, or by one appraiser
and the umpire, will be binding. You will pay your
appraiser's fees and expenses. We will pay our
appraiser's fees and expenses. All other expenses of the
appraisal, including payment of the umpire if one is
selected, will be shared equally between us and you.
4
Neither we nor you waive any rights under this policy by
agreeing to an appraisal.
Devan had Glassmetics repair a damaged windshield and
assigned to Glassmetics his right to payment under the policy. On
December 1, 2016, Glassmetics sent an invoice for $187.25 to
Progressive. On December 12, 2016, Progressive issued a check for
$64.20. After cashing the check, Glassmetics filed suit in county
court on December 27, 2016, and alleged that Progressive had
breached the insurance policy by failing to pay the full value of
benefits under the policy. On February 16, 2017, Progressive filed a
notice invoking the appraisal provision and its motion to dismiss or
alternatively to stay and enforce appraisal. Glassmetics amended
its complaint, and Progressive filed its amended motion to dismiss
or, alternatively, motion to abate or stay and motion to compel
appraisal (the amended motion).
The trial court conducted a nonevidentiary hearing on the
amended motion. In the order now on appeal, the court noted that
Progressive had filed a copy of a presuit letter dated December 8,
2016, invoking its right to appraisal. The court found that a
disputed issue of fact remained as to whether Progressive actually
5
mailed or delivered the letter and properly invoked the appraisal
provision before Glassmetics filed suit. The court then determined
that apart from the presuit issue, Progressive waived its right to
compel appraisal by challenging Glassmetics' standing in the
amended motion, even though in that motion Progressive sought, in
the alternative, to compel appraisal. The court then ruled that the
appraisal provision was invalid because it violated the public policy
underlying section 627.428 that provides for an award of attorney's
fees to a prevailing insured. The court also ruled that the provision
was invalid and unenforceable because it lacks procedures and
methodologies to govern the appraisal process.
Further, the trial court ruled that the appraisal provision was
ambiguous based on its view that the retained rights clause
conflicts with the language that the determination of the amount of
loss would be binding. The trial court construed the retained rights
clause as preserving an "[i]nsured's contractual right to insist upon
receiving full payment up to the maximum amount allowable" under
the policy notwithstanding the provision that the appraisal
determination would be binding.
6
Although in its order the trial court stated that it was denying
Progressive's motion to compel appraisal without prejudice, the
order was in effect a denial with prejudice because the court found
the appraisal provision to be invalid and unenforceable. As a
result, Progressive was precluded from invoking its contractual
right to an appraisal.2
Progressive originally sought certiorari review of the order
denying its right to an appraisal in the circuit court. The case was
subsequently transferred to this court after the change in appellate
jurisdiction. See ch. 2020-61, § 3, Laws of Fla. (effective Jan. 1,
2021). This court has jurisdiction of this appeal from a nonfinal
order that determined Progressive's entitlement to appraisal under
the insurance policy. See art. V, § 4(b)(1), Fla. Const.; Fla. R. App.
P. 9.030(b)(1)(B); Fla. R. App. P. 9.130(a)(3)(C)(iv); Progressive Am.
2
The trial court presumably characterized the denial as one
without prejudice because the court found unresolved factual
issues that prevented the court from compelling an appraisal
without allowing the parties to conduct reasonable discovery and
without holding an evidentiary hearing. For example, the court
noted that evidence would be necessary to address the prohibitive
cost doctrine. Progressive does not challenge this ruling on appeal,
and we do not address it except to note that our opinion should not
be construed as precluding the parties and the trial court from
addressing this issue on remand.
7
Ins. v. Broward Ins. Recovery Ctr., LLC, 322 So. 3d 103, 104 (Fla.
4th DCA 2021) (citing Mallory v. Brinckerhoff, 312 So. 3d 944 (Fla.
4th DCA 2021)).
II. ANALYSIS
A. Public policy and section 627.428
Progressive contends that the trial court erred in concluding
that the appraisal provision violates the public policy underlying
section 627.428. We agree.
In making this argument, Progressive asserts that it invoked
appraisal via the letter of December 8, 2016, before Glassmetics
filed suit. The trial court correctly recognized that Progressive
needed to show the letter was sent but failed to do so. However, the
court found that Progressive invoked the appraisal "process during
the lawsuit by virtue of its alternative motion to compel appraisal."
The trial court determined that the appraisal provision violated
public policy based on section 627.428, which provides insureds
with an award of attorney's fees when they obtain a judgment
against an insurance company that underpaid a claim. Section
627.428(1), provides as follows:
8
(1) Upon the rendition of a judgment or decree by any of
the courts of this state against an insurer and in favor of
any named or omnibus insured or the named beneficiary
under a policy or contract executed by the insurer, the
trial court or, in the event of an appeal in which the
insured or beneficiary prevails, the appellate court shall
adjudge or decree against the insurer and in favor of the
insured or beneficiary a reasonable sum as fees or
compensation for the insured's or beneficiary's attorney
prosecuting the suit in which the recovery is had.
Section 627.428's purpose "is to discourage the contesting of
valid claims against insurance companies and to reimburse
successful insureds for their attorney's fees when they are
compelled to defend or sue to enforce their insurance contracts."
Ins. Co. of N. Am. v. Lexow, 602 So. 2d 528, 531 (Fla. 1992). In
addition to discouraging insurers "from withholding benefits on
valid claims," the statute further serves to "make an already
financially burdened insured whole again." Johnson v. Omega Ins.,
200 So. 3d 1207, 1209 (Fla. 2016). But section 627.428 also
"discourage[s] litigation and encourage[s] prompt disposition of valid
insurance claims without litigation." Goff v. State Farm Fla. Ins.,
999 So. 2d 684, 688 (Fla. 2d DCA 2008) (alterations in original)
(quoting Jerkins v. USF & G Specialty Ins., 982 So. 2d 15, 17 (Fla.
5th DCA 2008)).
9
Under section 627.428, "an incorrect denial of benefits,
followed by a judgment or its equivalent of payment in favor of the
insured, is sufficient for an insured to recover attorney's fees."
Johnson, 200 So. 3d at 1219; see also Barreto v. United Servs. Auto.
Ass'n, 82 So. 3d 159, 162 (Fla. 4th DCA 2012) ("Here, because the
insurer paid the full amounts claimed only after suit was filed, it
essentially confessed judgment."). "It is only when the claims
adjusting process breaks down and the parties are no longer
working to resolve the claim within the contract, but are actually
taking steps that breach the contract, that the insured may be
entitled to an award [of] fees under section 627.428." Hill v. State
Farm Fla. Ins., 35 So. 3d 956, 960 (Fla. 2d DCA 2010); see also
Goldman v. United Servs. Auto. Ass'n, 244 So. 3d 310, 311 (Fla. 4th
DCA 2018) (quoting Hill, 35 So. 3d at 960). The right to a fee award
"turns upon whether the filing of the suit served a legitimate
purpose." Barreto, 82 So. 3d at 162 (quoting Lewis v. Universal
Prop. & Cas. Ins., 13 So. 3d 1079, 1082 (Fla. 4th DCA 2009)).
For instance, in Goff the insureds were entitled to fees under
section 627.428 when their action "forced State Farm to request an
appraisal and to pay significant additional amounts." Goff, 999 So.
10
2d at 688. In contrast, when an insured filed suit after the insurer
had initiated the appraisal process, the insured was not entitled to
section 627.428 fees. See id. (citing Federated Nat'l Ins. v. Esposito,
937 So. 2d 199, 201-02 (Fla. 4th DCA 2006)).
Resolving disputes without litigation is the goal of the
appraisal process. SafePoint Ins. v. Hallet, 322 So. 3d 204, 207
(Fla. 5th DCA 2021); see also Esposito, 937 So. 2d at 201 (stating
that "the laudable goal of the appraisal process" is "to resolve
disputes without litigation"). The appraisal process does not entail
"legal work arising from an insurance company's denial of coverage
or breach of contract; it is simply work done within the terms of the
contract to resolve the claim." Hill, 35 So. 3d at 961. A fee award
under section 627.428 "should normally be limited to the work
associated with filing the lawsuit after the insurance carrier has
ceased to negotiate or has breached the contract and the additional
legal work necessary and reasonable to resolve the breach of
contract." Id.
Thus, section 627.428 and appraisal provisions both serve
public policy goals. "Because we hold the freedom to contract in
high regard, we carefully weigh the right to freely contract against
11
the legislative intent and the public policy it seeks to enact."
Hernandez v. Crespo, 211 So. 3d 19, 26 (Fla. 2016). "Contractual
provisions which contravene a statute or legislative intent are
injurious to the public good, violate public policy, and are therefore
unenforceable." Id. at 25.
In Hernandez, the court determined that a medical
malpractice arbitration agreement violated public policy when "it
exclude[d] required provisions of the Medical Malpractice Act." Id.
at 20-21. One of the provisions in the arbitration agreement was to
share arbitration costs equally rather than have the defendants
"assume most of the costs of arbitration as in the statutory
scheme." Id. at 27; see also Gessa v. Manor Care of Fla., Inc., 86 So.
3d 484, 493 (Fla. 2011) (concluding that provisions in an
arbitration agreement that limited noneconomic damages and
waived punitive damages violated public policy because they
"directly frustrate the remedies created by statute"); Cincinnati Ins.
v. Cannon Ranch Partners, Inc., 162 So. 3d 140, 143 (Fla. 2d DCA
2014) (determining that a retained rights clause in favor of the
insurer was permitted under Florida law and stating that the trial
court "could not have found the appraisal clause to be
12
unenforceable unless the clause violated either statutory law or
public policy").
Here, the trial court relied upon Hernandez as well as other
arbitration cases, such as Holt v. O'Brien Imports of Fort Myers, Inc.,
862 So. 2d 87, 90 (Fla. 2d DCA 2003), and Flyer Printing Co. v. Hill,
805 So. 2d 829, 832–33 (Fla. 2d DCA 2001). At oral argument,
Glassmetics' counsel asserted that Holt and Flyer Printing control
the present case.
In Holt, a provision on attorney's fees in the arbitration
agreement was contrary to statutes under which the car buyers
sued that provided a right to attorney's fees if they prevailed. See
862 So. 2d at 90. This court stated that "even if the Buyers prevail
on their claims they could be taxed with O'Brien Imports' attorney's
fees because O'Brien Imports obtained a court order compelling
arbitration." Id. Based in part on the attorney's fee provision, this
court determined that the arbitration agreement was unenforceable.
See id. at 89-90.
In Flyer Printing, this court determined that an arbitration
agreement that required an employee to shoulder half the costs and
fees associated with the arbitration was unenforceable. See 805 So.
13
2d at 833. This court explained that the arbitration "agreement
contravened [the employee's] statutory right to seek a full award of
her fees and costs" and therefore defeated the remedial purposes of
the statutes at issue. Id.
In contrast, Progressive's appraisal provision contains no
language concerning attorney's fees. As Progressive argues, there is
no right to attorney's fees in appraisal, even under section 627.428,
because there are no attorneys involved in appraisal and there is no
final judgment or its equivalent in the appraisal process. In
determining that Progressive's appraisal provision violated the
public policy of section 627.428, the trial court noted the small
amount in dispute in this case, $123.05. The trial court reasoned
that windshield shops must rely on contingency fee contracts to
pursue litigation for underpaid claims and are made whole by an
award of fees under section 627.428 when they prevail. Progressive
notes that if Glassmetics litigated and lost, even under a
contingency agreement, the litigation costs would exceed the
appraisal costs.
In Progressive American Insurance v. SHL Enterprises, LLC,
264 So. 3d 1013, 1017-18 (Fla. 2d DCA 2018), this court found no
14
merit in the argument that requiring a party to pay appraisal costs
violated the public policy of section 627.7288, which prohibits
imposing a deductible on a claim for windshield damage. Here,
Progressive recognizes that a "de facto deductible" is not at issue;
rather, it contends that appraisal costs are part of the claims
process and also do not constitute de facto attorney's fees. The cost
of appraisal is "a cost of doing business, i.e., a fee paid to a neutral
third party who is hired to help resolve a dispute about the amount
of the total loss." Id. at 1017. Like section 627.7288 in SHL
Enterprises, section 627.428 "contains no express prohibition
against requiring an insured to pay his or her own appraisal costs
where there is a dispute over windshield repair/replacement costs."
Id. This court concluded that when "the contracting parties have
freely contracted for" a provision that requires "each party to bear
its own appraisal costs in an insurance payment dispute," then
"they or their assignees may not rely on section 627.7288 to avoid
their responsibility to pay such costs." Id. at 1018.
Unlike arbitration cases that the trial court relied upon,
Progressive's appraisal provision does not address attorney's fees.
We conclude that the appraisal provision does not violate the public
15
policy behind the attorney's fee statute in section 627.428.
Therefore, the trial court erred in finding the appraisal provision
invalid and unenforceable on that basis. The statute's purpose is
not only to discourage the withholding of benefits on valid claims
and to make the insured whole but also to discourage litigation.
Appraisal provisions also serve the goal of reducing litigation.
We recognize the concern that the cost of the appraisal
process appears to far exceed the $123.05 at issue, and no
economical solution exists for windshield shops if insurance
companies underpay claims. But as noted in SHL Enterprises, "[i]f
the legislature intends for insurers to solely bear the costs of
appraisal in windshield damage claims, it knows how to express
that intention." Id.
B. Lack of procedures and methodologies
The trial court ruled in its conclusion that the appraisal
provision "is otherwise invalid and unenforceable due to its lack of
any procedures and methodologies governing the appraisal process
and the determinations of the appraisers and the umpire." The trial
court's ruling appears to invalidate Progressive's appraisal provision
in all cases. The trial court did not otherwise discuss the lack of
16
procedures and methodologies in the body of its order, other than to
cite two arbitration cases for the proposition that arbitration
agreements must provide the procedures for the arbitration process:
Greenbrook NH, LLC v. Estate of Sayre, 150 So. 3d 878, 881 (Fla. 2d
DCA 2014), and Premier Real Estate Holdings, LLC v. Butch, 24 So.
3d 708, 711 (Fla. 4th DCA 2009).
Neither party cites a case in the appraisal context on what is
required to be spelled out in an appraisal provision. Glassmetics
relies upon arbitration cases and cases from other areas of the law.
For instance, Glassmetics states the need for "identifiable and
enforceable rules governing a dispute resolution process" and cites
to Zelman v. Zelman, 175 So. 3d 871, 878 (Fla. 4th DCA 2015), but
that case dealt with due process in guardianship proceedings before
a judge.
Glassmetics contends that nothing in Progressive's policy
provides any procedural or substantive rules that will govern the
appraisal process. At the hearing, Glassmetics argued that the
appraisal provision leaves numerous questions unanswered.
Glassmetics summed up the alleged deficiencies as follows:
17
It doesn't explain, you know, even how we're going to
challenge if this second appraiser that they have
identified is biased or we have a problem with that
appraiser, maybe not competent or biased, what have
you. How do we go about challenging that? What rules
and procedures are going to govern once we're in their
appraisal process? Do we get to submit evidence? Do we
get to be heard? Do we have notice? Do the appraisers
get to talk to each other? Do they get to do their own
independent investigation? Is it completely ex parte? Is
it not ex parte? We don't know. Are there any ethical
standards? It's not stated in Progressive's policy. There's
not a single rule about it. We don't even know if the
rules of evidence apply. We don't know if there's any
kind of process for appeal. We don't know if the
decisions have to be supported by any evidence
whatsoever or whether they have to employ any type of
methodology for reaching that conclusion. We know
nothing about that process.
Progressive argued that the appraisal provision sets forth "the
relevant information that's necessary to go through the appraisal
process." Progressive distinguished an informal appraisal
proceeding from a formal arbitration hearing, relying upon Allstate
Insurance v. Suarez, 833 So. 2d 762 (Fla. 2002), and Citizens
Property Insurance v. Mango Hill # 6 Condominium Ass'n, 117 So. 3d
1226 (Fla. 3d DCA 2013).
In Suarez, the Florida Supreme Court determined that an
appraisal provision could not be construed as an arbitration
agreement so as to require a formal arbitration hearing. 833 So. 2d
18
at 765-66. The court explained, "It is clear from a plain reading of
the clause that an informal appraisal proceeding, not a formal
arbitration hearing pursuant to section 682.06, Florida Statutes
(1999), was intended and agreed upon by the parties in agreeing to
the appraisal provisions of the policy." Id. at 765. The Suarez court
concluded, "Once a trial court has determined that the appraisal
provisions of a contract of insurance have been properly invoked,
further proceedings should be conducted in accord with those
provisions, rather than by the wholly different proceedings
contemplated by an agreement to arbitrate." Id.
In Mango Hill, the court explained the differences between
arbitration and appraisal:
The differences between arbitration and appraisal
are well defined in this state. First and foremost, while
an agreement to arbitrate ordinarily encompasses the
disposition of the entire controversy between the parties,
an agreement for appraisal extends merely to the
resolution of the specific issues of actual cash value and
"amount of loss." Second, the appraisal process is an
informal one. There is no requirement that appraisers be
sworn. Appraisers generally are chosen for and expected
to act on their own skill and knowledge relating to the
matters being appraised. There is no obligation for
appraisers to give formal notice of their activities to the
parties or counsel, or to hear evidence. They even may
engage in ex parte investigation, so long as they
ultimately meet in good faith for the purpose of ironing
19
out individual differences. Finally, all issues other than
those contractually assigned to the appraisal panel are
reserved for determination in a plenary action.
Arbitrations, on the other hand, are quasi-judicial
proceedings. Although not conducted with the same
degree of formality as a judicial proceeding, arbitration
proceedings are impressed with the same procedural
safeguards. These safeguards are codified in substantial
part in the Florida Arbitration Code. Under the Florida
Arbitration Code, each party is entitled to a full hearing
in the presence of every other party, unless such right is
waived by agreement or conduct. The arbitrators must
meet together in each session, and may not engage in
independent investigation of the thing in issue. The
Arbitration Code guarantees to each party not only the
right to notice of each hearing session, but also the right
to counsel, the opportunity to present evidence, and the
right to cross-examine witnesses. Finally, unlike
appraisal, the arbitration panel may adjudge the case
only on what is presented to them in the course of the
proceeding.
Id. at 1229-30 (citations omitted).
Cases recognize that "appraisal clauses are often treated
similarly to arbitration clauses." Webb Roofing & Constr., LLC v.
FedNat Ins., 320 So. 3d 803, 806 (Fla. 2d DCA 2021) (applying the
reasoning from an arbitration case and determining that a postloss
assignee of an insurance policy was bound to comply with the
appraisal conditions in the insurance contract). However, this court
also recognized that "appraisal and arbitration differ in some
20
important respects," id. at 805, and that unlike the informal
process of appraisal, "arbitration is a quasi-judicial proceeding with
a degree of formal safeguards," id. at 805 n.3 (citing Mango Hill, 117
So. 3d at 1229-30).
Based on Mango Hill, Progressive argued that appraisal is an
informal process that "is not bound by a set of rules" and that the
appraisal provision gave the necessary details to complete the
process. For instance, the appraisal provision sets forth how
appraisal is invoked, how each party is to select a "competent and
impartial" appraiser with notice to the other party, how an impartial
and competent umpire who is a "qualified expert in the subject
matter" is selected if the appraisers disagree as to the amount of
loss, how any such disagreement as to the amount of loss is
resolved, and how the appraisal costs are divided. The provision
also limits the scope of appraisal to the amount of loss and states
that it is a binding determination.
A requirement for more explicit rules in the appraisal provision
is unnecessary for a process that the Florida Supreme Court has
called an informal one and when case law appears to answer many
of the questions Glassmetics contends are unanswered. We
21
conclude that the procedures for arbitration are not applicable to
appraisal based on Suarez and the differences between arbitration
and appraisal as set out in Mango Hill. And although it may be
helpful to provide more detail in an appraisal provision, we are
unable to conclude that the absence of such detail makes the
provision unenforceable. Thus, the trial court erred in finding the
appraisal provision to be invalid and unenforceable based on the
lack of procedures and methodologies.
C. Waiver of appraisal right
Glassmetics argued in the trial court that a waiver of the
appraisal right occurred because Progressive sought "dismissal of
the complaint for lack of standing and for failure to state a cause of
action." The court stated that by challenging standing, Progressive
was "requesting relief that is within the exclusive province of a court
to provide, and that relief is inconsistent with [Progressive's]
'alternative' request to compel the appraisal remedy." The trial
court concluded that these actions waived Progressive's right to
compel appraisal.
After Glassmetics filed its original complaint, Progressive filed
a notice of invoking its appraisal provision and a motion to dismiss
22
or, alternatively, to stay and enforce appraisal. In response to
Glassmetics' amended complaint, Progressive filed the amended
motion. The amended motion sought dismissal in paragraph 13
based on Glassmetics' failure to comply with the appraisal
provision. In paragraph 14, Progressive also sought dismissal for
"lack of standing, failure to state a cause of action/failure to comply
with Florida Civil Rules of Procedure 1.130 or Small Claims Rules
7.050(a)(1)." Progressive alternatively sought an order compelling
appraisal and abating or staying the proceedings.
At the hearing on the amended motion, Progressive argued for
dismissal based on the failure to comply with the appraisal
provision. Later, in commenting on its presuit letter that demanded
appraisal and reserved the right to assert defenses, Progressive
stated, "[A]s we are here today, we are not arguing over standing,
which of course, is different from coverage."
The determination of whether a party's litigation activity is
sufficient to waive its right to demand an appraisal is "on a case-bycase basis, focusing on whether the party acted inconsistently with
this right." Heritage Prop. & Cas. Ins. v. Superior Contracting & Env't
Specialties, LLC, 314 So. 3d 743, 746 (Fla. 2d DCA 2021). In
23
Heritage, this court determined that the insured's assignee waived
the right to appraisal when it "filed a complaint and
contemporaneously sought extensive discovery related to the same
issues that would be addressed in an appraisal" and when it replied
to the insurer's answer and affirmative defense after the trial court
had entered a stay. Id. This court concluded that the assignee's
conduct was inconsistent with the appraisal process and that the
assignee was "affirmatively participating in the litigation." Id.
In contrast, this court held in an arbitration case that the
filing of a motion to dismiss "directed to deficiencies in the
complaint" did not constitute "such an active participation in the
lawsuit as to" waive the right to compel arbitration. PrudentialBache Sec. v. Pauler, 488 So. 2d 894, 895 (Fla. 2d DCA 1986); see
also Houchins v. King Motor Co. of Fort Lauderdale, Inc., 906 So. 2d
325, 328 (Fla. 4th DCA 2005) ("[T]he filing and hearing on the
motion to dismiss directed to the sufficiency of the allegations of the
complaint did not constitute a waiver of the right to arbitrate.").
Further, in an appraisal case the Fourth District determined
that FIGA did not act inconsistently with its appraisal rights where
"FIGA asserted the right to an appraisal in its original motion to
24
dismiss and in all subsequent pleadings and at hearings." Fla. Ins.
Guar. Ass'n v. Castilla, 18 So. 3d 703, 704 (Fla. 4th DCA 2009).
"Asserting that the insured meet all other conditions precedent to
claiming a loss is not inconsistent with demanding an appraisal.
Claiming that the loss is not covered is also not inconsistent with a
demand for an appraisal." Id. at 705.
Here, it appears that Progressive sought dismissal in
paragraph 14 of its amended motion based on Glassmetics' failure
to attach documents to its pleading. See Fla. R. Civ. P. 1.130(a)
(requiring certain documents to be incorporated in or attached to
pleadings); Fla. Sm. Cl. R. 7.050(a)(1) ("If the claim is based on a
written document, a copy or the material part thereof shall be
attached to the statement of claim."). In addition, Progressive did
not argue for dismissal on the ground in paragraph 14 at the
hearing. Rather, Progressive sought dismissal based on
Glassmetics' failure to comply with the appraisal provision or, in the
alternative, to stay the case and compel appraisal. Under these
circumstances, the inclusion of paragraph 14 in Progressive's
amended motion did not waive Progressive's right to an appraisal.
25
Glassmetics also contended in the trial court that Progressive
waived its right to an appraisal by failing to select an impartial
appraiser. "Even if the insured is correct that the insurer appointed
an appraiser who was not competent, that is not conduct which is
inconsistent with the right to appraisal, and there is no legal basis
for asserting that the insurer had waived the right to appraisal."
Travelers of Fla. v. Stormont, 43 So. 3d 941, 945 (Fla. 3d DCA
2010). Thus, the fact that Glassmetics contended that Progressive's
initially chosen appraiser was not impartial does not waive
Progressive's right to appraisal.
Therefore, the trial court erred in determining that Progressive
waived its right to an appraisal.
D. Waiver of rights of access to courts, jury trial, and due
process
Progressive contends that the trial court also erred in
determining that it was "unable to enforce the appraisal provision at
this juncture" when Progressive had yet to present evidence that the
insured knowingly, voluntarily, and intelligently waived his rights of
access to courts, to a jury trial, and to due process. Progressive
also contends that the trial court erred in concluding that since
26
Devan Hammond was not the named insured, but rather a listed
driver, there was insufficient evidence to establish that the named
insured was authorized to waive these rights on behalf of the listed
driver.
We disagree with these determinations by the trial court.
"[T]he rights of access to courts and trial by jury may be
contractually relinquished subject to general contract
defenses . . . ." Hobby Lobby Stores, Inc. v. Cole, 287 So. 3d 1272,
1275 (Fla. 5th DCA 2020) (citing Glob. Travel Mktg., Inc. v. Shea,
908 So. 2d 392, 398 (Fla. 2005)). In addition, the insured did not
completely waive the right to a jury trial or the right of access to
courts. The waiver applies only to the amount of loss. This is in
contrast to Seifert v. U.S. Home Corp., 750 So. 2d 633, 642 (Fla.
1999), upon which the trial court relied. In Seifert, the arbitration
agreement in a contract between a home builder and buyer did not
expressly provide for arbitration of tort claims. Id. The supreme
court determined that to deprive the buyer of trial by jury, due
process, and access to courts "simply because she and her husband
signed a contract which contained an arbitration provision, the
language of which provides no indication that tort claims arising
27
under the common law were contemplated or included, would
clearly be unjust." Id.
Here, the appraisal provision contains a retained rights clause
that states, "Neither we nor you waive any rights under this policy
by agreeing to an appraisal." But the appraisal provision
specifically sets forth when appraisal is required and that "[t]he
amount of loss agreed to by both appraisers, or by one appraiser
and the umpire, will be binding." In addition to stating that the
amount of loss determined in appraisal is binding, the policy
further provides, "We may not be sued unless there is full
compliance with all the terms of this policy." Thus, the insured
waived his right to sue unless he complied with all policy terms,
which includes a binding determination on the amount of loss when
appraisal is invoked.
As to whether Devan Hammond waived rights concerning the
amount of loss, the policy also provides, "The action of one named
insured will be binding on all persons provided coverage under this
policy." Thus, Devan Hammond is bound by any actions taken by
the named insured, Frank Hammond, under the policy. As
Progressive argues, to determine otherwise would allow any listed
28
drivers to not comply with the terms of the policy and yet still
receive benefits, despite that the named driver who is responsible
for the premium would be bound by all terms.
In addition, Glassmetics is bound by the appraisal provision
as assignee. See Webb Roofing, 320 So. 3d at 807 ("Webb Roofing
received an assignment that entitled it to receipt of payment from
the insurance carrier, and concomitant with that right was its duty
to comply with the conditions of the contract that afforded it
payment. Therefore, we conclude that the assignment in this case
did not eliminate the duty of compliance with the conditions
imposed by the insurance contract, including appraisal, and the
trial court did not err in granting the motion to compel appraisal.").
E. Clauses on retained rights and binding amount of loss
Progressive contends that the trial court erred in concluding
that the appraisal provision is ambiguous based on the retained
rights clause and the clause stating that the amount of loss
determined in appraisal is binding. Citing cases concerning "oneway" retained rights clauses, Progressive argues that a retained
rights clause does not render an appraisal provision ambiguous or
unenforceable. See State Farm Fire & Cas. Co. v. Licea, 685 So. 2d
29
1285, 1288 (Fla. 1996) ("[W]e interpret the clause as retaining only
the right to dispute the issues of coverage as to the whole loss, or
whether the policy conditions have been violated as specified
above."); Cannon Ranch, 162 So. 3d at 143 (determining that a
retained rights provision did not render the appraisal clause
unenforceable).
Here, the trial court found, "On one hand, the appraisal
provision states that the appraisal process 'will be binding' but on
the other hand, the last sentence states neither party waives any
right under the insurance policy by agreeing to an appraisal." The
trial court found that the binding loss and retained rights clauses
rendered the appraisal provision ambiguous and then stated that
ambiguous provisions are construed against the drafter. The trial
court ruled:
[A]ssuming arguendo the appraisal provision is
enforceable and lawfully invoked, these two conflicting
provisions of the appraisal provision must be construed
as preserving (and not waiving) the Insured's contractual
right to insist upon receiving full payment up to the
maximum amount allowable under the other terms and
conditions of the insurance policy.
We cannot agree that the appraisal provision is ambiguous;
instead, the two clauses can be harmonized. See Shelby Mut. Ins.
30
Co. of Shelby, Ohio v. Smith, 556 So. 2d 393, 396 (Fla. 1990)
(determining that because two subsections of a statute could "be
harmonized, there is no ambiguity on the face of the statute");
Dodge City, Inc. v. Byrne, 693 So. 2d 1033, 1035 (Fla. 2d DCA 1997)
("[W]here one or more provisions of a contract conflict, 'they should
be construed so as to be reconciled, if possible.' " (quoting
Seabreeze Rest., Inc. v. Paumgardhen, 639 So. 2d 69, 71 (Fla. 2d
DCA 1994))).
Because the clauses can be harmonized, the binding appraisal
process remains enforceable while still allowing the parties to
enforce such other rights as they may have under the policy. For
example, to the extent the appraisal process results in a
determination that Progressive underpaid Glassmetics, Glassmetics
would be entitled to pursue any rights it may have against
Progressive due to the underpayment in accordance with the
provisions of the policy and the applicable law.
Outcome: For the foregoing reasons, we reverse the trial court's order
and its conclusions (1) that the appraisal provision was against the
public policy underlying section 627.428; (2) that the appraisal
provision failed to provide sufficient procedures and methodologies;
(3) that Progressive waived its appraisal right; (4) that the appraisal
provision was unenforceable because Progressive failed to prove
that the insured knowingly, voluntarily, and intelligently waived his
rights of access to courts, to a jury trial, and to due process; and (5)
that the appraisal provision contains an ambiguity.
Reversed and remanded for further proceedings.
Plaintiff's Experts:
Defendant's Experts:
Comments: