American Capital Assurance Corporation v. Courtney Meadows Apartment, L.L.P. (1D09-2940) - Reply Brief

IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT
STATE OF FLORIDA
AMERICAN CAPITAL ASSURANCE

CORP., a Florida Corporation,
Appellant,
vs. DCA Case No.: 1D09-2940

Lower Tribunal Case No.:
COURTNEY MEADOWS 2008-CA-16821
APARTMENTS, LLP,
A Florida Corporation,
Appellee.
__________________________________/
_____________________________________________________________
REPLY/CROSS-APPEAL ANSWER BRIEF OF APPELLANT

AMERICAN CAPITAL ASSURANCE CORP.
_____________________________________________________________
Appeal of Non-Final Order from the Circuit Court (Hugh A. Carithers, J.)
of the Fourth Judicial Circuit in and for Duval County, Florida
_____________________________________________________________
GUY E. BURNETTE, JR., ESQ.

Florida Bar No. 236578
PATRICIA A. HORAL, ESQ.
Florida Bar No. 0044197
GUY E. BURNETTE, JR., P.A.

3020 N. Shannon Lakes Drive
Tallahassee, Florida 32309
Telephone: (850) 668-7900
Facsimile: (850) 668-7972
Counsel for Appellant
Found at:
The Florida Legal Blog
www.floridalegalblog.org
TABLE OF CONTENTS
Page
Table of Contents ……………….………………………………………………...2
Table of Citations………………………………………………………..…………4
Statement of the Case and of the Facts .....................................................................7
Summary of Argument ...........................................................................................10
Argument…….........................................................................................................11
ISSUES
I. AMERICAN CAPITAL DID NOT WAIVE ITS RIGHT TO

DEMAND A SWORN PROOF OF LOSS………………………….11
II. AMERICAN CAPITAL DID NOT WAIVE ITS RIGHT TO

APPRAISAL………………………………………………………12
A. THE PLAIN LANGUAGE OF THE POLICY SETS FORTH NO

TIME LIMIT WITHIN WHICH A PARTY MUST INVOKE
APPRAISAL………………………………………………..……12
B. FLORIDA LAW IMPOSES NO TIME LIMIT FOR INVOKING

APPRAISAL WHEN NONE IS SPECIFIED IN THE
POLICY………………………………………………………….16
C. AMERICAN CAPITAL’S PRE-SUIT CONDUCT DID NOT

WAIVE APPRAISAL OR CONSTITUTE A BASIS FOR
AFFIRMANCE UNDER A TIPSY COACHMAN
THEORY………………………………………………………17
III. IT WOULD LEAD TO ABSURD RESULTS IN CONFLICT WITH

THE PUBLIC POLICY FAVORING ALTERNATIVE DISPUTE
RESOLUTION IF EVERY TIME AN INSURER PAID A CLAIM
THAT WAS LATER DISPUTED AS TO AMOUNT BY THE
INSURED, THE INSURER WOULD BE DEEMED TO HAVE
WAIVED APPRAISAL………………………………..…………..19
2 Found at:
IV. Cross Appeal - WHETHER THE TRIAL COURT HELD THAT THE
DETERMINATION OF THE VALUE TO REPAIR THE HEAT,
VENT, AND AIR CONDITIONING, TO GLAZE THE WINDOWS,
AND TO PAINT THE GAZEBO WAS AN ISSUE FOR
APPRAISAL, AND, IF SO, WHETHER SUCH DECISION WAS IN
ERROR……………………………………………………………23
Conclusion……………………………………………………………………….25
Certificate of Service…………………………………………………………….26
Certificate of Compliance………………………………………………………..27
3 Found at:
TABLE OF CITATIONS
Page
Allstate Ins. Co. v. Suarez,
833 So. 2d 762 (Fla. 2002)…………………………………………………20
American Bankers Ins. Co. of Fla. v. Terry,

277 So. 2d 563 (Fla. 3d DCA 1973)……………………………………….13
American Employers' Ins. Co. v. Taylor,

476 So. 2d 281 (Fla. 1st DCA 1985)………………………..……………...19
Bear v. New Jersey Ins. Co.,

189 So. 252 (Fla. 1939)…………………………………………………….13
Cincinnati Ins. Co. v. Palmer,

297 So. 2d 96 (Fla. 4th DCA 1974)………………………………………...13
Citizens Prop. Ins. Corp. v. Cuban-Hebrew Congregation of Miami, Inc.,

5 So. 3d 709 (Fla. 3d DCA 2009)……………………………………...16, 20
Denman Rubber Mfg. Co. v. World Tire Corp.,

396 So. 2d 728 (Fla. 5th DCA 1981)………………………………………19
Donald & Co. Sec. Inc. v. Mid-Fla. Cmty. Servs., Inc.,

620 So. 2d 192 (Fla. 2d DCA 1993)……………………………………….18
Edney v. State,
3 So. 3d 1281 (Fla. 1st DCA 2009)…………………………………………17
Finn v. Prudential-Bache Sec., Inc.,

523 So. 2d 617 (Fla. 4th DCA 1988)……………………………………….18
First Floridian Auto & Home Ins. Co. v. Myrick,

969 So. 2d 1121 (Fla. 2d DCA 2007)……………………………………...16
Fla. Windstorm Underwriting v. Gajwani,

934 So. 2d 501 (Fla. 3d DCA 2005)……………………………………….11
Gainesville Health Care Center, Inc. v. Weston,

857 So. 2d 278 (Fla. 1st DCA 2003)………………………………………..21
4 Found at:
Gen. Star Indem. Co. v. West Fla. Village Inn, Inc.,
874 So. 2d 26 (Fla. 2d DCA 2004)…………...……………………………19
Gray Mart, Inc. v. Fireman’s Fund Ins. Co.,

703 So. 2d 1170 (Fla. 3d DCA 1998)………….………………………16, 17
J. Sourini Painting, Inc. v. Johnson Paints, Inc.,

809 So. 2d 95 (Fla. 2d DCA 2002)………………………………………...24
Johnson v. Nationwide Mut. Ins. Co.,

828 So. 2d 1021 (Fla. 2002)………………………………………………..16
Llerena v. Lumbermans Mut. Casualty Co.,

379 So. 2d 166 (Fla. 3d DCA 1980)……………………………………… 14
Meade v. Lumbermans Mutual Casualty Co.,

423 So. 2d 908 (Fla. 1982)…………………………………………………20
Scottsdale Insurance Co. v. Desalvo,

666 So. 2d 944 (Fla. 1st DCA 1995)………………………………...….16, 21
Siegle v. Progressive Consumers Ins. Co.,

819 So. 2d 732 (Fla. 2002)…………………………………………………12
Soloman v. Chance Harvesting Co.,

489 So. 2d 195 (Fla. 1st DCA 1986)………………………………………..24
Three Palms Pointe v. State Farm Fire & Casualty Co.,

250 F. Supp. 2d 1357 (M.D. Fla. 2003)……………………………………20
Travelers Indem. Co. v. Milgen Dev., Inc.,

297 So. 2d 845 (Fla. 3d DCA 1974)…………………………………….…19
USF&G v. Romay,
744 So. 2d 467 (Fla. 3d DCA 1999)…………………….………….….11, 21
U.S. Fire Ins. Co. v. Franko,

443 So. 2d 170 (Fla. 1st DCA 1983)………………………………………..21
5 Found at:
Wickham v. Famco Servs., Inc.,
350 So. 2d 1159 (Fla. 2d DCA 1977)……………………………………24
6 Found at:
STATEMENT OF CASE AND OF THE FACTS
There are a few key facts that warrant emphasis in this brief in addition to
the statements of facts in the Initial Brief and the Answer Brief/Cross-appeal.
Aside from these facts, American Capital Assurance Corp. (“American Capital”)
relies on its statement of facts from the initial brief.
The insurance policy at issue between Courtney Meadows Apartments, LLP
(“Courtney Meadows”) and American Capital includes the following pertinent
language:
E. Loss Conditions
The following conditions apply in addition to the Common
Policy Conditions and the Commercial Property Conditions.
....
2. Appraisal
If we and you disagree on the value of the property or the
amount of loss, either may make written demand for an
appraisal of the loss. In this event, each party will select a
competent and impartial appraiser. The two appraisers
will select an umpire. If they cannot agree, either may
request that selection be made by a judge of a court
having jurisdiction. The appraisers will state separately
the value of the property and amount of loss. If they fail
to agree, they will submit their differences to the umpire.
A decision agreed to by any two will be binding. Each
party will:
a. Pay its chosen appraiser; and
b. Bear the other expenses of the appraisal and
umpire equally.
If there is an appraisal, we will still retain our right to
deny the claim.
3. Duties In The Event Of Loss Or Damage

You must see that the following are done in the event
7 Found at:
of loss or damage to Covered Property:
....
(7) Send us a signed, sworn proof of loss containing the
information we request to investigate the claim.
You must do this within 60 days after our request.
We will supply you with the necessary forms.
....
4. Loss Payment
a. In the event of loss or damage covered by this
Coverage Form, at our option, we will either:
(1) Pay the value of lost or damaged property;
(2) Pay the cost of repairing or replacing the lost or
damaged property, subject to b. below;
(3) Take all or any part of the property at an agreed
or appraised value; or
(4) Repair, rebuild or replace the property with
other property of like kind and quality, subject to
b. below.
....
c. We will give notice of our intentions within 30 days
after we receive the sworn proof of loss.
....
g. We will pay for covered loss or damage within thirty
days after we receive the sworn proof of loss, if you have
complied with all of the terms of this Coverage Part and:
(1) We have reached agreement with you on the
amount of loss; or
(2) An appraisal award has been made.
(Appellant Appx. C, Ex. A).
On October 22, 2008, American Capital sent Courtney Meadows a letter
requesting that it fill out an attached “Sworn Statement in Proof of Loss,” in
accordance with the terms of the policy, because there was a dispute as to the cost
of the claim. (Appellee Appx. L). American Capital attached a check payable to
Courtney Meadows in the amount of $168,285.98 based on Jeremy

8 Found at:
Gildenmeister’s final estimate of damages. (Appellee Appx. L). In response,
Courtney Meadows sent a letter to American Capital, dated November 11, 2008,
stating that it did not accept the $168,285.98 check and would not complete the
sworn proof of loss. (Appellee Appx. M). Thereafter, in a letter dated November
18, 2008, American Capital indicated that it did not1 agree with Courtney
Meadows’ estimates of damages and wished to invoke appraisal. (Appellee Appx.
O).
Instead of proceeding with appraisal, Courtney Meadows filed suit for
breach of contract and declaratory judgment on December 23, 2008. (Appellant
Appx. C). American Capital filed a motion to dismiss or abate the action and to
compel appraisal based upon its November 18, 2008, demand. (Appellant Appx.
F). The trial court denied the motion with regard to the damages listed in
Gildenmeister’s estimate, finding that American Capital waived the sworn proof of
loss and appraisal. (Appellant Appx. A). However, the trial court also found that
American Capital was entitled to appraisal to determine the cost to fix the heat,
vents, and air conditioning units, to glaze the windows, and to paint the gazebo,
even though these damages were included in Gildenmeister’s estimate. (Appellant
Appx. A).
1
As previously explained in the initial brief, this correspondence contained a typo
in that it stated American Capital agreed with the damages submitted by Courtney
Meadows. The correspondence should have stated, “do not agree.”
9 Found at:
SUMMARY OF THE ARGUMENT
American Capital did not waive its right to a sworn proof of loss. There is no
time limit specified under the policy within which American Capital was required
to request a proof of loss. American Capital timely requested Courtney Meadows
to fill out a proof of loss, and Courtney Meadows wrongfully refused.
American Capital also did not waive its right to appraisal. The plain
language of the policy sets forth no time limit for American Capital to invoke
appraisal. Florida law also imposes no time limits for invoking appraisal when the
policy is silent as to any such time limit. Courts have routinely approved of
compelling appraisal even after suit has been filed.
American Capital’s conduct in this case does not support a finding that it
waived appraisal under a tipsy coachmen theory. American Capital invoked its
right to appraisal without unnecessary delay and before suit was filed. Any failure
to provide Courtney Meadows with requested information pre-suit did not waive
American Capital’s right to appraisal.
If this Court holds that American Capital waived appraisal, the decision
would be in derogation of the well-established public policy favoring alternative
dispute resolution over formal litigation. Further, a finding of waiver would mean
that every insurer that pays a claim that is later disputed as to amount would have
waived its right to appraisal.
10 Found at:
Courtney Meadow’s argument on cross-appeal illustrates an inconsistency
within the trial court’s order. The trial court order should, at the least, be clarified
to indicate whether or not American Capital is entitled to appraisal regarding the
cost to fix the heat, vents, and air conditioning, to glaze the windows, and to paint
the gazebo.
ARGUMENT
I. AMERICAN CAPITAL DID NOT WAIVE ITS RIGHT TO

DEMAND A SWORN PROOF OF LOSS.
When determining the nature of parties’ rights under an insurance contract,
courts are required to “consider the plain language of the policy at the time of the
loss.” See Fla. Windstorm Underwriting v. Gajwani, 934 So. 2d 501, 506 (Fla. 3d
DCA 2005). The language of the policy in this case did not set forth a time limit
within which American Capital was required to demand a sworn proof of loss from
Courtney Meadows.
In the general practice of attempting to resolve insurance claims, insurers
require insureds to submit proofs of loss to lock the insured into a final position
regarding alleged damages. See, e.g., USF&G v. Romay, 744 So. 2d 467, 469-70
(Fla. 3d DCA 1999) (en banc). As such, proofs of loss are generally requested only
after both sides have had the opportunity to investigate the extent of the covered
loss. See Id.
In this case, contrary to the trial court’s holding, American Capital did not
11 Found at:
waive its right to have Courtney Meadows submit a sworn proof of loss. In fact,
American Capital requested Courtney Meadows complete a sworn proof of loss in
a letter dated October 22, 2008. American Capital requested this proof of loss
following both parties’ investigations, upon discovering that a significant
discrepancy existed between each party’s proposed value of the claim. Courtney
Meadows wrongfully refused to complete this even though the language of the
policy required it to fill out a proof of loss within sixty days of American Capital’s
request as a duty in the event of a loss. There is nothing in the policy language that
suggests that American Capital waives its right to a sworn proof of loss by
admitting that a claim is covered under the policy. Therefore, the trial court erred
in finding that American Capital waived its right to a sworn proof of loss.
II. AMERICAN CAPITAL DID NOT WAIVE ITS RIGHT TO

APPRAISAL.
A. THE PLAIN LANGUAGE OF THE POLICY SETS FORTH

NO TIME LIMIT WITHIN WHICH A PARTY MUST
INVOKE APPRAISAL.
The general rule is that insurance contracts are to be construed in accordance
with the plain language of the policy. Siegle v. Progressive Consumers Ins. Co.,
819 So. 2d 732, 735 (Fla. 2002). Accordingly, “[w]hen an insurance contract is not
ambiguous, it must be given effect as written.” Id. (citations omitted).
The policy language in this case merely says that where there is a
disagreement as to the value of the loss, either side may invoke its right to
12 Found at:
appraisal in writing. There is no reference to a time period within which such right
must be invoked. Moreover, under the policy, the sworn proof of loss has no effect
on the parties’ rights to invoke appraisal under the policy. As such, even if
American Capital had waived its right to the sworn proof of loss, such did not
make its invocation of appraisal untimely or ineffective.
Despite the operative language in the policy, the trial court cited several
cases in support of its finding that American Capital was untimely in its attempt to
invoke appraisal. These cases are each distinguishable from the instant case,
however. Each of the policies that were interpreted in these cases set forth a
specific deadline for the insurer to pay the claim or invoke appraisal following
receipt of the sworn proof of loss.
For example, in Bear v. New Jersey Insurance Co., 189 So. 252 (Fla. 1939),
the terms of the policy required the insurer to pay the claim or demand appraisal
within sixty days from the receipt of the formal proof of loss. The court held that
the insurer’s admission of liability “in some unagreed amount” acted to waive the
requirement of a sworn proof of loss. Id. Similarly, in American Bankers
Insurance Co. of Florida v. Terry, 277 So. 2d 563, 564 (Fla. 3d DCA 1973), the
policy at issue contained a sixty-day time limit within which to choose to proceed
with arbitration. See also, Cincinnati Ins. Co. v. Palmer, 297 So. 2d 96 (Fla. 4th
DCA 1974) (construing a policy that required payment within sixty days of
13 Found at:
submission of a sworn proof of loss); Llerena v. Lumbermans Mut. Casualty Co.,
379 So. 2d 166, 167 (Fla. 3d DCA 1980) (interpreting a policy that requires, within
sixty days of the filing of the proof of loss, either party to demand appraisal).
In contrast to these cases, in the instant case, there is no language in the
policy that requires appraisal to be invoked, if at all, within any set time from
receiving or waiving the sworn proof of loss. Despite the clearly differentiating
language of the policy in the instant case from the policies in the cases the trial
court cited, the trial court stated in its order, “Where an insurer admits liability and
coverage for the loss, even in an unagreed amount, formal proof of loss is waived
and the time in which the insurer is required to demand appraisal under the terms
of the policy begins to run.” However, in the policy at issue, it cannot be stressed
enough that there is NO TIME LIMT specified within which the parties must
demand appraisal or it is waived.
The thirty-day time limits mentioned in the policy apply only with regard to
the time for informing the insured of the method for paying the loss after receiving
a sworn proof of loss and the time for payment of the award after an agreement or
appraisal award. Specifically, the policy states,
g. We will pay for covered loss or damage within thirty days after we
receive the sworn proof of loss, if you have complied with all of the
terms of this Coverage Part and:
(1) We have reached agreement with you on the amount of
loss; or
(2) An appraisal award has been made.
14 Found at:
Accordingly, in the instant case, there was no trigger of any thirty-day time limit
for payment, even if American Capital waived its right to a sworn proof of loss.
The parties did not reach an agreement as to the amount of loss, and there was no
appraisal award made. Therefore, nothing triggered the thirty-day time limit under
the policy within which American Capital was required to pay the claim. The trial
court inexplicably interpreted the language of the policy to include a thirty-day
time limit from some waiver of a sworn proof of loss as being a limitation on
American Capital’s right to seek appraisal.
In its order, the trial court repeatedly referenced the policy language of
section E4(a)(3). Section E4(a) provides,
a. In the event of loss or damage covered by this

Coverage Form, at our option, we will either:
(1) Pay the value of lost or damaged property;
(2) Pay the cost of repairing or replacing the lost or
damaged property, subject to b. below;
(3) Take all or any part of the property at an agreed
or appraised value; or
(4) Repair, rebuild or replace the property with
other property of like kind and quality, subject to
b. below.
Subsection (3) applies in the case of insured property or equipment that may be
claimed by the insurance company, for salvage or otherwise, in the event of a
covered loss, for an agreed upon or appraised value, as an option for a method of
15 Found at:
payment. Subsection E4(a)(3) has nothing to do with the prior provision explaining
the process for invoking appraisal in section E2.2 Therefore, the trial court erred
in finding that American Capital’s attempt to invoke appraisal was untimely.
B. FLORIDA LAW IMPOSES NO TIME LIMIT FOR

INVOKING APPRAISAL WHEN NONE IS SPECIFIED IN
THE POLICY.
There is no time limitation under the law for invoking appraisal when a time
limit is not set forth in the insurance policy. In fact, appraisal may be invoked even
after an insured files suit. See e.g., First Floridian Auto & Home Ins. Co. v.
Myrick, 969 So. 2d 1121 (Fla. 2d DCA 2007); Citizens Prop. Ins. Corp. v. Cuban-
Hebrew Congregation of Miami, Inc., 5 So. 3d 709, 710 (Fla. 3d DCA 2009); Gray
Mart, Inc. v. Fireman’s Fund Ins. Co., 703 So. 2d 1170, 1171 (Fla. 3d DCA 1998).
Appraisal is appropriate when the insurer admits that there is a covered loss but
there is a dispute as to the amount of damage. See Johnson v. Nationwide Mut. Ins.
Co., 828 So. 2d 1021, 1022 (Fla. 2002).
For example, in Scottsdale Insurance Co. v. Desalvo, 666 So. 2d 944, 945-
46 (Fla. 1st DCA 1995), the insured filed suit over a dispute as to the value of the
covered loss, and the insurer moved the trial court to stay the action and submit the
issue to appraisal in accordance with the policy provisions. The trial court denied
2
It should be noted that Americian Capital adhered to the terms of this policy by
sending Courtney Meadows a check for $168,285.98 based on Gildenmeister’s
estimate in accordance with payment option E4(a)(2) of the policy.
16 Found at:
the motion. Id. On appeal, this Court reversed and remanded with directions to
compel appraisal in accordance with the terms of the policy. Id. at 947.
Here, unlike the insurers in the above cases, American Capital invoked its
right to appraisal in writing pursuant to the terms of the policy before Courtney
Meadows even filed suit. Even if American Capital had attempted to invoke this
right after suit was filed, however, the above cases illustrate that such an attempt
would still not be considered untimely or amount to a waiver. Therefore, this
Court should reverse and remand for the parties to submit the loss in question to
appraisal in this case, as it did in Desalvo.
C. AMERICAN CAPITAL’S PRE-SUIT CONDUCT DID NOT

WAIVE APPRAISAL OR CONSTITUTE A BASIS FOR
AFFIRMANCE UNDER A TIPSY COACHMAN3 THEORY.
Courtney Meadows argues, as an alternate basis for affirmance, that
American Capital waived appraisal by its pre-suit conduct through its investigation
of the claim and dispute with Courtney Meadows over the extent of damages. The
most recent Florida case interpreting waiver of appraisal through a party’s conduct
is Gray Mart, Inc., 703 So. 2d 1170 (Fla. 3d DCA 1998). In Gray Mart, the court
determined that the insurer waived its right to appraisal by actively litigating the
case for fourteen months and demanding appraisal only one month prior to the
3
See, e.g., Edney v. State, 3 So. 3d 1281, 1284 (Fla. 1st DCA 2009) (explaining
that the trial court may be affirmed if it reached the right result for the wrong
reason under “tipsy coachman” rule).
17 Found at:
scheduled date of trial. Id. at 1171, 1173. The Gray Mart court noted, “the right to
an appraisal may be waived if a party maintains a position inconsistent with the
appraisal remedy.” Id. at 1172. The court further held that a showing of prejudice
is required to find a waiver of appraisal. Id. at 1173 (certifying conflict with
Donald & Co. Sec. Inc. v. Mid-Fla. Cmty. Servs., Inc., 620 So. 2d 192 (Fla. 2d
DCA 1993), and Finn v. Prudential-Bache Sec., Inc., 523 So. 2d 617 (Fla. 4th DCA
1988), which both held that no prejudice is required to effectuate a waiver).
Here, in contrast to Gray Mart, American Capital invoked its right to
appraisal prior to Courtney Meadows even filing suit. Unlike the insurer in Gray
Mart, American Capital never actively litigated the matter with Courtney Meadows
before invoking appraisal. Further, Courtney Meadows would not have been
prejudiced by undergoing appraisal upon American Capital’s request because, at
that time, it had not yet filed suit and had not been forced to proceed through
litigation. Therefore, under the Gray Mart standard governing waiver of appraisal
proceedings through a party’s conduct, American Capital’s actions did not amount
to a waiver and are not a basis for affirming the trial court’s decision under a tipsy
coachman theory.
Moreover, Courtney Meadows argument that American Capital’s alleged
failure to provide it with a copy of Gildenmeister’s report regarding the value of
the loss somehow waived American Capital’s right to appraisal is without legal
18 Found at:
support. There is no case that has held that a party’s failure to provide information
to the opposing party in an insurance dispute constitutes a waiver of that party’s
right to appraisal under the policy. Accordingly, the Court should find that
American Capital did not waive its right to appraisal based on its pre-suit conduct.
III. IT WOULD LEAD TO ABSURD RESULTS IN CONFLICT WITH

THE PUBLIC POLICY FAVORING ALTERNATIVE DISPUTE
RESOLUTION IF EVERY TIME AN INSURER PAID A CLAIM
THAT WAS LATER DISPUTED AS TO AMOUNT BY THE
INSURED, THE INSURER WOULD BE DEEMED TO HAVE
WAIVED APPRAISAL.
Courts must interpret insurance policy provisions in a way that
accomplishes the full intent of the parties, provides meaning to the provisions, and
avoids an absurd result. See American Employers' Ins. Co. v. Taylor, 476 So. 2d
281, 283-84 (Fla. 1st DCA 1985). Accordingly, insurance policy provisions
should be given “reasonable, practical, and sensible” interpretations. Denman
Rubber Manufacturing Co. v. World Tire Corp., 396 So. 2d 728, 729 (Fla. 5th
DCA 1981); see also Gen. Star Indem. Co. v. West Fla. Village Inn, Inc., 874 So.
2d 26, 29-30 (Fla. 2d DCA 2004) (explaining that contracts for insurance should be
constructed in a manner that is “reasonable, practical, sensible, and just”). If one
interpretation of the policy language “would lead to an absurd result, that
interpretation must be abandoned and one more consistent with reason and
probability adopted.” Travelers Indem. Co. v. Milgen Dev., Inc., 297 So. 2d 845,
847 (Fla. 3d DCA 1974).

19 Found at:
The caselaw interpreting insurance policy language specifically involving
appraisal has been evolving recently. Historically, appraisal provisions were
viewed synonymously with arbitration clauses. However, in Allstate Insurance Co.
v. Suarez, 833 So. 2d 762, 763 (Fla. 2002), the supreme court upheld the Third
District’s decision that the umpire in an appraisal proceeding was not required to
apply the Florida Arbitration Code. This case clarified that appraisals and
arbitrations are distinct proceedings and that appraisals are not required to be
conducted pursuant to statutes governing arbitrations. See id. However, Suarez did
not hold that all the cases dealing with appraisal that reference statutory provisions
governing arbitration were wrongly decided. See generally, id. In fact, since
Suarez, courts have recognized that rules governing arbitration can still be looked
to by analogy for guidance when making decisions regarding appraisal
proceedings.
For example, in Citizens Property, 5 So. 3d at 711, a case which postdates
Suarez by several years, the Third District looked to Meade v. Lumbermans
Mutual Casualty Co., 423 So. 2d 908 (Fla. 1982), for guidance in interpreting an
appraisal decision. The Meade court had examined an arbitration award to
determine whether it contained a repayment requirement. 423 So. 2d 908. The
Citizens court recognized that while the Florida Arbitration Code is no longer
controlling on appraisals, it can be looked to by courts for guidance by “analogy.”
20 Found at:
Id. at 712. Similarly, in Three Palms Pointe v. State Farm Fire & Casualty Co., 250
F. Supp. 2d 1357, 1361-62 (M.D. Fla. 2003), which also post-dates Suarez, the
court recognized that under Florida law, it was proper to use the Florida
Arbitration Code’s confirmation process to confirm an appraisal award, despite the
differences between arbitration and appraisal proceedings.
Accordingly, although Courtney Meadows correctly observed that the
supreme court found appraisal and arbitration to be distinct in Suarez, it is still
undisputed that public policy and an interest in judicial economy favors the use of
alternative dispute resolution, such as appraisal. See, e.g., Gainesville Health Care
Center, Inc. v. Weston, 857 So. 2d 278, 289 (Fla. 1st DCA 2003); Desalvo, 666 So.
2d at 946-47; U.S. Fire Ins. Co. v. Franko, 443 So. 2d 170, 171-72 (Fla. 1st DCA
1983). Moreover, there must be an honest disagreement between the parties
following an exchange of relevant information before any alternative dispute
resolution proceedings under the terms of the policy become operative. See
Romay, 744 So. 2d at 469-70.
In this case, it was only after Courtney Meadows’s refusal of American
Capital’s check for insurance proceeds based on Gildenmeister’s estimate that
American Capital was made aware that there would be no agreement as to the
value of the covered loss and that is should seek appraisal. Courtney Meadows
informed American Capital of this disagreement in a letter dated November 11,
21 Found at:
2008. In response, American Capital invoked its right to appraisal, in writing, in a
letter to Courtney Meadows dated November 18, 2008. American Capital did not
employ stalling tactics or attempt to delay resolution of this action. Rather,
American Capital made every attempt to resolve this dispute without litigation. As
soon as American Capital was informed that the parties’ had vastly differing
positions regarding the value of the covered loss, it invoked its right to appraisal.
Thereafter, Courtney Meadows nonetheless filed a lawsuit, presumably to gain
additional damages and attorney fees, even though American Capital was
voluntarily submitting to appraisal and would promptly honor any appraisal award.
American Capital has made repeated unsuccessful attempts to stay the court
proceedings so that this claim could be resolved through appraisal, consistent with
the policy of favoring alternative dispute resolution.
If this Court upholds the trial court’s determination that American Capital
waived appraisal by voluntarily paying Courtney Meadows for its loss when there
was no time period in the policy within which to invoke appraisal, it would lead to
absurd results. Such a holding would mean that any time the insured admitted
coverage or voluntarily paid the insured for a loss that was later disputed in
amount, it would waive appraisal. This position is not only disfavored under the
policy language, as previously discussed in Issue II(A), it is also in stark contrast to
the long-followed public policy in favor of alternative dispute resolution whenever
22 Found at:
possible in lieu of formal court proceedings. Accordingly, this Court should find
that American Capital is entitled to appraisal under the terms of the policy and
consistent with the law favoring alternative dispute resolution.
IV. Cross Appeal - WHETHER THE TRIAL COURT HELD THAT

THE DETERMINATION OF THE VALUE TO REPAIR THE
HEAT, VENT, AND AIR CONDITIONING, TO GLAZE THE
WINDOWS, AND TO PAINT THE GAZEBO WAS AN ISSUE FOR
APPRAISAL, AND, IF SO, WHETHER SUCH DECISION WAS IN
ERROR.
In a correspondence with William Kull on November 11, 2008, counsel for
Courtney Meadows indicated that Courtney Meadows did not dispute
Gildenmeister’s estimated costs to repair several items: $25,783.54 for the heat,
vent, and air conditioning; $1,306.85 for window glazing and repair; and $873.82
for painting the gazebo. In its cross-appeal, Courtney Meadows argues that
American Capital should have paid it these sums and that the trial court erred in
ordering these damages subject to appraisal.
In its final order, the trial court appeared to make inconsistent findings. In
the body of the order, the trial court indicated that American Capital is entitled to
appraisal to determine the cost to repair the damage to the heat, vents, and air
conditioning units, to glaze the windows, and to paint the gazebo. However, in the
conclusion of the order, the trial court stated that it denied American Capital’s
motion to compel appraisal with regard to all of the Gildenmeister’s estimates that
were provided to Courtney Meadows on October 3, 2008. In his report,

23 Found at:
Gildenmeister provided estimates of the costs to repair the heat, vents, and air
conditioning, to glaze the windows, and to paint. As such, it is unclear what the
trial court’s ruling is with regard to these damages.
In general, a trial court’s inconsistent orders preclude appellate review. See
J. Sourini Painting, Inc. v. Johnson Paints, Inc., 809 So. 2d 95, 98 (Fla. 2d DCA
2002); Wickham v. Famco Servs., Inc., 350 So. 2d 1159, 1161 (Fla. 2d DCA
1977). In J. Sourini, the court reversed the judgment and order and remanded for a
new trial on all issues because “the trial court’s findings [were] contradictory and
its legal conclusions inconsistent.” 809 So. 2d at 99. Similarly, in Soloman v.
Chance Harvesting Co., 489 So. 2d 195, 196 (Fla. 1st DCA 1986), this Court
reversed and remanded an order containing inconsistent findings for the trial court
to enter an order with consistent findings.
Likewise, in this case, the trial court’s final order should be reversed because
it contains inconsistent holdings with regard to whether appraisal is required for
these damages. The matter should be remanded for the trial court to clarify its
conclusion.
Additionally, there is a slight conflict between Courtney Meadow’s position
and American Capital’s position regarding these damages. Courtney Meadows
claims that the $1,306.85 was to be for window reglazing only, while
Gildenmeister’s estimate lists such as the cost for window glazing and repair.
24 Found at:
Similarly, Courtney Meadows stated that the $873.82 was for repainting the
gazebo, whereas Gildenmeister lists that sum for painting in general. In light of
these conflicts, American Capital seeks that these damages be subjected to
appraisal along with the rest of the damages estimated in Gildenmeister’s report.
CONCLUSION
WHEREFORE, American Capital respectfully requests this Court reverse
the trial court’s order denying appraisal with regard to the damages listed in
Gildenmeister’s estimate.
25 Found at:
CERTIFICATE OF SERVICE
I, the undersigned, hereby certify that I have served a copy of the above and
foregoing document on P. Campbell Ford, Esq., Ford, Miller & Wainer, P.A., 1835
N. Third Street, Jacksonville, FL 32250 and Diane H. Tutt, Esq., Diane H. Tutt,
P.A., P.O. Box 292436, Davie, FL 33329-2436, by placing the same in the U.S.
Mail, properly addressed and First Class postage prepaid this the 8th day of
September, 2009.
Guy E. Burnette, Jr., Esquire

Florida Bar No.: 236578
Patricia A. Horal, Esq.
3020 N. Shannon Lakes Dr.
Tallahassee, FL 32309
Attorneys for Appellant
26 Found at:
CERTIFICATE OF COMPLIANCE
I, the undersigned, hereby certify that Appellant’s Reply Brief complies with
the font requirements of Florida Rule of Appellate Procedure 9.210(a)-(b).
Guy E. Burnette, Jr., Esquire

Patricia A. Horal, Esquire
3020 N. Shannon Lakes Dr.
Tallahassee, FL 32309
Attorneys for Appellant
27 Found at:

American Capital Assurance Corporation v. Courtney Meadows Apartment, L.L.P. (1D09-2940) - Reply Brief

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

American Capital Assurance Corporation v. Courtney Meadows Apartment, L.L.P. (1D09-2940) - Reply Brief

Uploaded by

Copyright:

Available Formats

IN THE DISTRICT COURT OF APPEAL

AMERICAN CAPITAL ASSURANCE

vs. DCA Case No.: 1D09-2940

REPLY/CROSS-APPEAL ANSWER BRIEF OF APPELLANT

GUY E. BURNETTE, JR., ESQ.

GUY E. BURNETTE, JR., P.A.

Table of Contents ……………….………………………………………………...2

Statement of the Case and of the Facts .....................................................................7

Summary of Argument ...........................................................................................10

I. AMERICAN CAPITAL DID NOT WAIVE ITS RIGHT TO

II. AMERICAN CAPITAL DID NOT WAIVE ITS RIGHT TO

A. THE PLAIN LANGUAGE OF THE POLICY SETS FORTH NO

B. FLORIDA LAW IMPOSES NO TIME LIMIT FOR INVOKING

C. AMERICAN CAPITAL’S PRE-SUIT CONDUCT DID NOT

III. IT WOULD LEAD TO ABSURD RESULTS IN CONFLICT WITH

American Bankers Ins. Co. of Fla. v. Terry,

American Employers' Ins. Co. v. Taylor,

Bear v. New Jersey Ins. Co.,

Cincinnati Ins. Co. v. Palmer,

Citizens Prop. Ins. Corp. v. Cuban-Hebrew Congregation of Miami, Inc.,

Denman Rubber Mfg. Co. v. World Tire Corp.,

Donald & Co. Sec. Inc. v. Mid-Fla. Cmty. Servs., Inc.,

Finn v. Prudential-Bache Sec., Inc.,

First Floridian Auto & Home Ins. Co. v. Myrick,

Fla. Windstorm Underwriting v. Gajwani,

Gainesville Health Care Center, Inc. v. Weston,

Gray Mart, Inc. v. Fireman’s Fund Ins. Co.,

J. Sourini Painting, Inc. v. Johnson Paints, Inc.,

Johnson v. Nationwide Mut. Ins. Co.,

Llerena v. Lumbermans Mut. Casualty Co.,

Meade v. Lumbermans Mutual Casualty Co.,

Scottsdale Insurance Co. v. Desalvo,

Siegle v. Progressive Consumers Ins. Co.,

Soloman v. Chance Harvesting Co.,

Three Palms Pointe v. State Farm Fire & Casualty Co.,

Travelers Indem. Co. v. Milgen Dev., Inc.,

U.S. Fire Ins. Co. v. Franko,

relies on its statement of facts from the initial brief.

The insurance policy at issue between Courtney Meadows Apartments, LLP

(“Courtney Meadows”) and American Capital includes the following pertinent

3. Duties In The Event Of Loss Or Damage

(Appellant Appx. C, Ex. A).

On October 22, 2008, American Capital sent Courtney Meadows a letter

requesting that it fill out an attached “Sworn Statement in Proof of Loss,” in

Courtney Meadows in the amount of $168,285.98 based on Jeremy

Meadows’ estimates of damages and wished to invoke appraisal. (Appellee Appx.

Instead of proceeding with appraisal, Courtney Meadows filed suit for

breach of contract and declaratory judgment on December 23, 2008. (Appellant

even though these damages were included in Gildenmeister’s estimate. (Appellant

to request a proof of loss. American Capital timely requested Courtney Meadows

to fill out a proof of loss, and Courtney Meadows wrongfully refused.

compelling appraisal even after suit has been filed.

American Capital’s right to appraisal.

would be in derogation of the well-established public policy favoring alternative

waived its right to appraisal.

to indicate whether or not American Capital is entitled to appraisal regarding the

I. AMERICAN CAPITAL DID NOT WAIVE ITS RIGHT TO

When determining the nature of parties’ rights under an insurance contract,

In the general practice of attempting to resolve insurance claims, insurers

loss. See Id.

American Capital requested Courtney Meadows complete a sworn proof of loss in

following both parties’ investigations, upon discovering that a significant

II. AMERICAN CAPITAL DID NOT WAIVE ITS RIGHT TO