20 Fla. L. Weekly Supp. 564b
Online Reference: FLWSUPP 2006JAMEInsurance — Homeowners — Sinkhole damage — Where homeowner made claim for sinkhole damage, insurer’s engineer recommended remedial stabilization measures, homeowner retained own engineer who opined that stabilization measures recommended by insurer’s engineer were insufficient, and homeowner entered into repair contract based on own engineer’s report, insurer was not obligated by statute or policy to pay benefits for repairs — Both statute and policy require homeowner to contract for repairs recommended by insurer’s engineer and, if it is determined after repair has begun that additional repairs are required to stabilize land, insurer must either make additional repairs or tender policy limits without reduction for repair expenses already incurred
LONNIE JAMES, Plaintiff, v. CITIZENS PROPERTY INSURANCE CORPORATION, Defendant. Circuit Court, 13th Judicial Circuit in and for Hillsborough County, General Civil Division. Case No. 12-CA-010694, Division F. January 9, 2013. Charles Ed Bergmann, Judge. Counsel: Joshua E. Burnett, Marshall Thomas Burnett, Tampa, for Plaintiff. Todd Wesley Abrams, Cole Scott & Kissane, Tampa, for Defendant.
ORDER GRANTING PARTIAL SUMMARYJUDGMENT AGAINST PLAINTIFF
THIS MATTER is before the Court on Defendant’s Motion for Partial Summary Judgment, filed November 6, 2012; and Plaintiff’s Memorandum in Opposition to Motion for Summary Judgment, filed December 10, 2012. The Court, upon review of the Motion, the record, and arguments of counsel, hereby finds as follows:
FACTUAL BACKGROUND
Lonnie James (“Plaintiff”) entered into a contract for homeowners’ insurance with Citizens Property Insurance Corporation (“Citizens”) on May 2, 2011, for real property located at [Editor’s Note: Address Omitted] in Tampa, Florida. On or about May 13, 2011, Plaintiff discovered damage to his home caused by a sinkhole and made a claim under the insurance policy.
Pursuant to § 627.707(2), Florida Statutes, Citizens hired an engineering firm to determine the cause of the damage and to develop a sinkhole remediation plan. The engineering firm determined that a sinkhole was the cause of damage to Plaintiff’s home and provided an estimate of the cost of stabilization. Plaintiff retained his own engineer who opined that the remedial stabilization measures recommended by Citizens’ engineer were insufficient to properly and permanently repair the subsurface and foundation of the home. On or about May 25, 2012, Plaintiff entered into a contract for the repairs and subsurface remedial measures recommended by its engineer, subject to Citizens’ authorization and approval. Citizens has not approved or authorized the repairs, and Plaintiff commenced the instant action.STANDARD OF REVIEW
Pursuant to Fla. R. Civ. P. 1.510, summary judgment is proper if there exists no genuine issues of material fact and the movant is entitled to summary judgment as a matter of law. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000) [25 Fla. L. Weekly S390a]. The moving party carries the initial burden of demonstrating the absence of a genuine issue of material fact. However, once this has been satisfied, the burden shifts to the opposing party to refute the movant. Williams v. Beckham & McAliley, P.A., 582 So. 2d 1206, 1207 (Fla. 2d DCA 1991). Therefore, if the record raises any doubt that a genuine issue of material fact might exist, such doubt should be resolved in favor of the non-moving party. Nard, Inc. v. DeVito Contracting & Supply, Inc., 769 So.2d 1138, 1140 (Fla. 2d DCA 2000) [25 Fla. L. Weekly D2500b].DISCUSSIONA. Statutory Framework
Citizens is entitled to partial summary judgment because neither statute nor the insurance policy require that Citizens pay for repairs that were not recommended in the report from its’ engineer.1 Section 627.707(1)-(2) provide the following:
Upon receipt of a claim for a sinkhole loss, an insurer must meet the following standards in investigating a claim:
(1) The insurer must make an inspection of the insured’s premises to determine if there has been physical damage to the structure which may be the result of sinkhole activity.
(2) Following the insurer’s initial inspection, the insurer shall engage a professional engineer or a professional geologist to conduct testing as provided in s. 627.7072 to determine the cause of the loss within a reasonable professional probability and issue a report as provided in s. 627.7073, . . .
§ 627.707(1)-(2), Fla. Stat. (2010).
Section 627.707(5)(a) provides the following:
Subject to paragraph (b), if a sinkhole loss is verified, the insurer shall pay to stabilize the land and building and repair the foundation in accordance with the recommendations of the professional engineer as provided under s. 627.7073, and in consultation with the policyholder, subject to the coverage and terms of the policy. The insurer shall pay for other repairs to the structure and contents in accordance with the terms of the policy.
§ 627.707(5)(a), Fla. Stat. (emphasis added).
Section 627.7073 provides the following:
(1) Upon completion of testing as provided in s. 627.7072, the professional engineer or professional geologist shall issue a report and certification to the insurer and the policyholder as provided in this section.
(a) Sinkhole loss is verified if, based upon tests performed in accordance with s. 627.7072, a professional engineer or a professional geologist issues a written report and certification stating:
1. That the cause of the actual physical and structural damage is sinkhole activity within a reasonable professional probability.
2. That the analyses conducted were of sufficient scope to identify sinkhole activity as the cause of damage within a reasonable professional probability.
3. A description of the tests performed.
4. A recommendation by the professional engineer of methods for stabilizing the land and building and for making repairs to the foundation.
(b) If sinkhole activity is eliminated as the cause of damage to the structure, the professional engineer or professional geologist shall issue a written report and certification to the policyholder and the insurer stating:
1. That the cause of the damage is not sinkhole activity within a reasonable professional probability.
2. That the analyses and tests conducted were of sufficient scope to eliminate sinkhole activity as the cause of damage within a reasonable professional probability.
3. A statement of the cause of the damage within a reasonable professional probability.
4. A description of the tests performed.
(c) The respective findings, opinions, and recommendations of the professional engineer or professional geologist as to the cause of distress to the property and the findings, opinions, and recommendations of the professional engineer as to land and building stabilization and foundation repair shall be presumed correct.
§ 627.7073(1), Fla. Stat. (2010) (emphasis added).B. Analysis
Section 627.707(2) provides that the insurer “shall engage a professional engineer or a professional geologist to conduct testing” to determine if damage to a home is caused by a sinkhole. § 627.707(2), Fla. Stat. The professional engineer or professional geologist hired by the insurer is required to issue a report and certification to the insurer and the policyholder. § 627.7073(1), Fla. Stat. The insurer is required to pay to stabilize the land and building in accordance with the recommendations of the professional engineer as provided under s. 627.7073. § 627.707(5)(a), Fla. Stat. The only recommendations referenced in the statute are those required to be made by the professional engineer or professional geologist hired by the insurer. Moreover, those findings, opinions, and recommendations are presumed correct, albeit only during the claims process. There is a vanishing presumption in the litigation context. Universal Insurance Co. v. Warfel, 82 So. 3rd 47 (Fla. 2012) [37 Fla. L. Weekly S50a]. As such, the stabilization and repairs are to be completed in accordance with the recommendation of the insurer’s professional engineer. This interpretation is further supported by subsection (5)(b), which provides as follows:
The insurer may limit its total claims payment to the actual cash value of the sinkhole loss, not including underpinning or grouting or any other repair technique performed below the existing foundation of the building, until the policyholder enters into a contract for the performance of building stabilization or foundation repairs.
§ 627.707(5)(b), Fla. Stat. While perhaps not a paragon of clarity, when §§ 627.707 and 627.7073, Florida Statutes, are read together, the logical conclusion is that the insurer is to pay or repairs based on the recommendations of the engineer it hires, regardless of conflicts with reports from engineers hired by the insured. Section 627.707 does require consultation with the insured, but it does not require the insured’s approval or give them veto power over the engineer’s recommendations.
Such an interpretation of the statute does not force a homeowner to accept inadequate repairs. Rather, it provides a starting point for repairs based on the estimate from the insurer’s engineer. Section 627.707(5), Florida Statutes, requires that the insurer pay to repair the damage or loss as the work is performed, or “tender the policy limits to the policyholder without a reduction for the repair expenses incurred.” § 627.707(5)(b), Fla. Stat. The Court interprets this to mean that once the insurer determines that there has been sinkhole damage, the insurer must make recommendations on how to stabilize the land, repair the damage, and then must actually pay for repairs. If the engineer approved to make the repairs determines that additional repairs are required to stabilize the land other than those previously recommended, the insurer must either make the repairs or pay the policy limits to the policy holder without a reduction for repair expenses incurred by the insurance company.
Additionally, the policy between Plaintiff and Citizens contains the same requirements as the statute. The policy provides as follows:
(e) If repair has begun and the professional engineer selected or approved by us determines that the repairs will exceed the applicable Limit of Insurance, we will at our option; either:
(i) Complete the professional engineer’s recommended repairs; or
(ii) Pay the policy limits without a reduction for the repair expenses incurred.
CIT 23 94 01 10. As under the statute, Citizens is required to pay for repairs as determined by an approved engineer or pay the policy limits. Because both § 627.707, Florida Statutes, and the policy require Citizens to stabilize the land and make the repairs that an approved engineer determines are required, the homeowner is assured that appropriate remedial measures will be taken.2
Given the requirements of the statute and insurance policy, the Court concludes that no genuine issues of material fact exist. Plaintiff made a sinkhole claim; Citizens hired a professional engineer to investigate and prepare a report pursuant to § 627.707, Florida Statutes; and Plaintiff has not yet entered into a contract to repair the damage based on the recommendation of Citizen’s engineer. Until such time as Plaintiff enters into a contract for repairs based upon the recommendations of Citizens’ engineer, Citizens is not obligated by statute or the insurance policy to pay benefits. As such, Citizens is entitled to have its motion for partial summary judgment granted.
It is therefore ORDERED AND ADJUDGED that Defendant’s Motion for Partial Summary Judgment is hereby GRANTED.
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1The partial summary judgment in this case is limited to the issues discussed infra. Specifically, the Court is not granting summary judgment in regard to any foundation issues or regarding whether a contract that does not include foundation repairs would meet the requirements of § 627.707, Florida Statutes (2010). The Court also does not reach a decision as to whether Plaintiff has entered into a contract for the repairs recommended by his engineer.
2The Court also notes that it appears Plaintiff would have a cause of action for breach of contract against Citizens for five years after the completion of repairs if such repairs prove to be insufficient to address below-ground stabilization issues. Plaintiff’s loss occurred during the policy period, and Plaintiff made its claim during the policy period, creating a contractual obligation for Citizen’s to repair the damage and stabilize the land. Failure to do so would give rise to a breach of contract claim during the five-year statute of limitations.
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