25 Fla. L. Weekly Supp. 833a
Online Reference: FLWSUPP 2509JJOHInsurance — Automobile — Windshield repair — Declaratory judgments — Plaintiff has stated cause of action for declaratory relief in complaint seeking interpretation of term “cost to repair or replace” in policy and declarations that appraisal provision in policy is not applicable to claim for windshield repair, that appraisal in context of claim violates prohibitive cost doctrine, and that insurer failed to select disinterested appraiser — Motion to dismiss and compel appraisal denied, as case presents issues of contract interpretation, coverage, and standing that are beyond determination of damages — Windshield replacement and repair is not contemplated by appraisal provision of policy requiring appraiser to determine actual cash value and amount of loss, which are not relevant to cost to repair windshield
AUTO GLASS AMERICA, LLC (a/a/o Joe Johnson), Plaintiff, vs. ALLSTATE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 17-003282 COWE (82). November 21, 2017. Jennifer W. Hilal, Judge. Counsel: Emilio R. Stillo and Andrew Davis-Henrichs, Emilo-Stillo P.A.; Lawrence Kopelman, Lawrence M. Kopelman, P.A.; and Mac Phillips, The Phillips Law Group, for Plaintiff. Alison Haney Bruck, Law Offices of Robert J. Smith, and Kansas R. Gooden, Boyd & Jenerette, P.A., for Defendant.
ORDER DENYING DEFENDANT’S AMENDED MOTIONTO DISMISS PLAINTIFF’S AMENDED COMPLAINT,DEMAND FOR APPRAISAL, AND MOTION FORPROTECTIVE ORDER REGARDING DISCOVERY
THIS CAUSE came before the Court on October 27, 2017 for hearing on Defendant’s Motion to Dismiss Plaintiff’s Amended Complaint, Demand into Appraisal and Motion for Protective Order Regarding Discovery (the “Motion”), and the Court, having reviewed the Motion and entire court file; having reviewed the relevant legal authorities; having heard argument of counsel; and having been sufficiently advised in the premises,
ORDERS AND ADJUDGES that the Motion is DENIED in all respects for the reasons set forth below.Background
In this case regarding the replacement of Allstate’s insured’s windshield performed by Auto Glass America, LLC, the Amended Complaint asserts four counts for declaratory relief:
1. Count 1 seeks a judicial declaration interpreting the term “cost to repair or replace” contained in the Limit of Liability provision under the comprehensive portion the Allstate policy;
2. Count 2 seeks a judicial declaration that the appraisal provision in the property damage portion of the Allstate policy is not applicable to the instant claim;
3. Count 3 seeks a judicial declaration that appraisal in the context of the subject claim violates the prohibitive cost doctrine; and
4. Count 4 seeks a judicial declaration that Allstate failed to select a disinterested appraiser (this count was pled in the alternative).
In response, Allstate filed the Motion in an effort to dismiss the case and compel appraisal with its chosen appraiser, Auto Glass Inspection Services (“AGIS”). In its response Allstate also challenged whether the Plaintiff has standing. The Defendant contends that the assignment of benefits violates Florida Statute § 626.854 in that the assignment violated the “public adjusting statute”.
The Allstate insurance policy provides for appraisal when there is only a dispute as to the specific dollar amount of the loss, and states:
[W]e will pay for direct and accidental loss to the insured auto or a non-owned auto not caused by collision.
Glass breakage, whether or not caused by collision, and collision with a bird or animal.
* * *
Our limit of liability is the least of:
1. The actual cash value of the property at the time of the loss, which may include a deduction for depreciation;
2. The cost to repair or replace as determined by us, the property or part to its physical condition at the time of loss using parts produced by or for the vehicle’s manufacturer, or parts from other sources, including, but not limited to, non-original equipment manufacturers, subject to applicable state laws and regulations.
* * *
Right to Appraisal
Both you and we have a right to demand an appraisal of the loss. Each will appoint and pay a competent and disinterested appraiser and will equally share other appraisal expenses. The appraisers, or a judge of a court of record, will select an umpire to decide any differences. Each appraiser will state separately the actual cash value and the amount of loss. An award in writing by any two appraisers will determine the loss amount payable.
The Plaintiff opposes the Motion on several grounds, including: (1) appraisal is an inappropriate process to resolve such equitable claims as declaratory relief regarding the interpretation of the insurance policy; (2) Allstate’s appraisal provision does not apply to repair and replacement of windshields; (3) Allstate’s chosen appraiser, AGIS, is not “disinterested” as required by the policy in the event appraisal was appropriate; and (4) the cost of the appraisal likely exceeds the amount of damages and that expense is not a taxable cost at the conclusion of the process, such that Plaintiff could recoup the cost of the appraisal even if it were the prevailing party.
Plaintiff contends that the primary issue in this case is one of insurance policy interpretation, for which appraisal is not an appropriate method of dispute resolution because appraisal is only proper when the sole issue is the amount of the loss or the actual cash value of the entire vehicle (as opposed to a part thereof, like the windshield). When the insurer determines that the part can be repaired or replaced, the actual cash value of the property (i.e., the entire vehicle) is no longer at issue and the only determination required is the cost to repair or replace the part which is not the subject of appraisal. The only valuation to be made is the cost to repair or replace the part or property. Therefore, the court must determine whether the term “cost to repair or replace” is either ambiguous or can reasonably be interpreted in more than one manner as alleged by the Plaintiff in the complaint. The Court believes that not only does this policy term require judicial interpretation, but that the “cost to repair or replace” windshield glass is not an issue for which appraisal exists as evidenced by the terms of the appraisal provision itself.
Additionally, Plaintiff seeks a declaration that Defendant’s appointed appraiser, AGIS, is not “disinterested” as is required by the policy of insurance. See Heritage Prop. and Cas. Ins. Co. v. Romanach, 224 So.3d 262 (Fla. 3d DCA 2017) [42 Fla. L. Weekly D1563a]; Florida Ins. Guar. Ass’n v. Branco, 148 So. 3d 488 (Fla. 5th DCA 2014) [39 Fla. L. Weekly D2020a]. The Plaintiff presented the Court with correspondence dated June 21, 2013 from attorneys retained by AGIS which threatened various repair shops with litigation.1 The correspondence states the Alvarez & Gilbert, PLLC law firm represents AGIS in its capacity as appraiser for Allstate’s various entities. Further, the letter contains threats of litigation against these shops by AGIS relating to disputes at issue in the appraisal process. The firm, on behalf of AGIS further warns repair shops to “govern [themselves] accordingly.”
The Plaintiff also presented the Court with a print-out of the AGIS website on which AGIS states its mission is “to verify glass damage for the insurance industry.” The website also represents that “AG1S sole purpose is to report back to the insurance industry what type of damage exists or lack thereof.” It further indicates that “AGIS has no affiliation with any companies in the glass industry and only serves large insurance companies.”
The Plaintiff also presented correspondence sent between Plaintiff and Allstate in numerous claims requesting AGIS be removed as appraiser because AGIS is not disinterested and that Allstate appoint a disinterested appraiser. In response, Allstate issued numerous letters retaining the position that AGIS is disinterested. Allstate continues to retain this position as stated in Defendant’s motion. Plaintiff argues that despite making a good faith effort to remove AGIS and to obtain a disinterested appraiser Allstate’s position remains, thus: creating a basis to believe that sending additional letters requesting the removal of AGIS would be futile. See Waksman Enterprises, Inc. v. Oregon Properties, Inc., 862 So.2d 35 (Fla. 2d DCA 2007) [28 Fla. L. Weekly D2229d].
Plaintiff also seeks a declaration that the appraisal provision is unenforceable and illusory because the expense to enter appraisal is prohibitive upon both the insured and Plaintiff. The appraisal provision at issue requires that each party bears the costs of its own appraiser and split the costs for the umpire if the appraisers do not agree on the amount of the loss. Plaintiff relies on various county court decisions that have considered whether appraisal provisions may be illusory in the context of the small monetary amounts of windshield damage cases. See Broward Ins. Recovery Cntr., LLC (a/a/o Charlie Gari) v. Allstate Fire and Cas. Ins. Co., 25 Fla. L. Weekly Supp. 293a (Fla. Broward County Ct. May 8, 2017) (Fishman, J.); Broward Ins. Recovery Cntr., LLC (a/a/o Shane Bushman) v. Progressive Select Ins. Co., 24 Fla. L. Weekly Supp. 761a (Broward County Ct. Nov. 3, 2016)(Lee, J.); Clear Vision Windshield Repair LLC (a/a/o Frances Soto) v. Progressive Amer. Ins. Co., 23 Fla. L. Weekly Supp. 862a (Fla. Broward County Ct. December 14, 2015) (Skolnik, J.).
Conclusions of Law
To be entitled to declaratory relief, a party must demonstrate that “there is a bona fide, actual, present practical need for the declaration; that the declaration should deal with a present, ascertain or ascertainable state of facts or present controversy as to a state of facts; that some impurity, power, privilege or right of the complaining party is dependent upon the facts or the law applicable to the facts; that there is some person or persons who have, or reasonably may have an actual present, adverse and antagonistic interest in the subject matter, either in fact or law; that the antagonistic and adverse interest [sic] are all before the court by proper process or class representation and that the relief sought is not merely the giving of legal advice by the courts or the answer to questions propounded from curiosity.” Bartsch v. Costello, 170 So.3d 83, 88 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1414a] (quoting Olive v. Maas, 811 So.2d 644, 657-58 (Fla. 2002) [27 Fla. L. Weekly S139a]. Declaratory relief in the insurance context is rendered by the trial court after determining the state of facts giving rise to the application of the policy provisions. See Northwest Center for Integrative Medicine & Rehabilitation, Inc. v. State Farm Mutual Automobile Ins. Co., 214 So.3d 679 (Fla. 4th DCA 2017) [42 Fla. L. Weekly D446b]. Plaintiff has sufficiently stated causes of action for declaratory relief in each of the counts asserted in the Amended Complaint.
There are three elements for the courts to consider in ruling on a motion to compel arbitration or appraisal of a given dispute: (1) whether a valid written agreement to appraisal exists; (2) whether an issue for appraisal exists; and, (3) whether the right to appraisal is waived. Heller v. Blue Aerospace LLC, 112 So. 3d 635(Fla. 4th DCA 2013) [38 Fla. L. Weekly D930a]. In this case, Plaintiff seeks the Court’s interpretation and construction of insurance policy language, including the appraisal provision itself. As a threshold matter, it has yet to be determined whether there exists a valid written agreement that calls for appraisal. In fact, the very declarations the Plaintiff seeks in this case involve the validity of the appraisal and limit-of-liability provisions in the policy2.
If the Court interprets and construes the agreement to appraise as valid, the next step is to determine whether an issue for appraisal exists. While appraisal is a preferred non-judicial method of dispute resolution, it is only appropriate when the sole issue to be decided is a determination of the amount of damages sustained by the insured. See Citizens Prop. Ins. Corp. v. Demetrescu, 137 So.3d 500 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D629a]; Citizens Prop. Ins. Corp. v. Michigan Condominium Ass’n, 46 So.3d 177 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D2369a]. In other words, an appraisable issue only exists when there is a dispute over money. In this case the Defendant does not even agree that the Plaintiff has standing. Appraisal is not appropriate when a case presents only issues of contract interpretation or coverage. Antencio v. U.S. Sec. Ins. Co., 676 So.2d 489 (Fla. 3d DCA 1996) [21 Fla. L. Weekly D1472a] (“Questions of policy interpretation and coverage are ordinarily for the court, rather than arbitrators or appraisers to decide.”); Broward Ins. Recovery Cntr., LLC (a/a/o Shane Bushman) v. Progressive Select Ins. Co., 24 Fla. L. Weekly Supp. 761a (Broward County Ct. Nov. 3, 2016) (Hon. Robert W. Lee) (“In the instant case, the operative issue is how the value of the loss should be determined, and making this determination is not within the purview of the appraisal process.”). This case presents issues of contract interpretation or coverage to be determined by the Court as a matter of law. Specifically, the Court must determine whether the term “cost to repair or replace” is ambiguous or capable of more than one reasonable interpretation. It is not an action for damages.
Further, appraisal for windshield glass repair or replacement is not contemplated by the appraisal provision in the policy. The provision requires the appraisers to determine the actual cash value and the amount of the loss. Neither of those determinations are necessary or even relevant when the issue is the meaning of the term “cost to repair” windshield glass. If appraisal was intended to determine the cost to repair or replace a windshield, the appraisal provision would say so. It does not. This Court is not at liberty to “rewrite contracts, add meaning that is not present, or otherwise reach results contrary to the intention of the parties.” Intervest Const. of Jax, Inc. v. Gen. Fid. Ins. Co., 133 So.3d 494, 497 (Fla. 2014) [39 Fla. L. Weekly S75a], quoting State Farm Mut. Auto. Ins. Co. v. Pridgen, 498 So.2d 1245, 1248 (Fla. 1986).
Defendant relies upon Progressive Select Ins. Co. v. Cornerstone Network, Inc. (a/a/o Dakota Sowell), Case No.: CACE 16-021830 (AW), FLWSUPP 2503SOWE, (Broward County, Circuit Court) (Appellate Capacity) (May 25, 2017) [25 Fla. L. Weekly Supp. 229b] and Progressive American Ins. Co. v. Broward Insurance Recovery Center, LLC (Isabella Cardona), Case No.: CACE 16-021757 (AW) (Broward County, Circuit Court) (Appellate Capacity) (May 26, 2017) (unpublished) for the proposition that appraisal is proper for windshield repairs, and should be employed instead of the judicial process. Those cases are distinguishable from the instant matter as they were lawsuits for breach of contract seeking only damages. They were not claims for declaratory relief like those raised by the Plaintiff in this case. Further, the Progressive damages cases involve different policies and provisions than the Allstate policy at issue here. In contrast to the Progressive cases the issues set forth in the Plaintiff’s complaint require judicial interpretation and declaratory relief involving terms in both the limit of liability and appraisal provisions in the policy.
The simple fact is that without a judicial interpretation as to the meaning and/or possible ambiguity of the term “cost to repair or replace” the Plaintiff faces the potential of being forced into an appraisal process without knowing whether the Defendant has complied with the limit of liability provision in its policy. While alternative dispute resolutions are favored by the courts they cannot be used as vehicles by either party to avoid the terms, conditions and construction of the contract which is subject of the suit.
For these reasons, Defendant’s Motion is hereby DENIED.
Since the Court is denying the Defendant’s Motion to Dismiss, it does not need to reach the issues of Allstate’s compliance (or lack thereof) with the appraisal provision by selecting AGIS, an appraiser whose disinterest is questioned by the Plaintiff, or whether appraisal should be precluded under the prohibitive cost doctrine. Those issues are moot.
__________________
1Plaintiff contends it is of vital import that AGIS has retained their own attorneys in the past to threaten repair facilities — including Auto Glass America, LLC — with litigation about the appraisal process.
2Curiously, Allstate maintains Plaintiff lacks standing for two reasons. First, Allstate argues Plaintiff lacks standing because the insured did not comply with the appraisal provision; therefore, according to Allstate, the right to additional payment did not vest in the insured so the insured had no rights or benefits to assign. Second, Allstate argues that the assignment of benefits constitutes a violation of Fla. Stat. § 626.854, which provides a definition of “public adjuster.” The Court makes no finding as to standing at this time.
