25 Fla. L. Weekly Supp. 294a
Online Reference: FLWSUPP 2503DRANInsurance — Automobile — Appraisal — Motion to dismiss and/or abate and motion for protective order invoking appraisal provision of policy are denied — Appraisal is not appropriate where insured seeks to invalidate limits of liability provisions of policy and where damaged parts can be repaired or replaced — Where insured contends that insurer’s selected appraiser is not disinterested, as is required by policy, court will allow discovery on that issue
BROWARD INSURANCE RECOVERY CENTER, LLC (a/a/o Harry Drangsland), vs. ALLSTATE INSURANCE COMPANY. County Court, 17th Judicial Circuit in and for Broward County. Case No. 16-009865 COWE (82). May 8, 2017. Jennifer W. Hilal, Judge. Counsel: Emilio R. Stillo, and Andrew B. Davis-Henrichs, Emilio Stillo P.A., and Lawrence Kopelman, Lawrence M. Kopelman, P.A., for Plaintiff. Kyle Maxson, for Defendant.
ORDER ON DEFENDANT’S MOTION TO DISMISSPLAINTIFF’S AMENDED COMPLAINT AND/ORABATE AND MOTION FOR PROTECTIVE ORDER
THIS CAUSE came before the Court on April 24, 2017 for hearing on Defendant’s Motion to Dismiss Plaintiff’s Complaint and/or Abate and Motion for Protective Order, 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 to Dismiss is hereby DENIED. The Motion to Abate and Motion for Protective Order are hereby DENIED for the reasons set forth below.
Background: The Plaintiff seeks a decree as to several matters which include the interpretation and application of policy language.
The Defendant filed its Motion to Dismiss and/or Abate and Motion for Protective Order, purportedly invoking the appraisal provision of the policy and previously naming Auto Glass Inspection Services (“AGIS”) as its chosen appraiser.
The Allstate contract of insurance provides for appraisal to be used when there is a dispute as to the property damage with the following language:
[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; or
3. $500, if the loss is to a covered trailer not described on the Policy Declarations.
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 basis, including: 1) that appraisal is an inappropriate process to resolve equitable claims such as declaratory relief; 2) that Allstate’s appraisal provision does not apply to repair and replacement of windshields; 3) Defendant’s chosen appraiser AGIS does not meet the policy requirement that each side choose a “disinterested” appraiser; and 4) that the cost of the appraisal 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.
The Plaintiff contends that the primary issue in this case is an insurance coverage issue, for which appraisal is not an appropriate mechanism of dispute resolution because appraisal should only be used when the sole issue is the amount of the damages sustained. Plaintiff further contends that appraisal was permitted to be invoked only when there was a dispute as to the actual cash value of the vehicle, since the appraisers are required to state separately the actual cash value and the amount of loss. When the insurer determines that the part can be repaired or replaced, the actual cash value of the property 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. There is no language in the appraisal process to determine the cost to repair or replace the property or part since appraisal was never intended to apply to this scenario.
Additionally, Plaintiff seeks a declaration that Defendant’s appointed appraiser, AGIS, is not “disinterested” as is required by the policy of insurance. 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 “AGIS 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 argues this Court should find the appraisal provision is unenforceable, and illusory because the expense to enter appraisal is prohibitive upon both the insured and Plaintiff. Under the appraisal provision at issue, it requires that each party bears the costs of its own appraisal and split the costs for the umpire.
Conclusions of Law: Appraisal should not be ordered until a determination as to whether the demand for appraisal is ripe. Citizens Property Insurance Corporation v. Admiralty House Inc., 66 So.3d 342 (Fla. 2d DCA 2011) [36 Fla. L. Weekly D1436a].
While an appraisal is a preferred non-judicial method of dispute resolution, it must only be used in cases where 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].
Since the Plaintiff seeks to invalidate the limit of liability provision in the insurance contract for being vague and ambiguous, this creates a coverage issue which falls within the sole jurisdiction of the trial court rather than the employment of the non-judicial remedy of the appraisal process. Atencio 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.”). Further, appraisal was never intended to apply to the cost to repair or replace property or parts since appraisers must make a determination as to the actual cash value which is irrelevant in determining the cost to repair or replace the property.
A party violates the policy of insurance when they select an appraiser who is not “disinterested”. Florida Ins. Guar. Ass’n v. Branco, 148 So. 3d 488 (Fla. 5th DCA 2014) [39 Fla. L. Weekly D2020a]. Further, other Courts have allowed discovery as to whether AGIS is “disinterested”. Clear Vision Windshield Repair LLC (a/a/o Neville Gibbs) v. Progressive Select Insurance Company, 23 Fla. L. Weekly Supp. 480a (Broward County Court, September 2, 2015) (Hon. Peter B. Skolnik); Clear Vision Windshield Repair LLC (a/a/o Matthew White) v. Allstate Insurance Company (Broward County, COCE-15-024178) (unpublished decision of Hon. Alan R. Marks). The Court will allow discovery as it relates to whether AGIS can serve as a “disinterested” appraiser based upon the evidence presented by Plaintiff.
Courts have also considered whether appraisal provisions may be illusory in the context of the small monetary amounts of windshield damage cases. 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) (“. .the Court notes that the small amount in dispute here compared to the costs of an appraisal renders the process illusory for all intents and purposes. To hold otherwise would in the Court’s view, effectively close all meaningful means of redress to those who suffer windshield damage under a progressive policy.”). The Court will consider application of the “Prohibitive Cost” doctrine at a later time.
Defendant’s Motion to Dismiss is hereby DENIED. Defendant’s Motion to Abate and Motion for Protective Order are hereby DENIED.
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1Plaintiff contends it is of vital import that AGIS has retained their own attorneys in the past to threaten repair facilities with litigation during the appraisal process.
