26 Fla. L. Weekly Supp. 436b
26 Fla. L. Weekly Supp. 421aOnline Reference: FLWSUPP 2605GOLDInsurance — Automobile — Windshield repair — Appraisal — Declaratory action alleging that insurer improperly reduced charges for windshield repair is dismissed without prejudice pending completion of appraisal — Compelling appraisal is appropriate where valid written agreement for appraisal is contained in policy, dispute as to amount of loss is appropriate for appraisal, and insurer did not waive right to appraisal — Argument that appraisal provision is void under prohibitive cost doctrine cannot be considered where plaintiff has not made showing that cost of appraisal would be prohibitively expensive — No merit to arguments that appraisal is premature because dispute is not about amount of loss but about policy’s limits of liability provision and that requiring plaintiff to pay cost of appraisal would result in de facto deductible in violation of section 627.7288
BROWARD INSURANCE RECOVERY CENTER, LLC a/a/o Howard Goldberg, Plaintiff, v. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. COCE 16-000472 (54). May 29, 2018. Rehearing Denied June 14, 2018. Florence Taylor. Barner, Judge. Counsel: Emilio R. Stillo, Emilio Stillo, P.A., Davie; Joseph R. Dawson and Rowena M. Racca, Law Offices of Joseph R. Dawson P.A., Fort Lauderdale, for Plaintiff. Jessica L. Pfeffer, Kevin P. Sincerbox and Antonio Roldan, Progressive PIP House Counsel, Fort Lauderdale, for Defendant.
OMNIBUS ORDER ON DEFENDANT’S MOTION TODISMISS, OR ALTERNATIVELY, DEFENDANT’S MOTION TOABATE OR STAY AND MOTION TO ENFORCE APPRAISAL
THIS CAUSE having come on to be heard on April 30, 2018, on Defendant’s Motion to Dismiss, or Alternatively, Defendant’s Motion to Abate or Stay and Motion to Enforce Appraisal, the Court having reviewed the filings, received argument of counsel and having otherwise been duly advised in the Premises, finds as follows:
Findings of Fact
This is a consolidated hearing arising out of sixteen (16) separate cases involving separate incidents of property damage. Each case involves the same parties and similar operative facts wherein the insurer suffered windshield damage and sought repair. The insured assigned to the repair facility the right to collect the costs of repair directly from Progressive. In turn, the repair facility billed Progressive, but did not receive the full amount it believed was due.
On or about the same time the reduced payment was made, Progressive notified the repair facility and the insured through correspondence that the insurance contract provides that appraisal is the method to be used to resolve any disagreement with respect to the amount of the payment. Thereafter, the repair facility assigned to the Plaintiff the right to seek unpaid portion of the bill which ranges between the amounts of $26.50 and $26.75, which are significantly less than the cost associated with appraisal which was $55.001, at a minimum and it can go up to $150.002 per claim.
Arguments of the Parties
Plaintiff’s properly filed Amended Complaint contained six (6) counts of declaration action against Progressive alleging that the amount reimbursed for the repairs were improperly reduced as the language contained in the applicable Limits of Liability section is vague and it is ambiguously written in that it is susceptible to more than one reasonable interpretation; and that the appraisal clause should not be enforced in this claim based upon the following legal theories:
1. Defendant’s request to compel appraisal creates a de facto deductible in that it obligates the Plaintiff to pay a charge, i.e. an appraisal fee, in order to be reimbursed for a windshield repair, which is contrary to Florida Statute § 627.7288, as insurers are not permitted to impose a deductible related to the payment for repair of windshield damage.
2. Because the cost for the appraisal exceeds the amount in controversy, it would effectively deny the insured’s constitutional right of access to the court by rendering it economically prohibitive to seek meaningful means of redress regarding the appropriate amount of reimbursement to which the Plaintiff is entitled for the windshield damage repair, the Prohibitive Cost Doctrine.
3. Further, Plaintiff argued that if the appraisal procedure was implemented as requested by the Defendant, the Plaintiff would be effectively prohibited from seeking judicial scrutiny and review of its allegation that the language in the policy’s limitation of liability is vague and ambiguous and whether the Defendant is utilizing a method of determining the amount of reimbursement for the services provided which is consistent with that limitation clause.
In response to the Amended Complaint, Progressive sought to dismiss, or alternatively, abate or stay the case, and to enforce the appraisal clause. Plaintiff disputes that the appraisal clause is enforceable or alternatively asserts that there are factual and legal issues that are required to be resolved by the Court in order to make these matters ripe for appraisal.
Analysis
There are three elements for courts to consider in ruling on a motion to compel arbitration/appraisal of a given dispute: (1) whether a valid written agreement to arbitrate exists; (2) whether arbitratable issue exists; and (3) whether the right to arbitration/appraisal was waived. Heller v. Blue Aerospace, LLC, 112 So.3d 635 (Fla. 4th DCA 2013) [38 Fla. L. Weekly D930a]. Here, although the provision in the insurance contract is for appraisal and not arbitration, the abovementioned analysis applies equally the same. Prestige Protective Corp. v. Burns Intern. Security Services Corp., 776 So.2d 311, 314 (Fla 4th DCA 2001) [26 Fla. L. Weekly D101b] (Florida law enforces agreements to various forms of alternative dispute resolution just as binding arbitration agreements are enforced).
The Court has considered the three elements in this matter. First, the Court finds that a valid agreement for appraisal existed in the subject policy of insurance.
While Plaintiff argues the court should find the subject appraisal provision void based on the Prohibitive Cost Doctrine, the Court cannot consider this argument as Plaintiff has not made the necessary evidentiary showing to bring the issue before the Court. See Green Tree Financial Corp., Alabama v. Randolph, 531 US 79, 121 S.Ct. 513, 148 L.Ed.2d 737 (2000) (a party seeks to invalidate an arbitration agreement on the ground that arbitration would be prohibitively expensive, that party bears the burden of showing the likelihood of incurring such costs. . .additionally, a litigant seeking to invalidate an appraisal provision on grounds it is prohibitively expensive is also required to make an evidentiary showing of an inability to pay); Zephyr Haven Health & Rehab Center, Inc. v. Hardin, 122 So3d 916 (Fla 2nd DCA 2013) [38 Fla. L. Weekly D2070a] (a litigant must make some showing of individualized prohibitive expense to invalidate an arbitration agreement on the ground that fee splitting would be prohibitively expensive. . .a litigant must also make an evidentiary showing that they will actually be paying any and all costs of appraisal, not their attorney); and Fi-Evergreen Woods, LLC v. Estate of Vrastil, 38 Fla. L. Weekly D1710g, D1711-12 (Fla. 5th DCA Aug. 16, 2013) (determining that an arbitration fee schedule and unauthenticated fee statements from similar but unrelated cases are insufficient to meet the requisite burden)
As it relates to the second element, whether an arbitratable issue exists therefore, the Court finds the issue at hand in the subject matter is appropriate for appraisal. Here, Defendant has never denied coverage of these claims. “When the insurer admits that there is a covered loss, but there is a disagreement on the amount of loss, it is for the appraisers to arrive at the amount to be paid.” Johnson v. Nationwide Mut. Ins, Co., 828 So.2d 1021, 1025 (Fla. 2002) [27 Fla. L. Weekly S779a] (quoting Gonzalez v. State Farm Fire & Cas. Co., 805 So.2d 814, 816-17 (Fla. 3d DCA 2000) [25 Fla. L. Weekly D2614b]. Further, the subject Policy’s appraisal clause clearly states the appraisers are to determine the amount of loss. The appraisal provision does not contain language which requires the appraiser to determine the amount of loss “under this policy” or “payable”. The absence of this language is a decisive factor. State Farm Fire & Casualty Company v. Middleton, 648 So. 2d 1200, 1202 (Fla. 3rd DCA 1995) [20 Fla. L. Weekly D99b].
Plaintiff argues appraisal is premature by alleging that the dispute is not over amount of loss, but rather over the subject Policy’s limits of liability provision. The Court rejects this argument as the dispute in this case is clearly over amount of loss. . .and not determine the amount of loss based on the Defendant’s liability pursuant to the terms of the subject Policy. Accordingly, any purported arguments regarding policy language or litigation involving the Policy’s limits of liability provision are irrelevant and premature at this time. See State Farm Fire & Casualty Company v. Middleton, 648 So. 2d 1200 (Fla. 3rd DCA 1995) [20 Fla. L. Weekly D99b]. The 17th Circuit Appellate Court has also considered and rejected Plaintiff’s arguments in virtually identical matters. The circuit court ruled that “contrary to Plaintiff’s assertions, the dispute is purely a question about the amount of loss”, and found that the filing of a lawsuit to resolve the dispute was improper. See Progressive Select Insurance Company v. Cornerstone Network, Inc. a/a/o Dakota Sowell, 4th DCA # 17-1992; Appellate Court Case No. CACE 16-021830 (AW); County Court Case No. COCE 15-026495 (56) [25 Fla. L. Weekly Supp. 229b], et al filed in Defendant’s Notice of Supplemental authority in support of its Motion to Dismiss. Accordingly, the parties were bound to appraisal upon disagreement of the costs.
Based on the foregoing, this Court finds that compliance with the subject policy’s appraisal provision is a mandatory condition precedent to the filing and maintaining of the subject lawsuit. U.S. Fire Ins. Co. v. Franko, 443 So.2d 170, 172 (Fla. 1st DCA 1983) (once an appraisal clause is properly invoked, appraisal becomes a condition precedent to right of an insured to maintain an action on the policy); See also United Community Insurance Company v Lewis, 642 So. 2d 59 (Fla. 3d DCA 1994) (an appraisal clause contained in an insurance contract acts as a condition precedent to bringing a claim under that contract. . .if one party to the insurance contract demands appraisal under the contract the proper action is dismissal of the action until the condition precedent has been met).
The Court finds Progressive has not waived its right to appraisal. See Travelers of Florida v. Stormont, 43 So.3d 941 (Fla. 2010) [35 Fla. L. Weekly D2059a] (a waiver of right to arbitrate occurs only when a party engages in conduct inconsistent with that right).
Further, this Court finds no merit in the argument that requiring Plaintiff to pay any costs associated with appraisal would violate F.S. 627.7288 and result in a de facto deductible. Section 627.7288 clearly provides that only a deductible shall not be applicable to windshield damage, and deductibles are well defined by Florida law.3 If this Court were to accept Plaintiff’s interpretation of the statute it would lead to an absurd result.
Once appraisal is properly invoked, it becomes a condition precedent to right of insured to maintain an action on the policy. U.S. Fire Ins. Co. v. Franko, 443 So.2d 170, 172 (Fla. 1st DCA 1983). An appraisal clause contained in an insurance contract acts as a condition precedent to bringing a claim under that contract. United Community Insurance Company v. Lewis, 642 So.2d 59 (Fla. 3d DCA 1994). If one party to the insurance contract demands appraisal under the contract the proper action is dismissal of the action until the condition precedent has been met. Id.
Although not argued by Plaintiff at hearing, the Court has reviewed the arguments presented in Count 4 of Plaintiff’s Amended Complaint and rejects those arguments as a basis for finding the subject appraisal provision to be invalid.
ORDERED AND ADJUDGED that said Motion be, and the same is hereby GRANTED. This case is hereby dismissed without prejudice pending completion of appraisal.
__________________
1Plaintiff’s Response to Defendant’s Motion to Dismiss, or Alternatively, Defendant’s Motion to Abate or Stay and Motion to Enforce Appraisal attaches Progressive’s Answer to Interrogatory ¶10 in the case, Clear Vision Windshield Repair, LLC (a/a/o Jennifer Beckles) v. Progressive American Ins. Co., Case Number, COCE14-018722 [23 Fla. L. Weekly Supp. 486a] which states the following:
Question: Please state what AGIS [Progressive’s selected appraiser] charges the Defendant [Progressive] per appraisal.
Answer: $55 per appraisal. If the appraisal process proceeds to a neutral umpire, an additional $75 is charged.
2Affidavit of an Appraiser, Stuart Raskin stating his fee to appraise a windshield claim is $150.00.
3See General Star Indemnity Company v. West Florida Village Inn, Inc., 874 So.2d 26, 33-34 (Fla. 2d DCA 2004) [29 Fla. L. Weekly D1070b]; Int’l Bankers Ins. Co. v. Arnone., 552 So.2d 908, 911 (Fla.1989); Mercury Ins. Co. of Florida v. Emergency Physicians of Cent., 182 So.3d 661 (Fla. 5th DCA 2015) [40 Fla. L. Weekly D2364a].
__________________ORDER DENYING PLAINTIFF’S MOTION FORREHEARING AND REQUEST FOR EVIDENTIARY HEARING
THIS CAUSE having been heard before this Court upon Plaintiff’s Motion for Rehearing and Request for Evidentiary Hearing, the Court having reviewed the motion, attachments, the file, and being fully advised in the premises, it is hereby,
ORDERED AND ADJUDGED that Plaintiff’s Motion for Rehearing and Request for Evidentiary Hearing is DENIED.
