27 Fla. L. Weekly Supp. 325a
Online Reference: FLWSUPP 2703STEWInsurance — Automobile — Windshield repair — Appraisal — Prohibitive cost doctrine — Windshield repair shop is entitled to evidentiary hearing on applicability of prohibitive cost doctrine to insurer’s request for appraisal — Insurer is estopped from arguing against shop’s request for hearing where insurer has successfully argued in other cases that evidentiary hearing was required
BROWARD INSURANCE RECOVERY CENTER LLC, a/a/o Brenda Stewart, Plaintiff(s) / Petitioner(s) v. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant(s) / Respondent(s). County Court of the 17th Judicial Circuit in and for Broward County. Case No. COCE18020365, Division 51. April 3, 2019. Kathleen McCarthy, Judge. Counsel: Emilio R. Stillo and Andrew B. Davis-Henrichs, Emilio Stillo, P.A., Davie; and Mac S. Phillips, Phillips Tadros, P.A., for Plaintiff. Eric Shubow, Cole, Scott & Kissane, P.A., for Defendant.
ORDER GRANTINGORDER ON PLAINTIFF’S MOTION FOR EVIDENTIARYHEARING AS TO “PROHIBITIVE COST” DOCTRINE
THIS CAUSE having come on to be heard on March 21, 2019 on Plaintiff’s Motion for Evidentiary Hearing, the Court having received extensive oral argument, the Court having reviewed the file and the case law provided by the parties and the Court having been duly advised in the Premises, find as follows:Findings of Fact
1. Plaintiff filed a multi-count Amended Complaint seeking declaratory relief as to a variety of issues. In Count V, Plaintiff asserts that the application of the Prohibitive Cost Doctrine must vitiate any right of the Defendant to enforce the appraisal provision in the policy as the cost of appraisal significantly exceeds (a) the damages alleged by the Plaintiff in this and in other cases between these parties; and (b) the costs of litigation for an prevailing insured or assignee of insurance benefits by virtue of section 627.428, Florida Statutes.
2. Plaintiff alleges that it is the assignee of an insured who had their windshield repaired by Clear Vision Windshield Repair, LLC, the Plaintiff’s assignor of benefits, for which $90.10 was charged. Defendant paid $63.60, leaving the amount claimed to due to be $26.50. Once Defendant made payment at the lesser amount than was billed, the Defendant demanded appraisal.
3. The policy of insurance appraisal provision states in relevant part:
If we cannot agree with you on the amount of a loss, then we or you may demand an appraisal of the loss. Within 30 days of any demand for an appraisal, each party shall appoint a competent and impartial appraiser and shall notify the other party of that appraiser’s identity. The appraisers will determine the amount of loss. If they fail to agree, the disagreement will be submitted to an impartial umpire chosen by the appraisers, who is both competent and a qualified expert in the subject matter. If the two appraisers are unable to agree upon an umpire within 15 days, we or you may request that a judge of a court of record, in the county where you reside, select an umpire. The appraisers and umpire will determine the amount of loss. The amount of loss agreed to by both appraisers, or by one appraiser and the umpire, will be binding. You will pay your appraiser’s fees and expenses. We will pay our appraiser’s fees and expenses. All other expenses of the appraisal, including payment of the umpire if one is selected, will be shared equally between us and you. Neither we nor you waive any rights under this policy by agreeing to an appraisal.
(Emphasis added).
4. In support of this alleged cost differential, which it is alleged creates an economic deterrence to the Plaintiff in seeking judicial redress, Plaintiff filed an affidavit of its corporate representative, Steven A. Schaet, who testified that an appraiser’s fee would be $150.00 – $250.00. And this does not include the cost of an umpire.
5. Plaintiff also filed the transcript of Mr. Schaet’s deposition taken on February 12, 2019; the deposition of Defendant’s corporate representative Mark Root taken on January 16, 2016;1 a hearing transcript before the Honorable Robert W. Lee on February 26, 2018 in the case of Broward Insurance Recovery Center LLC (a/aa/o Orlando Ramos) v. Progressive American Insurance Company, Case No.: 17-009266 COCE 53; the transcript of a hearing before the Honorable Robert W. Lee on March 8, 2018 in the case of Broward Insurance Recovery Center LLC (Joann Evron) v. Progressive American Insurance Company, Case No.: 17-009248 COCE 53;2 the complaints and appellate records from various cases between these same two parties; and quotes from Safelite AutoGlass for the same work as that performed in the instant case.3
6. In this case, the Plaintiff requested that this court conduct an evidentiary hearing to determine the applicability of the prohibitive cost doctrine and whether the costs of enforcing the appraisal provision are higher than the amount of damages at issue and the litigation costs to Plaintiff in the instant case.
7. It is the Plaintiff’s position that the application of the appraisal clause to the instant action would be cost prohibitive and serve as a deterrent for glass shops and their assignees to secure their reimbursement rights. The average price for an appraisal approximates $200.00, which does not include an umpire fee. Plaintiff is still owed $26.50. Assuming no umpire is needed, Plaintiff will spend and be out of pocket $173.50 dollars after the appraisal process to recover $26.50.
8. This request follows the position of the Defendant in the Appellate briefs it has filed in similar cases alleging that the trial court erred in denying similar motions to compel appraisal because, in those cases, the trial court did not conduct an evidentiary hearing. See Progressive Amer. Ins. Co. v. Broward Ins. Recovery Cntr. (a/a/o Isabella Cardona) Case No.: 16-02757 CACE, Petition for Writ of Certiorari, Filed November 30, 2016, ; Lower Case No.:16-1166 COCE (56); Progressive Amer. Ins. Co. v. Broward Ins. Recovery Cntr. LLC (a/a/o Denise Schou) Case No.: 18-17912 CACE, Petition for Writ of Certiorari, Filed July 27, 2018,; Lower Case No.:17-003658 CONO (61); Progressive Select. Ins. Co. v. Broward Ins. Recovery Cntr. LLC (a/a/o Roger Messer) Case No.: 18-17505 CACE, Petition for Writ of Certiorari, Filed July 19, 2018, Page 30; Lower Case No.:17-002636 COWE (81).4
9. Progressive again urged that an evidentiary hearing was necessary prior to determining whether the prohibitive cost doctrine would be applicable in Broward Insurance Recovery Cntr. a/a/o Wilmer Rincon v. Progressive Select Ins. Co., Broward County Court Case No.: COWE 17-2556 (80), wherein on July 18, 2018, Progressive’s counsel stated this issue requires an evidentiary hearing.5
Conclusions of Law
· Florida courts have followed the precedent articulated by the United States Supreme Court in Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 90 (2000), which held that the existence of large arbitration costs that preclude a litigant from vindicating a legal right is a sufficient ground to render an arbitration agreement unenforceable.
· This position was expanded upon in Zephyr Haven Health & Rehab Cntr., Inc., v. Hardin, 122 So. 3d 916, 922 (Fla. 2d DCA 2013) [38 Fla. L. Weekly D2070a], when that court adopted the interpretation of Green Tree in Bradford v. Rockwell Semiconductors Systems, Inc., 238 F.3d 549 (4th Cir. 2001), and stated that:
But the court rejected the argument that fee-splitting provisions are per se unenforceable. Instead, it held that a case- by- case analysis is appropriate, focusing, ‘among other things, upon the claimant’s ability to pay the arbitration fees and costs, the expected cost differential between arbitration and litigation in court, and whether the cost differential is so substantial as to deter the bringing of claims.’
(emphasis added).
The court has reviewed other trial court rulings approving of the application of the Prohibitive Cost Doctrine, in Broward County and in other counties. See e.g., Broward Ins. Recovery Cntr. a/a/o Joann Evron) v. Progressive Amer. Ins. Co., COCE 17-9248 (53) (Brwd. Cty. Judge Robert Lee March 15, 2018), Vision Auto Glass of Fla., Inc., a/a/o Pam Salley v. Progressive Select Ins. Co., 2016-SC-6996 (Orange Cty. Judge Faye Allen March 13, 2017), cert. denied, 2017- CA-003344-O (Fla. 9th Jud. Cir., July 2, 2018).
There is no absolute right to compel appraisal as an alternative dispute resolution, as cases which address coverage issues, including policy interpretation, or inequities such as the prohibitive cost doctrine would supersede the policy’s appraisal provision. See e.g., Travis v. Amer. Manufacturers Mut. Ins. Co., Case No. 5-02- 0059 (IL 5th Dist. Appellate, December 24, 2002), wherein that court stated that:
Plaintiff’s amended complaint specifically focuses upon the appraisal provision and claims that the defendant inserts the appraisal provision into its policy as one way to effectuate its wrongful scheme, because insureds will forgo their unpaid claims rather than pursue the expensive appraisal process, especially because the disputed amount is virtually always worth less than the cost of pursuing appraisal. * * * This language establishes that plaintiff’s amended complaint presents much more than a disagreement between the parties concerning the actual cash value of the vehicle. Accordingly, the dispute is not covered by the appraisal clause and the trial court did not err in denying defendant’s motion to compel an appraisal.
The Plaintiff has made a sufficient proffer to establish the application of the prohibitive cost doctrine subsequent to warrant an evidentiary hearing on the issue of the anticipated cost of the appraisal process, the damages sought by Plaintiff and the litigation costs to Plaintiff so as to permit the Court to determine whether the cost differential would create a deterrence to the pursuance of claims by the Plaintiff against the Defendant. At this point, it is up to Defendant to establish why this Court should not take evidence on this issue. Curiously, Defendant now argues this Court should not hold an evidentiary hearing although it vociferously argued that an evidentiary hearing was required in the other cases referenced above.
The Defendant’s position is not well taken for a variety of reasons.
First, the Defendant is judicially estopped from arguing against Plaintiff’s request for an evidentiary hearing. In Progressive Amer. Ins. Co. v. Broward Ins. Recovery Cntr. (a/a/o Isabella Cardona) Case No.: 16-02757 CACE, Final Order Granting Petition for Writ of Certiorari, Filed May 25, 2017; Lower Case No.:16-1166 COCE (56), among other cases presented by Plaintiff, Progressive argued that an evidentiary hearing was required. And now Progressive argues the opposite. The general rule of judicial estoppel in Florida is as follows:
A claim or position successfully maintained in a former action or judicial proceeding bars a party from making a completely inconsistent claim or taking a clearly conflicting position in a subsequent action or judicial proceeding, to the prejudice of the adverse party, where the parties are the same in both actions, subject to the “special fairness and policy considerations” exception to the mutuality of parties requirement.
Grau v. Provident Life & Acc. Ins. Co., 899 So. 2d 396, 400 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D847a]. At the hearing, Defendant admitted that it previously took an inconsistent position, but said that it was a result of not having done the appropriate research on the subject. Specifically, defense counsel stated that Defendant performed additional research since arguing that an evidentiary hearing was required and now, Defendant thinks Plaintiff is not entitled to an evidentiary hearing. Regardless of why Defendant previously argued for an evidentiary hearing and now argues against it, Defendant is judicially estopped from opposing an evidentiary hearing because it previously and successfully argued the opposite.
Second, although courts tend to favor alternatives to litigation when the dispute is only about the amount of a loss,6 the right to engage in ADR — contractual or otherwise — is not absolute. See, e.g., Chaikin v. Parker Waichman, LLP, 253 So.3d 640, 643 (2d DCA 2017) [42 Fla. L. Weekly D2165b]. To that end, it has been held that it is reversable error to compel appraisal before conducting an evidentiary hearing. Blakely v. First Protective Ins. Co., 260 So.3d 1200 (Fla. 3d DCA 2019) [44 Fla. L. Weekly D312a].
Third, the cases cited by the Defendant are inapposite to the issues in the instant case. For example, Defendant contends McKenzie Check Advance of Fla LLC v. Betts, 122 So.3d 1176, 1186 n.7 (Fla. 2013) [38 Fla. L. Weekly S223a], stands for the proposition that Green Tree’s holding cannot be extended outside the context of arbitration clauses when federal statutory rights are implicated; see, also, AT & T Mobility, LLC v. Concepcion, 131 S.C. 1740 (2011) [22 Fla. L. Weekly Fed. S957a]. In Conception, the United States Supreme Court held that the Federal Arbitration Act (the “FAA”) preempts state laws invalidating arbitration agreements that contain class action waivers as void against public policy. See, also, Citibank v. Desmond, 114 So.3d 401, 401 (4th DCA 2013) [38 Fla. L. Weekly D1175a] (same). But the instant case does not involve the public policy conflict between arbitration clauses and class action waivers or any other issues regarding preemption.
For these reasons, it is
ORDERED and ADJUDGED that Plaintiff is entitled to an evidentiary hearing as to the prohibitive cost doctrine.
__________________
1Mark Root’s deposition indicates that the Defendant uses a company called Safelite Solutions, LLC (“Safelite”) to administer billing with regards to glass claims (p.65). Mr. Root also testified that Safelite has the authority to request documentation from glass shops on behalf of Progressive and to author documentation on Progressive’s behalf (pp. 68, 95). Mr. Root also testified that Safelite maintains a network of glass facilities that Progressive designates as its “in-network” shops (p.131). Finally, Mr. Root testified that if Safelite AutoGlass (Safelite Solutions, LLC’s sister company) performs the work itself, it is not bound by the “in network” rate (p.133).
2At the hearing in the Joann Evron case, defense counsel advised Judge Lee that the manner by which Progressive computed the amount it paid was proprietary and privileged.
3Plaintiff further argues that Defendant is using the appraisal provision to avoid application of the limit of liability provision in the policy. Ordinarily an insurer would be the party urging the application of any policy language limiting the insurer’s liability. The limit of liability provision at issue states:
2. Payments for loss to a covered auto, non-owned auto, or custom parts or equipment are subject to the following provisions:
d. In determining the amount necessary to repair damaged property to its pre-loss physical condition, the amount to be paid by us:
(i) will not exceed the prevailing competitive labor rates charged in the area where the property is to be repaired and the cost of repair or replacement parts and equipment, as reasonably determined by us; and
(ii) will be based on the cost of repair or replacement parts and equipment which may be new, reconditioned, remanufactured, or used, including, but not limited to:
(a) original manufacturing parts of equipment; and
(b) nonoriginal manufacturing parts or equipment.
Plaintiff further contends that Safelite AutoGlass is the largest repair facility in Florida and its sister company, Safelite Solutions, LLC, handles the claims process for Defendant. Plaintiff contends a review of Safelite AutoGlass’s charges for windshield repairs (filed with the Court) clearly indicates that Safelite AutoGlass’s charges are well in excess of the charges in the instant action for the same type of repair work. Although interesting, that is a different issue for a different day.
4See e.g., Page 30 of the Petition for Writ of Certiorari, Filed July 19, 2018, Progressive Select. Ins. Co. v. Broward Ins. Recovery Cntr. LLC (a/a/o Roger Messer), Case No.: 18-17505 CACE (p. 30), in which Progressive argues that Plaintiff “provides no evidence, however, that it is unable to pay the appraisal fees and costs, nor did it provide any evidence. . . regarding the expected cost differential between appraisal and litigation in court.”
5See Hearing Transcript at page 61, lines 10-25:
THE COURT: Okay. Counsel for the defense do you agree that the issue of prohibitive cost has not been addressed by the Seventeenth?
MR. SCHUESSLER (Progressive’s attorney): Um.
THE COURT: Ad if not why?
MR: SCHUESSLER: Procedurally they couldn’t.
THE COURT: Okay.
MR: SCHUESSLER: Because, like I said, it requires an evidentiary hearing.
THE COURT: And it wasn’t before them.
MR. SCHUESSLER: Right.
THE COURT: In that motion or in that case that went there.
MR. SCHUESSLER: Correct.
6A review of the Amended Complaint reveals that Plaintiff challenges Defendant’s insistence on appraisal for several reasons, including that this action for declaratory relief raises issues of contract interpretation as opposed to simply a case over the amount of the loss.
