28 Fla. L. Weekly Supp. 427b

Online Reference: FLWSUPP 2805RUDO

Insurance — Automobile — Windshield repair — Appraisal — Where valid written agreement for appraisal exists and has not been waived, and issue in matter is amount of loss, compliance with appraisal provision is mandatory condition precedent to suit — If appraiser is found to be partial, correct course of action is to permit appointment of another appraiser, not to invalidate appraisal provision — Prohibitive cost doctrine is not applicable — Motion to dismiss is granted

BROWARD INSURANCE RECOVERY CENTER, LLC, a/a/o Lynn Rudolph, Plaintiff, v. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. COCE-17-003761, Division 55. August 15, 2019. Daniel J. Kanner, Judge. Counsel: Emilio Stillo, Emilio Stillo P.A., Davie, and Joseph Dawson, Law Offices of Joseph R. Dawson, P.A., Fort Lauderdale, for Plaintiff. Daniel Montgomery, Cole, Scott & Kissane, P.A., Jacksonville, for Defendant.

ORDER GRANTING DEFENDANT’SMOTION TO DISMISS AMENDED COMPLAINT

THIS CAUSE having come before the Court on Defendant’s Motion to Dismiss Amended Complaint and the Court having heard argument of counsel on July 16, 2019, and being otherwise advised in the Premises, it is hereupon:

Background

Plaintiff, Broward Insurance Recovery Center, is the assignee of Clear Vision Windshield Repair, LLC, the assignee of Lynn Rudolph (“Insured”). Plaintiff brings a Complaint for declaratory relief against Defendant, Progressive American Insurance Company. This event stems for services performed by Clear Vision Windshield Repair, LLC for windshield repair services performed to the Insured’s vehicle.

Clear Vision Windshield Repair, LLC submitted an invoice to Defendant who subsequently paid less than the invoiced amount. Defendant invoked appraisal by mailing their notice of invocation of appraisal to Clear Vision Windshield Repair, LLC prior to the filing of suit.

Plaintiff’s Complaint asserts the following requests for relief: (1) the interpretation of the terms “prevailing competitive labor rate rates charged” and “cost of repair and replacement” are unclear and ambiguous as the exact method used to define those terms has not been disclosed; (2) Plaintiff needs to know the method used to be able to ascertain whether there is an actual dispute; (3) that Defendant has failed to select an impartial appraiser; (4) that the appraisal provision has been invalidly applied; and (5) the appraisal provision violates the Prohibitive Cost Doctrine.

Defendant argues that the issue is the value of the loss and that action should be dismissed because Plaintiff failed to complete a condition precedent to bringing this lawsuit by failing to participate in an appraisal process expressly required pursuant to the Progressive Automobile Insurance Policy executed by and between Progressive and Rudolph.

Legal Findings

In this instance, a valid written agreement for appraisal exists and the defendant has not waived its right to appraisal. The issue in this matter is the amount of the loss. Appraisal is the appropriate mechanism to determine the amount of the loss. Compliance with the subject policy’s appraisal provision is a mandatory condition precedent to the filing and maintaining of the subject lawsuit. See U.S. Fire Ins. Co. v. Franko, 443 So.2d 170, 172 (Fla. 1st DCA 1983); United Community Insurance Company v. Lewis, 642 So. 2d 59 (Fla. 3d DCA 1994).

The 17th Circuit Appellate Court decided similar, if not identical, issues in Cornerstone Network, Inc. a/a/o Dakota Sowell v. Progressive Select Insurance Company, Case No: CACE 16-021830 [25 Fla. L. Weekly Supp. 229b], Progressive American Insurance Company v. Broward Insurance Recovery Center, LLC a/a/o Isabella Cardona, Case No.: CACE 16-021757 et al.¹ While this Court is not bound by these decisions, their findings are instructional.

Counts I, II, and IV of Plaintiff’s Complaint all challenge the method Defendant used to calculate the value of the initial payment. Count II seeks discovery as to the method used by Defendant to come its value of loss. This request is premature in that Plaintiff has failed to complete appraisal, an action required to actually determine if there is a disputed amount and to challenge the method used by Defendant.²

Count III seeks to invalidate the appraisal provision by allegations that Defendant has not complied with the policy requirement that the appraisal be impartial. In a situation where an appraiser is found to be partial, the correct course of action is to permit the party to appoint another appraiser, not invalidate the appraisal provision. Travelers of Fla. v. Stormont, 43 So. 3d 941, 945 (3d DCA 2010) [35 Fla. L. Weekly D2059a].

Count IV seeks to invalidate the appraisal provision through the Prohibitive Cost Doctrine. Plaintiff asserts that it is entitled to an evidentiary hearing to establish that the appraisal provision is prohibitively costly. The Prohibitive Cost Doctrine is derived from the U.S. Supreme Court’s ruling in Green Tree Financial Corp. v. Randolph, 531 U.S. 79 (2000). In Green Tree, the Supreme Court acknowledged that an arbitration clause could be rendered unenforceable where the existence of substantial arbitration costs would otherwise prohibit a litigant from effectively vindicating his or her federal statutory right.

In this instance, the Plaintiff has not demonstrated a statutory right that would not be vindicated by going through appraisal, but has argued that they would not be entitled to an ancillary right to attorney’s fees pursuant to 627.428.³

Progressive admitted coverage for the loss making the only dispute in this matter the amount of the loss. Appraisal is a relatively informal and inexpensive method to determine the amount of a loss.⁴ Pursuant to the policy, if either party demands appraisal it must be performed prior to filing lawsuit.

Wherefore it is Ordered and Adjudged:

Defendant’s Motion to Dismiss is granted. The case is dismissed without prejudice.

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¹While this case was certiorari review, the 17th Circuit found that it was outside the essential requirements of law to deny appraisal on the same policy addressed in the instant case where Plaintiff presented the Prohibitive Cost doctrine to the trial court, and within its appellate briefs. The 17th Circuit held that “contrary to Respondent’s arguments and the trial court’s order, the dispute is purely a question about the amount of loss which falls within the scope of appraisal.”

²Linda Enger v. Allstate Property and Casualty Company, Case No. 09-17785 (9th Ct., U.S. Ct. App. December 9, 2010) (dismissing the declaratory relief action holding that a claim for declaratory relief in instances regarding the allegations of undervalue of paid claim by utilization of an improper valuation method is purely a value question that must go through appraisal and claims that appraisal provision should be disregarded or waiver were unpersuasive).

³While attorney’s fees are a substantive right this Court finds that it is not a right to a cause of action, but a right that is derived upon judgment in favor of the Plaintiff.

⁴Richard Bettor v. Esurance Property and Casualty Insurance Company (So. Dist. Fla., U.S. Dist. Ct. Case No. 18-61860-CIV-MORENO/SELTZER) (holding that appraisal provision in policy applies to claims for declaratory judgment and breach of contract as a condition precedent; that appraisal provision which allowed either party to invoke, pay their own cost of their chosen appraiser, spilt umpire fee, and agree to be bound by results of appraisal is not unconscionable; recommending Motion to Compel Appraisal and Motion to Dismiss be GRANTED; and Plaintiff’s Amended Complaint be DISMISSED and Plaintiff is compelled to submit claim to appraisal);