Florida Insurance Guaranty Association v. Branco, ___ So. 3d ___, 39 Fla. L. Weekly D2020 (Fla. 5th DCA September 19, 2014)
The homeowners sued their insurer for breach of contract because it denied coverage for their sinkhole loss. After the lawsuit was filed, the insurer became insolvent, the Florida Insurance Guaranty Association (FIGA) assumed responsibility for the homeowners’ claim, and the homeowners amended their complaint to substitute FIGA as the defendant. When FIGA’s answer to the amended complaint admitted that a covered loss occurred, the homeowners filed a single request for admissions and moved to compel appraisal. The trial court ordered the parties to submit to neutral evaluation and, if unsuccessful, then appraisal. FIGA appealed to the extent that the order required appraisal. FIGA contended that its dispute with the homeowners involved the method of repair, a coverage issue, rather than the amount of loss, a valuation issue. The appellate court disagreed holding that a dispute over the method of repair is a valuation issue rather than a coverage issue. Deciding upon the appropriate method of repair is a necessary step in determining the cost of repairs. The homeowners did not waive appraisal by suing their insurer for breach of contract because the insurer had denied coverage at that point, and coverage may not be resolved through the appraisal process. Once FIGA admitted coverage, the homeowners demanded appraisal. Filing a single request for admissions was insufficient to constitute a waiver. The trial court did err by allowing the homeowners to appoint their own lawyer as their appraiser because the policy required “disinterested” appraisers, and a lawyer for one of the parties is not disinterested because he owes a fiduciary duty to his client.