INSURANCE: HOMEOWNER’S INSURANCE: SINKHOLE DAMAGE: JUSTICIABLE CLAIM AROSE WHEN INSURER DENIED COVERAGE FOR SINKHOLE DAMAGES: CONDITIONS PRECEDENT INVOLVING VALUATION OF LOSS WERE INAPPLICABLE BECAUSE INSURER DENIED COVERAGE ENTIRELY: INSURER HAD NO DUTY TO INDEMNIFY BEFORE INSURED ENTERED INTO CONTRACT FOR SUBSURFACE REPAIRS: INSURER WAS NOT LIABLE FOR PREJUDGMENT INTEREST BECAUSE INSURED’S FAILURE TO ENTER INTO CONTRACT FOR SUBSURFACE REPAIRS WAS FACTOR BEYOND CONTROL OF INSURER WHICH REASONABLY PREVENTED PAYMENT; CIVIL PROCEDURE: SUMMARY JUDGMENT

Tower Hill Select Insurance Company v. McKee, ___ So. 3d ___, 39 Fla. L. Weekly D1756 (Fla. 2d DCA August 20, 2014)

The insurer denied coverage for the insured’s timely sinkhole claim because its expert concluded that sinkhole damage had not occurred.  As a result, the insured retained his own expert, who concluded that sinkhole damage had occurred.  When the insurer ignored the insured’s request for reconsideration of his claim based upon his expert’s report, the insured sued the insurer for breach of contract and obtained summary judgment for damages and prejudgment interest.  The appellate court affirmed in part.  The court rejected the insurer’s contention that the lawsuit was premature because a cause of action did not exist when the complaint was filed.  “When [the insurer] denied coverage a valid dispute as to the existence of a covered loss under the insurance policy arose. . . .  Accordingly, [the insured’s] complaint properly sought a determination as to whether [the insurer] breached the insurance contract by denying coverage of a covered loss.”  Although the insurer contended that the insured failed to comply with conditions precedent, the conditions raised by the insurer applied only to valuation disputes after an admission of coverage and were inapplicable in this case because the insurer denied coverage entirely.  The trial court erred, however, by awarding damages for indemnity and prejudgment interest because the insured had not entered into a contract for subsurface repairs, and  the policy contained a provision that ‘track[ed]” Section 627.707(5)(b), Florida Statutes, “author[izing] [the insurer] to withhold payment for subsurface repairs until [the insured] entered into a contract for those repairs.”  Furthermore, under Section 627.70131(5)(a), Florida Statutes, prejudgment interest was not payable because the duty to indemnify had not been triggered.  Under this statute, “factors beyond the control of the insurer [existed] which reasonably prevented . . . payment.”