Expert Opinions in Insurance Coverage Disputes

Insurance coverage disputes may result in expert witnesses.  An expert is used to help determine the cause of the loss or the damages covered under the policy.  But, just because you, an insured, have an expert opinion that says “X” does not mean the insurer will not have an expert opinion that says “Y.”  Competing expert opinions are part of the process and experts do not always agree on the cause of the loss or the quantum of covered damages.   An example of competing expert opinions in a property insurance dispute is discussed here.  When it comes to experts, in general, the credibility of an expert is always an issue. This is true when there are competing expert opinions — which expert is the most believable.  

Consider the expert you hire for credibility purposes, the opinion the expert provides for credibility purposes, and the merit of any opinion from a competing expert.  Expert witnesses are an important part of disputes dealing with complicated issues and oftentimes cases hinge on the expert opinion and credibility of that opinion.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

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Insurer’s Payment AFTER Expiration of 60-Day Cure Period from Civil Remedy Notice can Trigger Bad Faith

In order to assert a first-party bad faith claim against your insurer, you must  file a Civil Remedy Notice identifying the statutory violations.  This gives the insurer 60 days to cure the violations.  

What happens if the insurer cures the violations after the 60 days?  For example, what if the insurer pays the claim after the expiration of the 60 days?  

A recent case involving a first-party property insurance policy held that this fact can trigger a bad faith claim because the payment of the claim AFTER the 60 days supports the determination of coverage and damages under the policy.  This ruling makes it all the more important for an insurer to treat the 60 day cure period with seriousness.  Because if it cures the violations after the cure period and pays the claim without obtaining a release from the insured, even if this occurs pre-suit, the insurer can be exposed to a statutory bad faith lawsuit.  

Read this article for more information on this case and issue. 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Injured Parties Must Comply with Florida’s Nonjoinder Statute

When it comes to filing a claim against another’s liability insurer, injured parties sometimes try to improperly put the proverbial cart before the horse.  

You CANNOT sue another’s liability insurer (a policy you are not insured under) until you get a verdict / judgment or enter into a settlement against the insured.  This is statutory and embodied in what is commonly known as Florida’s nonjoinder statute.  This applies to third-party claims which are claims where you, an injured party, are suing another perhaps for purposes of their liability insurance coverage but you are not an insured under the policy. 

For instance, in an automobile negligence action, an injured party moved to amend his complaint to assert a claim against the defendant tortfeasor’s automobile liability insurer.  The injured party wanted to assert a third-party bad faith claim against the insurer. Although the trial court surprisingly allowed this to occur, the appellate court granted a petition for writ of certiorari and quashed the trial court’s order:

By its terms, the nonjoinder statute, and its mandatory condition precedent, is inapplicable to first-party bad-faith claims; it is instead limited to cases, such as this, which involve a third party (such as Martinez [the plaintiff], who is not an insured under the policy) seeking to join an insurer in the underlying action before Martinez “first obtain[s] a settlement or verdict against a person [such as Guevara] who is an insured under the terms of the policy. . . .” … Unlike first-party claims, premature and unaccrued third-party claims must be evaluated in light of the legislative mandate established by the plain language of the nonjoinder statute. That legislative mandate precludes Martinez from maintaining any cause of action against GEICO — indeed, precludes even the accrual of such a cause of action — until Martinez satisfies the compulsory condition precedent of obtaining a settlement or verdict against Guevara. 

Geico General Ins. Co. v. Martinez, 43 Fla.L.Weekly D86a (Fla.3d DCA 2018).

Stated simply, the injured party could NOT sue the tortfeasor’s (party that caused the automobile accident) liability insurer without first obtaining a verdict / judgment or entering into a settlement with the tortfeasor.  The injured party was not an insured under the tortfeasor’s liability policy and, thus, had to comply with Florida’s nonjoinder statute.

As an injured party, you always, and I mean always, want to consider applicable, available liability insurance.  In doing so, however, this does not mean you get to put the proverbial cart before the horse and sue the tortfeasor’s liability insurance carrier right off the bat.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.i

 

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Repeated Seepage of Water Over Period of 14 Days or More

There is an exclusion in property insurance policies dealing with the repeated seepage or leakage of water over a period of 14 days or more.   For example, if a pipe bursts and there is a repeated seepage of water for 14 days or more this exclusion comes into play.  

Certainly, this can be an issue if the pipe bursts when you are out of town and do not discover the issue until you return.  

A recent case holds that while this exclusion may apply, it does not apply to bar coverage to the extent of loss during the first 13 days of water seepage.  In other words, covered damages would be limited to damages that occurs during the first 13 days after the pipe bursts as determined by the trier of fact.  This is huge from an insured’s standpoint.  Huge.

If you have a question or issue regarding maximizing insurance coverage under a property insurance policy, consult a lawyer. A lawyer can help couch the claim in light of exclusions in the policy. 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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An Insured should be Cautious when Receiving an Insurer’s Proposal for Settlement

As an insured, when you are suing an insurance carrier you are moving for attorney’s fees to the extent you prevail in the coverage lawsuit.  For an insurer to counteract your right to fees, the insurer may serve a proposal for settlement, which is a procedural vehicle for an insurer to preserve its right to obtain fees from the insured in the event the proposal for settlement is not accepted.  Be cautious when it comes to an insurer’s proposal for settlement because if the insurer prevails you could be liable for the insurer’s attorney’s fees.  Do not automatically assume the insurer’s proposal for settlement is without good faith.

In a property insurance coverage case, Mount Vernon Fire Ins. Co. v. New Moon Management, Inc., 43 Fla. L. Weekly D395a (Fla. 3d DCA 2018), the insured filed a coverage suit for water damage.  The insurer had denied the insurer’s claim due to coverage exclusions in the policy. After two years of litigation and discovery, the insurer served a proposal for settlement for $1,000.  The insured, of course, did not accept this nominal amount.  The insurer also moved for summary judgment and guess what? The insurer prevailed meaning it now had a basis to recover attorney’s fees based on the insured not accepting the proposal for settlement. The insured argued that the insurer did not make the proposal for settlement in good faith and the trial court agreed based on the $1,000 nominal amount.  

But, on appeal, the Third District reversed finding that after two years of litigation and discovery and moving for summary judgment shortly after serving the proposal for settlement, the insurer had an understanding of its risk exposure.  And, based on this risk exposure, the insurer found its risk limited hence the $1,000 proposal for settlement.  Stated differently, the Third District held that the insurer had a reasonable basis at the time it made its $1,000 offer to conclude that its liability was limited.  Based on this  reasonable basis, the Third District found that the insurer was entitled to its reasonable attorney’s fees against the insured. 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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If You are a Contractor that Subcontracts Work, You WANT the Subcontractor Exception to the “Your Work” Exclusion

As a contractor you need to appreciate the “your work” exclusion in your CGL policy.  It is an exclusion that will absolutely come into play if there is a latent construction defect claim asserted against you.  You also need to appreciate the subcontractor exception to the “your work” exclusion in your CGL policy.  This is a must-have exception, particularly if you subcontract out portions of your scope of work.  This exception carves out from this exclusion “your work” performed by subcontractors.  

Without this exception, all of your work is excluded as the contractor in this post-completion water intrusion case found out when the court held its CGL insurer had NO duty to defend or indemnify it from the owner’s construction defect claims.  This is a double ouch!!! Not having insurance coverage to defend you in an expensive construction defect case is one thing.  It is another knowing that your insurer has no obligation to pay for any property damage because there is no coverage.  Do the smart thing — consult your insurance broker regarding the “your work” exclusion and the subcontractor exception to this exclusion.  If your policy does not contain the subcontractor exception, consider the harsh implications of what your policy will and will not cover in a latent construction defect case. 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Presentation on BAD FAITH when Dealing with Property Insurance Claims

Recently, I participated in a webinar relating to bad faith insurance claims when dealing with a first-party property insurance carrier.  A portion of the powerpoint presentation I put on can be seen here.  Please visit the link and review the presentation–you may find it helpful from a caselaw standpoint.

If you are dealing with a property insurance claim, do yourself a favor and hire counsel to make sure your rights moving forward are best preserved.  If you believe your insurer is unreasonably denying your claim or short-changing the amount you believe should be covered, consult counsel today, not tomorrow!

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Insured should Consider Proposal for Settlement / Offer of Judgment from Insurer

When an insured sues its insurer, the insured seeks its attorney’s fees pursuant to Florida Statute s. 627.428(1).  The statute provides for one-way attorney’s fees in favor of an insured if it obtains a judgment in its favor against its insurer.   If the insurer prevails, on the other hand, the insurer is not entitled to its attorney’s fees pursuant to this statute. As a result, an insurer will typically serve an offer of judgment / proposal for settlement to create an argument to recover its attorney’s fees if it prevails.

In the case of Tower Hill Signature Insurance Company v. Javellana, 42 Fla. L. Weekly D2597a (Fla. 3d DCA 2017), this is exactly what happened. The insured, in a property insurance dispute, sued its property insurer claiming the insurer breached the terms of the insurance contract by failing to pay the actual cash value of covered damage. (Actual cash value is a method used to value an insured’s property by deducting the depreciation value from the replacement cost.) The insured, as is often the case, also included claims for declaratory relief asking the court to render certain declarations relating to the policy. The thrust of the lawsuit, however, was the insured’s claim for monetary damages under its breach of contract claim. During the litigation, the insurer served a proposal for settlement / offer of judgment on the insured to create an argument to recover attorney’s fees. The insured did not accept the proposal.

The jury disagreed with the insured and rendered a verdict in favor of the insurer. The insurer then moved for its attorney’s fees pursuant to the proposal for settlement / offer of judgment it served on the insured. The trial court denied this motion. On appeal, the Third District reversed the trial court on this issue ruling that the insurer was entitled to attorney’s fees pursuant to its proposal. Because the primary relief sought by the insured was monetary damages per its breach of contract count, the insurer’s proposal for settlement / offer of judgment was valid and the insurer’s motion for attorney’s fees should have been granted.

As an insured, consider the risks associated with an insurer’s proposal for settlement.  The risk is simple:  you can potentially be liable for your insurer’s attorney’s fees based on a decision not to accept a proposal for settlement / offer of judgment.  Make sure to consult with your counsel regarding this risk.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Insurer’s Denial of Coverage Means it Cannot Require You to Comply with Post-Loss Policy Conditions

When it comes to first-party property insurance policies, you want to make sure you comply with post-loss policy conditions in your insurance policy.  This includes agreeing to sit for an examination under oath, providing a sworn statement in proof of loss, or other post-lost conditions the policy requires. Non-compliance with post lost conditions can result in the preclusion of coverage.  On the other hand, if your insurer denies coverage, then the insurer does not get to require you to comply with post-loss policy conditions. The insurer waives the right to require you to comply with post-loss policy conditions if it denies coverage, i.e., takes the position there is no coverage under the policy.  Click here for more information.  Consult an attorney to ensure your rights are protected when it comes to insurance claims.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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An Insured’s Noncompliance with Conditions Precedent Must be Pled Specifically

In an earlier posting I discussed the application of exclusionary language in an automobile liability insurance policy that contained an “other insurance” clause.  In yet another example dealing with an automobile liability insurance policy dealing with uninsured motorist coverage, the policy contained language that stated that if the insured was in a vehicle he/she does not own that is covered under another policy, this policy is excess but only after all other insurance is exhausted.  

In this case, the insured was in a vehicle she did not own and there was coverage under another policy.  The insurer argued that the other insurance policy was primary and because it was not exhausted, there was no uninsured motorist coverage under this policy.  The “other insurance” provision was not satisfied; thus, the insured failed to satisfy conditions precedent.  

However, the appellate court held that the insurer WAIVED the right to argue and rely on this provision because it failed to specifically assert as an affirmative defense that the insured failed to satisfy conditions precedent under the policy.  The defense of noncompliance with a conditions precedent — this this case, the insured’s failure to exhaust the other insurance–must be pled specifically as an affirmative defense.  The insurer’s failure to properly plead this affirmative defense resulted in a waiver of the defense!  See Schoeck v. Allstate Ins. Co., 42 Fla.L.Weekly D2182a (Fla. 2d DCA 2017).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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