Opinion
No. 2D21-2545.
11-30-2022
Meribeth GRATKOWSKI, Appellant, v. ASI PREFERRED INSURANCE CORP., Appellee.
Sean Saval of Kovar Law Group, St. Petersburg, for Appellant. Patrick E. Betar of Berk, Merchant & Sims, PLC, Coral Gables, for Appellee.
STARGEL, Judge.
Meribeth Gratkowski challenges the trial court's order granting final summary judgment in favor of ASI Preferred Insurance Corp. and denying Gratkowski's cross-motion for summary judgment in this action for declaratory relief regarding the denial of Gratkowski's claim for roof damage allegedly sustained during Hurricane Irma. Because we conclude the right to appraisal did not exist in this case, the appraisal award was not valid, and the trial court's order must be reversed.
BACKGROUND
After ASI determined that the damage to Gratkowski's roof was not the result of a windstorm or other covered peril, Gratkowski's assignee, CMR Construction & Roofing, LLC (CMR), invoked the appraisal clause in the homeowners insurance policy. ASI agreed to participate, and the appraisal panel ultimately awarded $0 for the loss. CMR then released Gratkowski from the assignment of benefits, and Gratkowski filed suit against ASI seeking to declare the appraisal invalid.
ASI moved for summary judgment arguing that: (1) appraisal was proper and binding pursuant to the policy terms because ASI did not wholly deny coverage; (2) Gratkowski waived any objection to appraisal by invoking and participating in the appraisal without first asserting an objection; (3) Gratkowski is estopped from setting aside the appraisal award after appraisal concluded, and pursuant to the election of remedies doctrine; and (4) Gratkowski is barred by the doctrine of laches because she unreasonably delayed asserting her objection to appraisal until the $0 award was rendered. Gratkowski filed a cross-motion for summary judgment and the trial court entered an order granting summary judgment in favor of ASI, denying Gratkowski's cross-motion, and finding the appraisal award was valid and that Gratkowski was not entitled to declaratory relief. Gratkowski now argues that the trial court erred because the issue of causation was not a question for the appraisal panel, rather it was exclusively a judicial question—and since ASI wholly denied coverage for the claim, the appraisal proceedings were invalid.
ANALYSIS
Where the parties agree there are no material facts in dispute, the trial court's entry of summary judgment poses a pure question of law that is reviewed de novo. Gibson v. Wells Fargo Bank, N.A., 255 So.3d 944, 946 (Fla. 2d DCA 2018); Shaw v. Tampa Elec. Co., 949 So.2d 1066, 1069 (Fla. 2d DCA 2007) ("The general `standard of review governing a trial court's ruling on a motion for summary judgment posing a pure question of law is de novo.'" (quoting Major League Baseball v. Morsani, 790 So.2d 1071, 1074 (Fla. 2001))).
Generally, "when the insurer admits that there is a covered loss, but there is a disagreement on the amount of loss, it is for the appraisers to arrive at the amount to be paid." Johnson v. Nationwide Mut. Ins. Co., 828 So.2d 1021, 1025 (Fla. 2002) (emphasis omitted) (quoting Gonzalez v. State Farm Fire & Cas. Co., 805 So.2d 814, 816 (Fla. 3d DCA 2000)). "Whether the claim is covered by the policy is a judicial question, not a question for the appraisers." Gonzalez, 805 So. 2d at 817. Although ASI claims it did not wholly deny coverage (because it agreed windstorm damage resulting from a hurricane would be a covered loss, but that Gratkowski's roof simply did not have any windstorm damage) and therefore the claim was ripe for appraisal, this argument fails. Cf. Johnson, 828 So. 2d at 1025-26 ("[T]he determination as to whether the loss was covered by a sinkhole or earth movement is an issue of coverage for the whole loss and is an issue for judicial determination by a court."). The pertinent language regarding appraisal in the policy reads as follows:
Mediation or Appraisal. If you or we:
Fail to agree on the amount of the loss, either party may demand an appraisal of the loss. In this event, each party will choose a competent appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire.... The appraiser will separately set the amount of the loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of the loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of the loss.
Accordingly, appraisal could not be invoked unless the parties failed to agree on the amount of loss. ASI determined the entire loss was not covered, so there was no amount of loss to be determined by the appraisal panel.
Nevertheless, and notably without an objection by ASI, the appraisal process commenced and an award of $0 was rendered. Gratkowski then filed the underlying declaratory action, and the trial court found the appraisal award was valid and that Gratkowski was not entitled to declaratory relief. We conclude that whether this loss was caused by a covered peril is an issue for judicial determination by the court and not for an appraisal panel, and thus the appraisal award is not valid.
As raised in its motion for summary judgment, ASI alternatively argues the appraisal award was valid because Gratkowski waived any objection to appraisal by invoking and participating in the appraisal process. Florida law defines waiver "as the voluntary and intentional relinquishment of a known right or conduct which implies the voluntary and intentional relinquishment of a known right." Raymond James Fin. Servs. v. Saldukas, 896 So.2d 707, 711 (Fla. 2005) (discussing waiver in the context of arbitration (citing Morsani, 790 So. 2d at 1077 n.12)). "In order for a waiver to occur there must be: (1) a right, privilege, or benefit that existed at the time of the waiver and which may be waived; (2) the actual or constructive knowledge of that right, privilege, or benefit; and (3) an intention to relinquish that right, privilege, or benefit." Naples Ests. Ltd. P'ship v. Muston, 327 So.3d 419, 422 (Fla. 2d DCA 2021) (citing Arbogast v. Bryan, 393 So.2d 606, 608 (Fla. 4th DCA 1981)). The right to appraisal did not exist in the underlying case because "courts are exclusively charged with determining issues of coverage." Freeman v. Am. Integrity Ins. Co. of Fla., 180 So.3d 1203, 1208 (Fla. 1st DCA 2015). In arguing that Gratkowski waived her right to object to the appraisal panel's determination, ASI essentially contends that Gratkowski, by invoking appraisal and not objecting until the process concluded, waived her right to file a breach of contract claim. However, the submission of a claim to appraisal does not foreclose a challenge to the scope of coverage. See Am. Coastal Ins. Co. v. Residences at Pelican Isle Condo. Ass'n, 291 So.3d 1003, 1003 (Fla. 2d DCA 2020) (citing Liberty Am. Ins. v. Kennedy, 890 So.2d 539, 541-42 (Fla. 2d DCA 2005)). Accordingly, it is inconsequential that Gratkowski did not object to appraisal until after it concluded because the appraisal panel did not have the authority to determine coverage, only the amount of loss. See State v. Yaros, 728 So.2d 1201, 1202 (Fla. 2d DCA 1999) ("[J]urisdiction of the subject matter cannot be conferred by consent or failure to object...." (quoting Winn & Lovett Grocery Co. v. Luke, 156 Fla. 638, 24 So.2d 310, 312 (1946))).
Next, ASI argues that Gratkowski is equitably estopped from setting aside the appraisal award. "The elements of estoppel are (1) a representation as to a material fact that is contrary to a later-asserted position; (2) reliance on that representation; and (3) a change in position detrimental to the party claiming estoppel, caused by the representation and reliance thereon." Appalachian, Inc. v. Olson, 468 So.2d 266, 269 (Fla. 2d DCA 1985). ASI argues that Gratkowski invoked the appraisal clause, actively participated in the process without objection, and only changed course after the appraisal proceedings concluded. ASI further claims that it detrimentally relied on Gratkowski's actions by incurring the time and expense of the appraisal, and therefore Gratkowski is equitably estopped from supplanting the appraisal with a lawsuit for breach of contract.
Because the question of coverage is exclusively a judicial function, the appraisal panel did not have the authority to determine whether the loss was a covered peril. Accordingly, the resulting appraisal award is therefore invalid as an improper delegation of an exclusive judicial function. See Evans v. State, 647 So.2d 180, 180 (Fla. 1st DCA 1994) ("The parties cannot, even by stipulation, confer jurisdiction upon a court where no jurisdiction exists."); RHPC, Inc. v. Dep't of Health & Rehab. Servs., 509 So.2d 1267, 1269 (Fla. 1st DCA 1987) (noting that "estoppel does not operate to confer authority or power" where none exists (citing 22 Fla. Jur. 2d Estoppel and Waiver § 7 (1980))); cf. FCCI Mut. Ins. Co. v. Cayce's Excavation, Inc., 675 So.2d 1028, 1029 (Fla. 1st DCA 1996) ("It is well settled that subject matter jurisdiction cannot be conferred by estoppel.")
In addition to the prior estoppel argument, ASI argues that Gratkowski is estopped from setting aside the appraisal award based on the election of remedies. "When a party elects between two or more inconsistent courses and has knowledge of all the pertinent facts, he binds himself to the course he adopts first and cannot later withdraw from this knowing election." Barbe v. Villeneuve, 505 So.2d 1331, 1334 (Fla. 1987). "Under Florida law ... the election of remedies doctrine applies only where the remedies in question are coexistent and inconsistent." Id. at 1332. "[F]or one remedy to bar another remedy on grounds of inconsistency they must proceed from opposite and irreconcilable claims of right and must be so inconsistent that a party could not logically follow one without renouncing the other." Id. at 1333. However, the remedies here are not coexistent and inconsistent where coverage is wholly denied.
The division of responsibility between the appraisers and court is therefore clear. The appraisers determine the amount of the loss, which includes calculating the cost of repair or replacement of property damaged, and ascertaining how much of the damage was caused by a covered peril ... [and] [t]he court decides whether the policy provides coverage for the peril which inflicted the damage, and for the particular property at issue; in other words, all coverage matters.
People's Tr. Ins. Co. v. Garcia, 263 So.3d 231, 234 (Fla. 3d DCA 2019) (alterations in original) (quoting Citizens Property Ins. Corp. v. River Manor Condo. Ass'n, 125 So.3d 846, 854 (Fla. 4th DCA 2013)). As such, appraisal was not a coexistent remedy since coverage was wholly denied by ASI; therefore, the election of remedies doctrine is inapplicable.
As its final argument, ASI contends that Gratkowski's objection to the appraisal award was unreasonably delayed, and therefore barred under the doctrine of laches. Laches is based upon an unreasonable delay in asserting a known right which causes undue prejudice to the party against whom the claim is asserted. See Van Meter v. Kelsey, 91 So.2d 327, 330-31 (Fla. 1956); Bethea v. Langford, 45 So.2d 496, 498 (Fla. 1949). "Where strong equities appear, of course, laches may be applied before the statute of limitations has expired. However, laches is an affirmative defense, and the burden of proof is on the party asserting it; it must, moreover, be proved by very clear and positive evidence." Smith v. Branch, 391 So.2d 797, 798 (Fla. 2d DCA 1980); see Appalachian, Inc., 468 So. 2d at 269 ("Laches may be applied before the statute of limitations expires only where strong equities appear."). Pursuant to section 95.11(2)(e), Florida Statutes (2017), the statute of limitations for an action for breach of a property insurance contract is five years from the date of loss. In the underlying case, the date of loss was September 10, 2017, therefore the statute of limitations did not expire until September 10, 2022. Strong equities do not appear in this case to compel the application of laches to bar Gratkowski's objection to the appraisal award.
Because ASI wholly denied coverage for the claim, the right to appraisal to determine the amount of loss did not exist. As such, the appraisal award was not valid and the trial court's order granting ASI's renewed motion for summary judgment and denying Gratkowski's renewed cross-motion for summary judgment must be reversed.
Reversed and remanded for further proceedings consistent with this opinion.
KHOUZAM and ROTHSTEIN-YOUAKIM, JJ., Concur.