It’s an ill wind …
In September 2017, a dwelling owned by Debra and Michael Kennedy was damaged when Hurricane Irma struck Florida. Starting in October 2017, the Kennedys placed their insurer, First Protective Insurance Company d/b/a Frontline Insurance, on notice that their windows would need to be completely replaced.
Frontline responded by suggesting that the Kennedys source the replacement glass themselves and have the windows repaired. In response, the Kennedys explained that their window model was no longer manufactured so a complete replacement was required. This dispute over replacing the glass versus replacing the windows continued for some time.
In November 2017, the Kennedys requested that Frontline provide them copies of photos taken in connection with Frontline’s adjuster’s report. The adjuster provided the report but refused to provide the photos, stating that they were considered to be a work product and so could not be released.
In December 2017, the Kennedys threatened to file a complaint with the Florida Department of Financial Services. In January 2018, Frontline provided the Kennedys a sample estimate that left most of their questions and concerns unanswered.
Several months later Frontline issued, and the Kennedys received, a written demand for appraisal pursuant to the policy. Frontline’s demand, however, was delivered to the Kennedys before Frontline provided its written statutory notice to the Kennedys of their right to mediate under Florida law. That notice followed the months of disagreement between Frontline and the Kennedys regarding their claim.
The Kennedys filed suit against Frontline on July 26, 2018, and Frontline moved to compel appraisal. The court granted the motion and denied the Kennedys’ motion for reconsideration, and the Kennedys appealed.
On appeal, the court observed that the record was replete with communications between the Kennedys and Frontline that made clear that a dispute arose well before Frontline notified the Kennedys of their right to mediate. Further, the court stated that Frontline’s invocation of the work product privilege was significant because it implied that Frontline anticipated litigation as early as November 2017. Notwithstanding this, Frontline chose to wait until June 2018—after making its demand for appraisal—to notify the Kennedys of their statutory right to participate in mediation. Frontline’s actions, the court said, were in derogation of the statute’s purpose to expeditiously bring the parties together for a mediation without the trappings of an adversarial process.
The court held that, once a dispute has arisen, an insurer may not demand appraisal under the policy before providing the insured notice of the right to mediate. The trial court’s order compelling appraisal was reversed and the case remanded for further proceedings.
Kennedy v. First Protective Insurance Company-District Court of Appeals of Florida, Third District-March 6, 2019-No. 3D18-1993.
