Three important points were made by Florida's First District Court of Appeal in this Hurricane Ivan Coverage Case: Citizens Property Insurance Corp. v. Ashe, Download Citizens Property Insurance Corp. v. Ashe (Fla. 1st DCA Case No. 1D09.1546, Opinion Filed November 17, 2010) PUBLIC ACCESS, STATED NOT FINAL, also published as 2010 WL 4628915 (Fla. 1st DCA November 17, 2010)(authorized password required to access Westlaw). Although this case involves many interesting issues, including the application or not of Florida's Valued Policy Law, the three important points summarized here do not address them all.
First, the reason for the Appellate Court's decision was the same as the reason for the Trial Court's main ruling challenged on appeal, which the Appellate Court reversed: the "other insurance" clause in a Wind Policy when the Policyholder or other Insured also has a Flood Policy. "It is not applicable when the insured has a wind policy and a flood policy, each covering a different peril." Citizens Property Insurance Corp. v. Ashe, 2010 WL 4628915 at * 4.
Second, the Florida Appellate Court went beyond its self-described "dispositive" reason for decision in order "to assist the trial court and the parties on remand." Id. at *5. The Court adroitly side-stepped "the total loss recovery rule" applied in some other jurisdictions. (Individual holdings or a handful of rulings is and are sometimes described, by lawyers, judges, or litigants, as a "rule". This appears to be one of those occasions.) This "total loss recovery rule" is "applied in other jurisdictions." Id. at *3. "The total loss recovery rule limits the insured to recover the lesser of either the pre-storm value of the insured property or the total policy limit for perils that led to the property's destruction." Id. at *5. [Emphasis added.] Instead of explicitly adopting or rejecting such a rule in Florida, the First District panel announced a potentially much farther-reaching decision.
In the Ashe case, Mr. Ashe's house was damaged during Hurricane Ivan. Mr. Ashe requested and received Flood Insurance proceeds. (Mr. Ashe was not asked by the Flood Insurer, however, to submit a Proof of Loss, and he did not submit a Proof of Loss to the Flood Insurer.) The First District panel ruled that the amount was irrelevant, but the fact of requesting and receiving Flood Insurance proceeds was relevant to Mr. Ashe's Insurance Coverage Claim upon the Citizens Property Insurance Policy at issue in this case:
Evidence that such flood insurance benefits were received was relevant to the issue of whether flood or wind caused the total loss of the home, and the trial court abused its discretion in excluding such evidence. Where Ashe now claims that his house was totally destroyed by wind, the jury can and should be allowed to hear evidence that he sought and accepted payment from his flood insurer, which by contract only provided compensation in the event of losses from a flood peril.
Id. at *7. [Emphasis by the First District Court of Appeal.]
Third and finally, the Appellate Court announced a second ruling on Evidence Law that will have effects on many other Insurance Claims in suit. In this case, the First District panel also addressed Mr. Ashe's argument that evidence he requested Flood Insurance benefits, was inadmissible as evidence of compromise or settlement, prohibited by Section 90.408 of Florida's Evidence Code. The Court rejected this argument.
For one thing, even if the statute applied on its face to this case, the statute did not apply to exclude evidence of "settlement discussions between ... Ashe and his flood insurer," only to exclude "evidence of settlement discussions between Ashe and Citizens," the Appellate Court ruled. "Furthermore," the Court noted, "Ashe presented no evidence that his receipt of flood insurance proceeds was the result of a compromise or settlement negotiation, rather than simply a payment of insurance benefits. For this court to accept his argument here, every payment of insurance benefits would constitute a settlement rather than simply fulfilling a contractual duty." Id. at *9. [Emphasis added.]
Insurance Questions including how to handle Catastrophe Claims Investigation and Evaluation, have in general terms been addressed by many Courts, many Insurance Companies, and lots of Insureds, in many decided Cases. Dennis Wall is Co-Author of the leading book on Insurance Coverage for Catastrophe Claims, "CATClaims: Insurance Coverage for Natural and Man-Made Disasters" (West Publishing Company 2008; 2010 Supplement in process). An experienced Expert Witness in Insurance Cases himself, Mr. Wall will speak on a panel at the American Conference Institute's Bad Faith Litigation Conference in Orlando, Florida on November 30, 2010 on "Dealing With Catastrophic Disasters: How to Properly Investigate and Handle Overwhelming Claims". The author has been advised by the American Conference Institute that the ACI is continuing to offer its discount to readers of this Blog: Download ACI Advises Readers of the Insurance Claims and Issues and Insurance Claims and Bad Faith Law Blog are entitled to a discount.
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