Florida Appeals Court Reverses Appraisal Ordered In Storm Suit

Tiffany Bustamante O’Quinn and Alycen A. Moss | Property Insurance Law Observer

On July 20, 2022, Florida’s Third District Court of Appeal reversed and remanded a trial court’s decision compelling the parties to proceed with appraisal and staying litigation until that appraisal was completed. Florida’s appellate court held that trial court erred in granting the motion to compel appraisal without first conducting an evidentiary hearing to determine compliance with post loss obligations.

Thiscase began when policyholders, Nolan and Maria Santee, notified theirhomeowner policy insurer, that their home sustained interior and roof damage during a storm on June 14, 2019. Auto Club’s inspection of the property three days later revealed that the home had sustained interior water damage, and that, although the flashing on the roof was also damaged, this was the result of wear and tear rather than any one-time event such as a storm. As a result, Auto Club issued a partial denial letter acknowledging coverage for damages to the interior, but denying coverage for damage to the roof as a result of excluded causes, and enclosing a check in payment for repair of the covered interior damages.

Shortly thereafter, Auto Club received an email from the Santees’ public adjuster advising that he represented the Santees in connection with the claim and demanding that Auto Club contact him “directly for any inquiries regarding this claim,” including “any information you need from the [Santees].”  Auto Club acknowledged the public adjuster and advised that it would retain an independent engineering firm for re-inspection with respect to the alleged roof damages.   

Soon after, Auto Club received notification that the independent engineering firm likewise did not observe any storm-related damage to the home. Auto Club immediately sent a copy of the engineering report to the Santees’ public adjuster via email and contemporaneously advised the public adjuster that although the roof damage was not caused by a storm additional monies may still be owed for the interior damages. To that end, Auto Club requested that the public adjuster provide a scope of loss estimate for repairs of interior damage. No response was received.

Approximately a month-and-a-half after Auto Club’s initial request for a scope and loss estimate, Auto Club again contacted the public adjuster to inquire as to the estimate. The  public adjuster responded that an estimate was being finalized and would be forwarded upon completion.

After four months without indication as to whether the Santees sought reimbursement on the claim beyond the amount already paid, an Auto Club representative called the Santees’ public adjuster to advise that Auto Club would be closing the claim, and that the claim would be immediately reopened should the Santees claim entitlement to additional reimbursement. The claim was closed accordingly.

Approximately a year and a half after the loss was initially reported, Auto Club received a letter from Perry & Neblett, P.A., advising that the Santees had retained counsel and demanded “full payment for the loss and/or appraisal.” The letter did not specify any amount to be paid, nor did it enclose or make reference to the scope of loss estimate Auto Club had requested twice prior.

Simultaneous with providing its letter of representation, Perry & Neblett, P.A. also filed a civil remedy notice, claiming that the Santees had made a timely pre-suit submission to Auto Club of a $52,582.52 estimate as well as a sworn proof of loss. Within less than a month, the Santees filed suit against Auto Club alleging breach of contract, bad faith, and fraudulent inducement, petitioning for appraisal, and seeking declaratory relief and mediation.

The Santees asserted that Auto Club refused to comply with the appraisal process in its policy, and moved to compel appraisal. Auto Club objected and served a motion for sanctions, pursuant to Florida Statutes, section 57.105, disputing the pre-suit submission of a scope of loss estimate or sworn proof of loss. The trial court granted appraisal, and Auto Club appealed.

The author of this blog post represented Auto Club and drafted the appellate brief. In the brief, Auto Club argued that, contrary to the Santees’ assertions in their civil remedy notice and complaint, the Santees never provided Auto Club with a scope of loss estimate for damages or a sworn proof of loss, and that the Santees’ failures to comply with their post-loss obligations precluded their right to appraisal. Auto Club’s brief suggested that the case instead pointed inexorably to a calculated bad-faith setup which could not be permitted to proceed.

Ultimately, the Third District Court of Appeal unanimously ruled that the trial court erred in granting the motion to compel appraisal without first conducting an evidentiary hearing to determine compliance with post loss obligations. The Court instructed that “[b]efore compelling appraisal, the trial court must determine that post loss obligations have been met and that an arbitrable issue exists regarding the amount of the loss,” and remanded for  further proceedings consistent with its opinion. The Court also granted Auto Club’s Motion for attorney’s fees and costs, conditioned upon finding that Auto Club complied with the requirements of section 57.105, Florida Statutes.

Santee is clearly a win for insurers. It provides a basis for insurers to oppose appraisal in circumstances where the parties did not engage in a meaningful exchange sufficient to establish disagreement as to the amount of loss. The decision again establishes that a genuine disagreement over amount of loss must materialize before an order of appraisal may occur. 

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.

2022 Construction Industry Legislative Update

Brett Henson | Shumaker, Loop & Kendrick

The 2022 [Florida] Legislative Session saw a number of bills signed into law, effective July 1, 2022, which impact the construction industry. Below is a summary of key changes.

  1. Building Regulation (Ch. 2022-136)

Chapter 2022-136 (“Building Regulation”) includes several changes intended to streamline the building permit process, by expanding the use of private provider plans services, shortening the time for building departments to review and respond to permit applications, and creating a private cause of action in favor of owners, builders, and associated groups to ensure that building departments use building permit fees as authorized by statute.

First, the bill expands the use of private provider services by:

i. Expanding eligibility for internship certification. Previously, only full-time employees of a local government who worked under the direct supervision of the building official were eligible to complete the four-year internship certification program required to become a private provider. Under the new law, aspiring private providers can complete their internship while employed full-time by a private provider. [1]

ii. Expanding the scope of services authorized by provisionally certified private providers. A provisionally certified private provider is one who meets the eligibility requirements to sit for, but has not yet taken, the private provider examination. Under the new law, these individuals are permitted to act as the “duly authorized representative” of a private provider for the purposes of plans review and inspections, so long as they are supervised by a licensed private provider. [2]

iii. Defining “reasonable administrative fee.” Previously, Chapter 553 did not define what constituted a “reasonable administrative fee” to be imposed by a building department for private provider services. Under the new law, this fee is now defined as the “cost actually incurred” to include the labor cost of the personnel providing the service for clerical and supervisory assistance only. [3]

iv. Equal access to records. The new law now requires that building departments provide “equal access” to permitting and inspection documents and reports. [4]

v. Issuance of a Certificates of Occupancy or Completion. For most commercial projects, building officials are now granted 10 business days (as opposed to 2 business days under the old law) to issue a certificate of occupancy or equivalent (“CO”) upon receipt of a complete application for CO and payment of all outstanding permit and inspection fees. However, if a building official fails to respond to a complete application for CO within 10 business days, the CO is deemed to be granted and must be provided within 10 additional days. [5]

Second, the bill shortens the time for building departments to review and respond to permit applications[6] Below is a list of deadlines for building departments to review and respond to building permit applications:

i. If, after receiving building permit application, the building department notes deficiencies and requests additional information (first request), and the applicant provides the requested information within 30 days, the local government must, within 15 days of receiving the information:

a. Determine if the application is properly completed;

b. Approve the application;

c. Approve the application with conditions;

d. Deny the application; or

e. Advise the applicant of information, if any, that is needed to deem the application properly completed or to determine the sufficiency of the application.

ii. If a building department notes deficiencies and requests additional information under (i)(e) (second request), and the applicant provides the requested information within 30 days, the local government must, within 10 days, take one of the actions set forth in (i)(a)-(e);

iii. A building department cannot request additional information after the second request without first offering the applicant an opportunity to meet to resolve the outstanding issues. If, after an opportunity to meet, the building department makes a third request for additional information, and the applicant timely responds (within 30 days), it must, within 10 days, take either one of the actions set forth in (i)(b)-(d) or, at the request of the applicant, process the application, if the applicant believes the request for further information is not legally authorized.

iv. If the building department fails to abide by the above deadlines, then it must reduce the permit fee by 10 percent for each business day of non-compliance.

Third, the new law creates a private cause of action in favor of owners, builders, and associated entitiesto ensure that building departments use building permit fees as authorized by statute. Under Florida law, a building department is only authorized to charge permit fees associated with “enforcing the Building Code.” Such fees cannot be used to fund other unrelated local government operations and can only be carried forward in amount not to exceed one year of the building department’s operating budget, unless the local government establishes a “Building Inspections Fund Advisory Board.” [7]

The new law gives standing to an owner, contractor, or associated group of owners or contractors in Florida with permits in the jurisdiction to sue the building department and local government to ensure permit fees are properly applied in accordance with the statute. [8]

  1. Building Safety (Ch. 2022-269)

In the wake of the Champlain Towers collapse in Surfside, FL, and following a special legislative session in May 2022, Gov. DeSantis signed into law Chapter 2022-269 (“Building Safety”). While this law addresses the operation and funding of condominium associations and their reserves, there are several aspects of the new law that impact the commercial construction industry.

i. Expansion of building components subject to evaluation during turnover study. For design professionals, contractors, subcontractors, and suppliers who perform services or work on new condominiums, Florida law requires that upon turnover of the developer-controlled association to the unit owners, the developer is required to deliver a turnover study prepared by a licensed architect or engineer, which addresses the required maintenance, condition, useful life, and maintenance costs of the condominium property. Often, turnover studies, to the extent defects or deficiencies are noted, can result in an association serving a notice of claim pursuant to Chapter 558, Florida Statutes. The new law adds “waterproofing” as a component, which must now be addressed in the developer’s turnover study, and further, brings “loadbearing walls and primary structural members and primary structural systems” into the definition of the “structure” to be inspected. [9]

ii. Milestone Inspections. Associations that are three stories in height or greater are now obligated to retain an architect or engineer to perform periodic Milestone Inspection Reports as follows:

 · December 31st of the building’s 30th anniversary from CO; except

· For buildings within three miles of the coastline, on the 25-year anniversary from CO, and then every 10 years that follow; or

· If a CO was issued before July 1, 1992, then the milestone inspection must be completed by December 31, 2024.

Milestone Inspections begin with a “Phase I” visual inspection and, if deemed necessary by the architect or engineer, proceed to a “Phase II” if “substantial structural deterioration” is identified during Phase I. Phase II may or may not include destructive investigation. The Milestone Inspection Report is required to document the findings from the investigation and identify recommended repairs, which may be structural or remedial in nature. [10]

3) Other Changes

The 2022 legislative session saw the following additional changes:

i. Roof replacement. Fla. Stat. §553.844(5) now provides that for any roof which was repaired, built, or replaced in accordance with the 2007 Florida Building Code, if 25 percent or more of the roof needs to be replaced, then only those portions being replaced are required to comply with the version of the Florida Building Code then in existence. This new law provides that this statute must be adopted by the Florida Building Commission and incorporated into the Florida Building Code, and further, prevents a local government from passing an ordinance which seeks to circumvent the law.

ii. Notices of Commencement for HVAC Projects. Fla. Stat. §713.135 has been amended to increase the threshold for direct contracts for the repair or replacement of an HVAC system from $7,500 to $15,000, which are exempt from the requirement for Notice of Commencement as a condition of applying for a building permit.

iii. Demolition Permits for Waterfront Homes. Fla. Stat. §553.79(25) now provides that a local government may not place restrictions on a private property owner to obtain a demolition permit for a single family home located in a coastal highhazard area, moderate flood zone, or special flood hazard area.

1 Fla. Stat. §468.609(7)(a) (2022); Fla. Stat. §468.609(7)(c) (2022).

2 Fla. Stat. §553.791(1)(f) (2022).

3 Fla. Stat. §553.791(2)(b) (2022).

4 Fla. Stat. §553.791(2)(c) (2022).

5 Fla. Stat. §553.791(13)(a)-(b) (2022).  Note, this time change does not apply to applications for CO on single-family or two-family projects.

6 Fla. Stat. §553.79(b)-(c) (2022).  It is important to note that the time periods set forth in this statutory section do not apply to projects in which an owner has elected to use a private provider for alternative plans review and inspection under Fla. Stat. §553.791.  See Fla. Stat. §553.791(7)(a)-(d) (setting forth deadlines for permit review on private provider projects).

7 Fla. Stat. §553.80(7)(a)(1) (2022).

8 Fla. Stat. §553.80(7)(a)(2) (2022).

9 Fla. Stat. §718.301(4)(p)(2);(14) (2022).

10 See generally Fla. Stat. §553.899 (2022).

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.

Florida Court of Appeals Holds That County’s “Active Interference” Overrides “No Damages for Delay” Clause

Annie D. Rosenthal | Saul Ewing Arnstein & Lehr

Earlier this year, the Second District Court of Appeal of Florida held that a “no damages for delay” clause “will not be enforced in the face of governmental fraud, bad faith, or active interference with performance under the contract.” Sarasota County, Fla. v. Southern Underground Industries, Inc., 333 So. 3d 285 (Fla. 2d DCA 2022) (emphasis in original) (internal citations omitted).

Sarasota County (the “County”) contracted Southern Underground Industries, Inc. (“SUI”) to install a sanitary force main pipe and water transmission line. The County issued a stop work order because an owner of nearby property complained that the vibrations were causing damage to his home. Pursuant to the County’s contract, the County was permitted to suspend the work for a period not exceeding 90 days. On the 90th day, a structural engineer issued a report indicating that it was safe to proceed with construction. However, the County continued the suspension of the work for an additional 74 days.

As a result of the suspensions, SUI requested compensation due to the delay, which was denied by the County. SUI proceeded to file suit against the County for breach of contract. The trial court awarded SUI for the expenses incurred due to the County’s “wrongful continuation of the stop work order.”

On appeal, the County argued that SUI was not entitled to an award of damages because the contract contained a no damages for delay clause.

The Appellate Court affirmed the award of damages for SUI based on the County’s active interference. While the Appellate Court did not explicitly define “active interference,” the court found that the County actively interfered because it continued the stop work order “long after it was determined that is was safe to proceed with minimal damage to adjacent homes.”

This case provides notice to contractors and owners that a “no damages for delay” clause may not prohibit a contractor for recovering delay damages if the owner interferes with the contractor’s ability to timely perform its work. 

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.

Goodbye Courtroom? Florida Citizens Wants Claims Disputes Heard by Admin Judges

William Rabb | Insurance Journal

By this time next year, Citizens Property Insurance policyholders and assignees of benefits could see their claims disputes decided, not in county or circuit courts, but by administrative judges who work for a Florida state agency.

The Citizens Board of Governors on Wednesday voted to move ahead with a policy endorsement that would allow the insurer or the insured to send claims disputes to the state Division of Administrative Hearings, known as DOAH. Both parties would not need to agree to the DOAH venue.

The 30 judges at DOAH now handle a range of issues, including child support cases, mental health hearings, and disputes brought by businesses over state agency rules or over penalties assessed for violating regulations.


The Citizens’ plan would allow for faster resolution of claims disputes, which would benefit Citizens as well as policyholders, Citizens’ general counsel, Tim Cerio, told board members. Crucially, the endorsement also would cap plaintiffs’ attorney fees at about $200 an hour, with no fee multipliers, which ultimately could save the insurer thousands of dollars each year in legal costs.

Citizens will file for the endorsement soon, officials said. The Florida Office of Insurance Regulation will decide if it should be approved.

It’s all part of Citizen’s effort to reduce litigation expenses, which are spiraling as the carrier’s policies continue to soar – topping 1.2 million policies in force by year’s end, officials said. Citizens has about 19,000 claims lawsuits pending and is planning on spending as much as $100 million on legal defense costs this year.

Some Florida plaintiffs’ lawyers quickly questioned the wisdom of utilizing administrative judges to handle insurance claims disputes.

“I don’t see the upside on this for policyholders, unless they’re offered some type of exchange,” such as higher coverage limits or reduced premiums, said attorney Michael Redondo, of Miami, who said he has about 100 cases pending against Citizens.

Redondo (Linkedin)

Limiting attorney fees will reduce the number of lawyers who are willing to take on Citizens cases, which could hurt policyholders’ ability to obtain a fair judgment or settlement, he said.

He argued that Citizens could save much more by avoiding unnecessary litigation and accepting reasonable settlement offers more often. He noted that in one South Florida claim, he has repeatedly offered to settle for about $5,000. His fee would have been about $1,500. But Citizens would not settle and is going to trial next week on a relatively minor issue..

The litigation could ultimately cost Citizens more than $40,000 in defense fees and perhaps more in plaintiffs’ fees, he said.

Citizens spokesman Michael Peltier said that claimants’ lawyers often argue that the insurer should settle sooner or pay claims faster. But many claims in Florida have been proven to be fraudulent or exaggerated and have to be litigated.

“We have an obligation to policyholders to pay the ones that need to be paid but to investigate those that don’t,” he said.

Moving cases to the administrative arena would reduce the resolution time frame, from an average of about 430 days in the court system to 100 or so days at DOAH, partly because DOAH does not face a backlog of lawsuits, Cerio said.

The agency may have plenty of bandwidth: A state government website notes that in fiscal year 2019-20, the division saw some 6,300 requests, an 11% decrease from the previous year. And many DOAH requests are referred to mediation. Florida’s court system, on the other hand, has seen more than 4,500 lawsuits filed per month against the largest 16 insurance carriers, according to CaseGlide, a litigation management software firm.

But the perceived efficiency of the Division of Administrative Hearings could change quickly, Redondo countered.

“Trust me, if they dump 60,000 claims disputes into DOAH, DOAH’s resolution time will go up – way up,” the attorney said.

And DOAH decisions, in most cases, could still be appealed to an appeals court.


DOAH officials appear to be on board with the idea.

“The Division of Administrative Hearings will fairly and quickly resolve legal disputes for Citizens Property Insurance and its insureds—whatever form that dispute may take—as it does for countless other governmental entities in Florida,” reads an email from the acting head of DOAH, Judge Brian Newman.

Cerio told the Citizens board that DOAH officials said the agency could set aside some judges to hear only insurance claims and it has the statutory flexibility to hire more if the need arises. The Legislature at some point could also be asked to provide funding for more administrative judges and staff, Citizens’ Board Chairman Carlos Beruff said.

Because Citizens is a quasi-government entity that was created by the Florida Legislature, it likely has the legal standing to move claims cases to DOAH, said Stephen Rosen, a retired administrative law judge for DOAH who handled workers’ compensation disputes. Adjustments to state law and funding could easily be made by lawmakers, if needed, he said.

Other Florida insurers, as private companies not chartered by the state, would not have the DOAH-litigation option. Some carriers have taken other steps to avoid the court system. At least have begun offering binding arbitration in claims disputes in exchange for lower premiums.

DOAH is in something of a state of flux at the moment. Peter Antonacci was chief judge and administrator of the division for less than 18 months before Gov. Ron DeSantis last week named him to head the new Office of Election Crimes and Security. Newman was named acting chief of DOAH, but it’s not certain he will remain in the position.

The administrative law judges are all lawyers but some may have little experience in insurance matters. Rosen suggested that an expanded roster should include judges with expertise in claims disputes.

Legal costs have become one of the biggest issues, not just for Citizens but for most carriers in Florida’s distressed property insurance market, helping to drive several insurers into insolvency.


At the board meeting Wednesday, Citizens’ President Barry Gilway reviewed the dire state of the market, due in part to litigation expenses. He noted that in the first quarter of 2022, Florida’s 52 property insurance companies posted $154 million in losses. That followed a combined $1.2 billion negative net income for 2021 and negative $1.8 billion for 2020.

Gilway said those numbers should be looked at against the Florida private insurance market’s total surplus of about $4 billion, based on reports from Standard & Poor’s, a financial rating firm.

“The market is really losing 25% to 35% of its surplus every single year,” he told the board.

The losses have caused not only insolvencies, but have prompted a number of insurers to stop writing in Florida, to drastically reduce coverage areas, and to limit the age of roofs they’ll cover. It’s all led to “incomprehensible” growth rates for the insurer of last resort, Gilway noted. “The company is three times the size it was 28 months ago.”

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.

Slow As A Turtle? Florida Court Finds “No Damages for Delay” Clause Has Limits

Matthew DeVries | Best Practices Construction Law

My commute home last night took longer than usual. It was not excessive traffic, an accident, or a stalled car.  Rather, the cause of my delayed commute was a turtle: one single turtle crossing the road, holding up about 30 cars for what seemed like an eternity. (Never mind the fact that no one got out of their car to help the little guy!)

When we think of delays on a construction project, the first inquiry is to identify the turtle—the one party holding up progress or causing the delay. Many times, the parties’ contract will dictate whether the contractor can recover delay damages or will be limited to a time extension for delays beyond the contractor’s reasonable control.

In Sarasota County, Fla. v. Southern Underground Industries, Inc., 333 So. 3d 285 (Fla. 2d DCA 2022), the court recently held that a “no damages for delay” clause did not preclude an award of damages to the contractor following the County’s suspension of work.  In that case, the County issued a stop work order to the contractor installing a sanitary pipe and water line when an adjacent homeowner complained that vibration from the drilling caused damage to his home. The contractor secured an engineer’s report that concluded the damage was cosmetic only and that the vibration did not exceed the acceptable threshhold.  The adjacent homeowner rejected the contractor’s offer to fix the damages. Ultimately, the County continued the suspension of work for an additional two months while attempting to address the adjacent homeowner’s concerns.

The contractor sought additional compensation for the two extra months of suspension. The County rejected the claim, arguing that the “no damages for delay” clause in the parties’ contract precluded the award of delay damages. The court found in favor of the contractor, relying on an exception to the general rule:

Although “no damages for delay” clauses are recognized in the law, they will not be enforced in the face of governmental “fraud, bad faith, or active interference” with performance under the contract. The record supports the trial court’s finding that the County impeded work on the project, at [the contractor’s] expense, long after it was determined that it was safe to proceed with minimal damage to the adjacent homes.

What is “active interference”? While not explicitly defined in the Sarasota County case, it requires the showing of an affirmative willful act of the owner that unreasonably interferes with the contractor’s work.  Here are a few more lessons when dealing with a delay on a project:

  1. As a contractor, you need to first review your contracts for a “no damages for delay” clause. If one is present, then you will want to negotiate an “active interference” clause that defines what constitutes an active interference.
  2. An “active interference” could mean that the owner knows about the delay and still proceeds; or it could mean that the owner conceals or actively interferes by affirmative conduct.
  3. During performance, you should document the impact of the owner’s actions, including whether the owner failed in coordinating other trade contractors for which it alone is responsible.
  4. Even if your contract does not have an “active interference” exception, there may be a common law remedy of bad faith or negligence on the owner’s part, which causes the delays.  That would depend on your particular state.

In the end, active interference to overcome a “no damages for delay” clause involves more than a turtle crossing the road. The dispute will be decided on the express contract language and the offending conduct giving rise to the additional damages and delays.

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.