{"id":2299,"date":"2022-04-01T01:43:00","date_gmt":"2022-04-01T01:43:00","guid":{"rendered":"https:\/\/www.schirmerlaw.com\/?p=2299"},"modified":"2023-05-29T12:43:48","modified_gmt":"2023-05-29T12:43:48","slug":"which-comes-first-the-coverage-or-the-costs-unra","status":"publish","type":"post","link":"https:\/\/www.schirmerlaw.com\/blog\/2022\/which-comes-first-the-coverage-or-the-costs-unra\/","title":{"rendered":"Which Comes First, the Coverage or the Costs? Unraveling Florida\u2019s \u201cDual Track Basis\u201d Approach to Appraisal Where Coverage Has Not Been Determined"},"content":{"rendered":"\n

I know this is unfair, but off the top of your head, answer me this:<\/p>\n\n\n\n

Should coverage of a disputed loss be determined BEFORE the amount of loss is calculated? Should it be the other way around?<\/p>\n\n\n\n

Or should we be free to explore the determination of both exclusively in conjunction, or better stated, at the same time?<\/p>\n\n\n\n

If you\u2019re conflicted, I have (great?) news for you: you\u2019re not alone! Florida courts have been struggling to find a consistent response to such a determination. And it all started with a 2010 appellate decision issued from Florida\u2019s 3rd<\/sup> District Court of Appeals (DCA) arising from a dispute between an insured and insurer. In Sunshine State Ins. Co. v. Rawlins,<\/em> the issue on appeal was whether the lower court of Miami-Dade Circuit Court had properly issued its Order allowing appraisal to go forward while preserving the insurer\u2019s right to contest coverage. Rawlins,<\/em> relying on its earlier decision in Paradise Plaza<\/em>, determined that having a bright-line rule of placing the issue of coverage first before arbitration \u201cmight have adverse effects on the expeditious, out of court disposition of litigation, which is the reason arbitration is a favored remedy.\u201d[1]<\/a> Thus, the term of art \u201cdual track basis\u201d came into fruition in the context of allowing appraisal to go forward while simultaneously attempting to determine coverage as a matter of law.<\/p>\n\n\n\n

Later that same year, in Broward County Circuit Court, another appeal was underway, this time headed to the 4th<\/sup> DCA for an action between an insurer and its insured. However, this Court relied on its own decision, which came to a different conclusion regarding appraisal. In Citizens Prop. Ins. Corp. v. Mich. Condo Ass\u2019n,<\/em> the issue on appeal was similarly the lower court granting an insured\u2019s motion to compel appraisal before resolving the underlying coverage dispute. Citizens,<\/em> relying on its earlier decision in Sunshine State Ins. Co. v. Corridori,<\/em> however, determined that a trial court \u201cmust resolve all underlying coverage disputes prior to ordering appraisal.\u201d[2]<\/a> The insured here attempted to rely on Rawlins<\/em> to argue the dual track basis be employed. However, the 4th<\/sup> DCA affirmed its prior decision which it contended was supported by the holding in Engle v. Liggett Group, Inc.,<\/em> 945 So.2d 1246, 1262-63 (Fla. 2006), (holding that a finding of liability must \u201cprecede[s] a determination of damages\u201d) and officially certified conflict with the 3rd<\/sup> DCA.[3]<\/a><\/p>\n\n\n\n

Since then, there has been a constant disconnect of the DCA\u2019s regarding which method should be enacted all throughout the process. Now, let me be clear: Florida has determined that the issue of coverage (when in dispute) falls into the purview of the Court and outside the scope of appraisal.[4]<\/a> However, where coverage has been admitted by the insurer, amount of loss determinations may be made within the scope of the appraisal process.[5]<\/a> Despite this ruling, these conflicting positions exist.<\/p>\n\n\n\n

Several courts have attempted to weigh in on the subject matter, and in some cases, even caused further confusion (pay attention to the language, because here is where it gets a bit difficult to see what reasoning is being followed).<\/p>\n\n\n\n