A recently issued Opinion from the Fourth District Court of Appeal reviews whether providing notice of the right to mediation prior to a dispute waives the right to appraisal.

In Grnja v. People’s Trust Insurance Company, after the insureds submitted their claim for damage sustained Dec 2021, People’s Trust (PTI) notified the insureds that their claim was covered and provided PTI’s estimate and scope of repairs. The correspondence noted that if the insureds did not agree with the assessment of repairs, then the policy contained an appraisal provision. PTI also advised the insured of the Department of Financial Services mediation program. The insureds notified PTI of their disagreement and submitted a Sworn Proof of Loss (SPOL) and estimate. Thereafter, they filed suit, and PTI responded by filing a motion to abate and compel appraisal, which the trial court granted. The insureds appealed.

The insureds argued an insurer’s failure to comply with section 627.7015(2) results in a waiver of the right to compel appraisal and relied on the language in Lime Bay and Lavadie to essentially argue that PTI’s mediation notice in this case was a nullity because it provided the notice before there was a dispute between the parties. The insureds argued “People’s Trust needed to have sent the mediation notice when the dispute ripened and it was on notice” of a dispute relating to a material issue of fact.

The Fourth DCA affirmed the trial court’s decision citing case law finding the notice requirement’s purpose “is to prevent an insurer from withholding notification and thereby trapping ‘an uninformed insured into the very same potentially lengthy and costly appraisal process the statute was meant to guard against.’”.

The Fourth DCA observed that providing the notice too late contravenes the purpose of the statute, but providing the notice too early does not. This is further true since the amended statute allows an insurer to comply with the statute’s mediation notice requirements “[a]t the time of issuance and renewal of a policy” not only at the time of a dispute between the parties relating to a material issue of fact, like the predecessor statute.

You can read the full opinion here.

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