Florida Appeals Court Overturns $1.4 Million In Coverage For Sinkhole

sinkhole

LAKELAND, March 30 — A Florida appeals panel partially  reversed a lower court decision awarding $1.4 million in fees, costs and prejudgment interest to an insured in a sinkhole coverage dispute.

In September 2005, River Oaks Condominium II Association Inc. sued its insurer Citizens Property Insurance Corp.in a Florida state court for breach of contract.  The complaint alleged Citizens failed to conduct an investigation for sinkhole claims as required under Florida law.  The condo association also sought a declaratory judgment ordering coverage for the sinkhole collapses including costs to stabilize them.  A court- ordered appraisal led to  awards totaling $4,777,607 for damage to 12 units.  The association was also awarded attorney fees and costs.

Citizens appealed to the Second District Florida Court of Appeal, and contended nearly $900,000.00 in appraisal, property management and public adjusting fees and costs were not covered, and the appeals court agreed:

“We conclude that the trial court abused its discretion in taxing the property management fees and public adjuster fees because they were not litigation costs. Further, as compared to expert witnesses, a public adjuster is more akin to a consulting expert, whose costs should not be taxed according to the guidelines. We agree with Citizens that these were not proper taxable costs, and we reverse on this issue…River Oaks was required to pay its own appraiser and bear an equal share of the umpire and other appraisal expenses.”

The Court, in an opinion written by Judge Stevan Northcutt,  also found that the trial court’s use of a 2.0 multiplier in to calculate attorneys fees was not lawful.

Citizens Property Insurance Corp. v. River Oaks Condominium II Association, Inc. (Fla. App. 2nd Dist., 2016)

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