State Farm Florida Insurance Company v. Carl Hochreiter and Melissa Hochreiter

By: Nicole Martingano

Case No. 5D22-72

The Fifth District Court of Appeals reversed the trial court’s ruling on the basis that the entry of judgment on merits based on an appraisal award, without considering coverage defenses, violated the insurer’s due process rights.

Following a hailstorm, a scope-and-price dispute regarding damages to the Hochreiters’ (“Insureds”) roof arose. State Farm responded to the Complaint demanding appraisal, a stay of litigation, and an extension of time to respond to the Complaint, which was granted with the caveat that the trial court retained jurisdiction  “regarding the issue of fees and costs and other post appraisal matters of coverage, if any, once appraisal is complete.” The Order also included that State Farm was to file a response to the complaint within 20 days should any issue remain. An appraisal award was entered which explicitly stated that payment would be subject to the policy provisions and limitations.

The Insureds then moved to confirm the appraisal award, arguing that State Farm failed to respond to their complaint and raise defenses within 20 days of the signed appraisal. The trial court granted the motion to confirm orally at a hearing to regarding confirming the appraisal award and issued an order explaining State Farm “failed to timely assert any affirmative defenses pursuant to the trial court’s order that granted an appraisal.”

State Farm appealed the final judgment, asserting the trial court failed to provide adequate due process by jumping directly from the appraisal award to a judgement on the merits of the case without consideration for State Farm’s defenses. The Fifth District Court agreed, finding the trial court’s order on appraisal as a basis for not allowing State Farm to argue its coverage defenses as an error.

Ultimately, the Fifth District Court reversed and remanded the final judgment entered allowing the trial court to consider and adjudicate based on the coverage determinations.