Kennedy v. First Protective Insurance Company

Summary of Case by Allison Van Fleet, Associate Attorney

The Third District Court of Appeal has recently interpreted Florida Statute § 627.7015 to preclude an insurer from demanding appraisal prior to informing the insureds of the statutory right to mediate.

In Kennedy v. First Protective Insurance Company, No. 3D18-1993, 2019 WL 1051386 (March 6, 2019), a dispute arose between the insureds and the carrier regarding whether the windows required replacement versus whether they could be repaired following Hurricane Irma. Importantly, in November of 2017 the Insureds requested photographs taken by the carrier’s adjuster during the investigation of the claim. The senior adjuster provided the report produced based upon the investigation but refused to provide the photographs due to the work product doctrine. Id. Several months later, the carrier sent correspondence to the insureds demanding appraisal under the policy. Id. Under Florida Statute § 627.7015, an insurance carrier is required to notify the policyholder of its right to participate in mediation. Id. Further, if the carrier fails to notify the insureds of the right to participate in the mediation the insured cannot be required to go through the appraisal process. Id. (citations omitted).

The carrier in Kennedy failed to provide the insureds with notification of the right to participate in mediation prior to demanding appraisal. The Third District stated that as the carrier seemingly anticipated litigation as early as November 2017, by invoking the work product doctrine, it went against the public policy intentions of § 627.7015 — to bring the parties together without an adversarial process. Id. (citing Universal Prop. & Cas. Ins. Co. v. Colosimo, 61 So. 3d 1245). As such, the Third District held that an insurer waives its right to appraisal if appraisal is demanded prior to providing the insureds of their statutory right to mediate.