Background
Susan Reed and Kent Lonngren reported Hurricane Ian damage to their home in October 2022. Citizens Property Insurance Corporation accepted coverage, made an initial payment, reinspected the property, and issued additional payments after the homeowners submitted a substantially higher repair estimate.
After the homeowners filed a notice of intent to litigate, Citizens invoked the policy’s appraisal provision. The parties ultimately needed court involvement to resolve an impasse over selecting an umpire. Before appraisal concluded, the homeowners sued for breach of contract, asserting that appraisal had not been completed within the period referenced in section 627.70152(4)(b), Florida Statutes. The umpire issued an award for the homeowners, and Citizens paid it within the policy’s required sixty days.
The Court’s Holding
The Sixth District affirmed final summary judgment for Citizens. It held that Citizens’ payment of the appraisal award was not a confession of judgment because the claims process had not broken down and the homeowners’ lawsuit was not necessary to obtain payment.
Citizens accepted coverage, investigated further, made additional payments, promptly demanded appraisal after receiving the notice of intent, and timely paid the award. Relying on its recent decision in Letteri v. Safepoint Insurance Co., the court also held that section 627.70152(4)(b) permits an insured to sue when appraisal remains unfinished after the stated period; it does not impose a deadline by which appraisal must be completed. The homeowners therefore were not entitled to prejudgment interest or attorney’s fees under the confession-of-judgment doctrine.
Key Takeaways
- A timely payment of an appraisal award does not automatically constitute a confession of judgment.
- The doctrine does not apply when there was no breakdown in the claims process and litigation was not the necessary catalyst for recovery.
- Section 627.70152(4)(b) authorizes suit after the specified period but does not require appraisal to conclude by that date.
Why It Matters
The decision reinforces that appraisal-related attorney’s-fee and interest claims turn on whether an insurer’s conduct made litigation necessary, not simply on whether the insured filed suit before receiving an appraisal payment. Insurers that timely follow the policy’s appraisal process and pay a resulting award may avoid a confession-of-judgment finding where the claim-adjustment process remained functional.