Great Lakes Ins. Se v. Concourse Plaza

604 F.Supp.3d 1339

GREAT LAKES INSURANCE SE, Plaintiff,

v.CONCOURSE PLAZA, A CONDOMINIUM ASSOCIATION, INC., Defendant.

Case No. 21-cv-21873-BLOOM/Otazo-Reyes

United States District Court, S.D. Florida.

Signed May 25, 2022

Entered May 26, 2022

David Brian Levin, Brian W. Fernandez, and Spencer D. Leach, Baker Donelson Bearman, Caldwell & Berkowtiz, PC, Ft. Lauderdale, FL, for Plaintiff.

Mark Andrew Boyle, Boyle & Leonard, P.A., Fort Myers, FL, for Defendant.

ORDER ON MOTION TO COMPEL BINDING APPRAISAL PROCEEDINGS

BETH BLOOM, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court upon Defendant/Counter-Plaintiff Concourse Plaza, A Condominium Association, Inc.’s ("Concourse" or "Defendant") Motion to Compel Binding Appraisal Proceedings on a Dual-Track Basis, ECF No. [30] ("Motion"). Plaintiff/Counter-Defendant Great Lakes Insurance SE ("Great Lakes" or "Plaintiff") filed a Response in Opposition, ECF No. [33] ("Response"), to which Defendant filed a Reply, ECF No. [34] ("Reply"). The Court has carefully reviewed the Motion, the record in this case, the applicable law, and is otherwise fully advised. For the reasons set forth below, the Motion is denied.

I. BACKGROUND

According to the Complaint, Concourse purchased a commercial lines insurance policy from Great Lakes ("Policy"). ECF No. [1] ¶ 7. After Hurricane Irma, Concourse filed a Notice of Loss on September 14, 2017, claiming windstorm damage on September 10, 2017. See id. ¶ 8. On March 5, 2018, Great Lakes sent Concourse a letter stating that Great Lakes would not pay for the loss because Great Lakes’ investigation determined that the damage fell below the deductible. See id. ¶¶ 10-11; see also ECF No. [1-1] ("Coverage Letter"). On September 4, 2020, Concourse notified Great Lakes that it intended to pursue additional insurance benefits. See ECF No. [1] ¶ 12; see also ECF No. [1-2] ("Notice"). On April 8, 2021, more than three (3) years after the date of the alleged windstorm damage, Concourse sent Great Lakes a proof of loss for $6,208,518.62 and a letter demanding appraisal. See ECF No. [1] ¶ 15; see also ECF No. [1-3] ("Demand for Appraisal"). The Policy's Appraisal Clause states in relevant part:

If we and you disagree on the value of the property or the amount of loss, either may request an appraisal of the loss, in writing. In this event, each party must select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property and amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:

a. Pay its chosen appraiser; and

b. Bear the other expenses of the appraisal and umpire equally.

If there is an appraisal, we still retain our right to deny the claim.

See ECF No. [9] at 58 ("Appraisal Clause").

On May 19, 2021, Great Lakes filed its Complaint, seeking declaratory judgment that the Notice on September 4, 2020, did not constitute valid notice of a supplemental claim, and that the Demand for Appraisal on April 8, 2021, was an untimely supplemental claim. See ECF No. [1] at 5. Great Lakes contends that Florida Statute § 627.70132 applies to bar any claims. See id. ¶ 16. Because the Demand for Appraisal was sent more than three (3) years after the incident, Great Lakes seeks a "declaration that [Concourse] failed to timely provide statutory notice of its supplemental claim for damages, thereby rendering its demand for appraisal untimely." ECF No. [1] ¶ 1.

On August 6, 2021, Concourse filed its Answer to the Complaint asserting nine (9) affirmative defenses. See ECF No. [9] at 7-14. Concourse also raised three (3) Counterclaims: an action for specific performance to compel Great Lakes’ compliance with the Appraisal Clause ("Count I" or "Counterclaim"); an action for declaratory judgment regarding "(i) Parties’ rights, duties and responsibilities under the Policy with respect to the Loss and the Insurance Claim (and those insurance policy benefits recoverable thereunder); (ii) declaration of the legal status of each of the Parties as it concerns the Policy; and (iii) award of all other relief (separate and apart from the damages and/or other forms of relief available to the Insured under any other stated count set forth herein)" ("Count II"); and an action for breach of contract seeking an award of compensatory damages, consequential damages, attorneys’ fees, costs, and pre-judgment, post-loss, and/or post-judgment interest ("Count III" and collectively with Count I, "Counterclaims"). See id. at 24-31. On December 19, 2021, the Court dismissed Count II of Concourse's Counterclaims. See ECF No. [26].

On March 15, 2022, Defendant filed the instant Motion to Compel Appraisal. Defendant argues that appraisal is warranted because (1) appraisals are the preferred method for resolving "amount of loss" disputes; (2) appraisals are appropriate and mandatory where the insurer acknowledges coverage, either in whole or in part; (3) the appraisal panel is uniquely qualified to set the amount of the loss, as well as determine scope and method of necessary repairs; (4) Defendant is entitled to have the loss resolved via binding appraisal proceedings in accordance with the Appraisal Clause; and (5) the Policy contemplates a dual-track approach to a contemporaneous resolution of the "amount of loss" and the statutory "notice" questions. See ECF No. [30].

Plaintiff responds that the Motion should be denied because (1) the Motion is tantamount to a procedurally improper motion for summary judgment; and (2) appraisal is not appropriate before the Court addresses whether the supplemental claim is statutorily time-barred. See ECF No. [33]. Plaintiff also argues that if the Court grants the Motion, then attorneys’ fees or costs should not be awarded during the appraisal proceedings, and the appraisal proceedings should be non-binding and subject to the Court's confirmation as to the timeliness of the appraisal demand. See id. at 9.

Defendant replies that the Court has the authority to compel appraisal even if the Motion is styled as a motion to compel as opposed to a motion for summary judgment. See ECF No. [34]. Defendant further avers that the Court need not address the threshold issue of timeliness before compelling the parties to appraisal. See id.

II. LEGAL STANDARD

Under Florida law, "[a]ppraisal provisions in insurance policies generally are treated the same as arbitration clauses." Waterford Condo. Ass'n of Collier Couty, Inc. v. Empire Indem. Ins. Co. , No. 2:19-CV-81-FTM-38UAM, 2019 WL 4863134, at *1 (M.D. Fla. July 3, 2019), report and recommendation adopted sub nom. Waterford Condo. Ass'n of Collier Cnty., Inc. v. Empire Indem. Ins. Co. , No. 2:19-CV-81-FTM-38NPM, 2019 WL 3852731 (M.D. Fla. Aug. 16, 2019) (citing Wright Way Emergency Water Removal, LLC v. Mt. Hawley Ins. Co. , No. 8:16-cv-1163-T-17MAP, 2016 WL 9526569, at *2 (M.D. Fla. July 29, 2016) (citing Fla. Ins. Guar. Ass'n, Inc. v. Castilla , 18 So. 3d 703, 704 (Fla. 4th DCA 2009) ; Preferred Mut. Ins. Co. v. Martinez , 643 So. 2d 1101, 1102 (Fla. 3d DCA 1994) )). The presence of a valid arbitration provision, and by extension a valid appraisal clause, raises a strong presumption of enforcement. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. , 473 U.S. 614, 630-31, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985) (stressing that the enforcement of a mutually agreed upon arbitration or forum-selection clause serves as an "indispensable precondition to the achievement of the orderliness and predictability essential to any international business transaction").

When presented with a motion to compel arbitration, and by extension a motion to compel appraisal, a district court will consider three factors: (1) whether a valid agreement exists; (2) whether an arbitrable or appraisal issue exists; and (3) whether the right was waived. See Nat'l Auto Lenders, Inc. v. SysLOCATE, Inc. , 686 F. Supp. 2d 1318, 1322 (S.D. Fla. 2010) aff'd , 433 F. App'x 842 (11th Cir. 2011) ; see also Sims v. Clarendon Nat'l Ins. Co. , 336 F. Supp. 2d 1311, 1326 (S.D. Fla. 2004) (citing Marine Envt'l. Partners, Inc. v. Johnson , 863 So. 2d 423, 426 (Fla. 4th DCA 2003) ; and Seifert v. U.S. Home Corp. , 750 So. 2d 633 (Fla. 1999) ) ("Under both federal and Florida law, there are three factors for the court to consider in determining a party's right to arbitrate: (1) a written agreement exists between the parties containing an arbitration clause; (2) an arbitrable issue exists; and (3) the right to arbitration has not been waived."). "A plaintiff challenging the enforcement of an arbitration agreement bears the burden to establish, by substantial evidence, any defense to the enforcement of the agreement." Inetianbor v. CashCall, Inc. , 923 F. Supp. 2d 1358, 1362 (S.D. Fla. 2013) (citing Bess v. Check Express , 294 F.3d 1298, 1306-07 (11th Cir. 2002) ).

III. DISCUSSION

As noted above, Defendant argues that appraisal is warranted because (1) appraisals are the preferred method for resolving "amount of loss" disputes; (2) appraisals are appropriate and mandatory where the insurer acknowledges coverage, either in whole or in part; (3) the appraisal panel is uniquely qualified to set the amount of the loss, as well as determine scope and method of necessary repairs; (4) Defendant is entitled to have the loss resolved via binding appraisal proceedings in accordance with the Appraisal Clause; and (5) the Policy contemplates a dual-track approach to a contemporaneous resolution of the "amount of loss" and the statutory "notice" questions. See ECF No. [30]. Plaintiff responds that (1) the Motion is tantamount to a procedurally improper motion for summary judgment; and (2) appraisal is not appropriate because the Court must address whether the supplemental claim is statutorily...