131_C152

INSURED HAD RIGHT TO APPRAISAL REGARDING ORDINANCE AND LAW COVERAGE

Commercial Property	Appraisal
Ordinance and Law	Building Codes

Roy Jossfolk submitted a claim for damages to his insured property to United Property & Casualty Insurance Company (United). The claim alleged that Hurricane Wilma damaged the property. United did not find any wind damage but it paid for other damages. Jossfolk did not agree with the amount that United paid and requested an appraisal. Each party selected its own appraiser and they selected an umpire. The umpire submitted a proposed appraisal for damages that did not include repairs to the roof. Jossfolk’s appraiser objected because the appraisal did not include Ordinance and Law coverage to replace the roof. He believed it was necessary to include it because he thought that the building department would not permit roof repairs that did not meet current code. The umpire ultimately increased the award on other damages and allowed removing and replacing about 220 square feet of concrete roofing tile. The award document itself clearly stated that it did not appraise Ordinance and Law.

Jossfolk’s contractor applied for a roofing permit from the City of Weston (Weston) that claimed that 1,359 square feet (34%) of the roof area had to be repaired. Weston rejected the permit because it exceeded the 25% of the total roof area that could be repaired without replacing the entire roof to conform to the current code.

Jossfolk then asked United to pay for the entire roof under Ordinance and Law coverage. United responded by stating that “this claim was settled in appraisal on April 27, 2009 in which the umpire rejected your request for law and ordinance.” (Emphasis added). This led Jossfolk to file a declaratory judgment action that sought a ruling that United must participate in an appraisal for Ordinance and Law coverage. United responded and filed its motion for summary judgment. The motion stated that the previous appraisal did not include loss for Ordinance and Law coverage and that Jossfolk was not entitled to an appraisal. The trial court granted United’s motion without making a declaration of Jossfolk’s rights. Jossfolk appealed.

United argued that the arbitration code applied to this appraisal process. The appellate court stated that previous case law held that the appraisal clause was not an agreement to arbitrate and the Arbitration Code’s formal procedures did not apply. It rejected United’s argument that the only way Jossfolk could challenge the arbitration award was through the Arbitration Code because previous Florida case law ruled that it did not apply to appraisal cases.

United argued that the appraisers denied Ordinance and Law coverage. However, the court concluded that the appraisers stated only that it was not, in fact, appraised. Previous case law supported Jossfolk’s contention that Ordinance and Law is not recoverable until it is incurred. As a result, it could not have been appraised at the time of the original appraisal. Jossfolk had not yet applied for repairs to the roof at the time of the appraisal. This meant that he had not incurred (or become liable for) any additional expense until Weston required that he comply with current ordinances in order to complete repairs. According to previous case law, that was the point when he incurred the additional loss, for which he had the right to an appraisal.

United also argued that Ordinance and Law coverage was not implicated because the appraiser’s allowance for 220 square feet of tile replacement was significantly less than the 25% of total area that would trigger Weston’s requirement to replace the entire roof to conform to current code standards. However, United did not include this argument in its motion for summary judgment. In any event, Jossfolk submitted an affidavit from his general contractor that stated that Weston would require replacing the entire roof because the original tiles were no longer made and replacements were not available. As a result, the evidence did not conclusively refute this case’s factual issues.

The appellate court reversed the circuit court’s award of summary judgment in favor of United and remanded the case for further proceedings consistent with this opinion.

District Court of Appeal of Florida, Fourth District. Roy Jossfolk, Appellant, v. United Property & Casualty Insurance Company, Appellee.
No. 4D12–443. March 20, 2013. 2013 WL 1136315 (Fla.App. 4 Dist.)