Florida’s Second District Court docket of Enchantment issued an opinion yesterday in Brito v. Residents Property Insurance coverage Company that may be a important win for policyholders. 1 On the heart of the case was a dispute over how damages ought to be measured and introduced to a jury when an insurer has outright denied protection for a loss. The court docket’s ruling reversed a directed verdict that had been entered in favor of Residents, holding that the trial court docket misapplied Florida legislation by limiting the policyholders to precise money worth damages and excluding vital knowledgeable testimony.
The case arose when the policyholders filed a declare with Residents Property Insurance coverage Company for wind injury to their house’s roof. Residents denied the declare totally, asserting the injury was brought on by put on and tear, which is excluded below the coverage. The owners then filed swimsuit for breach of contract, alleging they had been entitled to the total substitute price of the injury below the phrases of their insurance coverage coverage and Florida Statute § 627.7011. As a part of their proof, they introduced knowledgeable testimony to ascertain the character of the injury and the price of repairs.
Dennis James, a licensed basic and roofing contractor, was a key knowledgeable witness for the policyholders. He was retained to evaluate the injury and supply an estimate for the required repairs. Using industry-standard software program, James calculated each the substitute price worth and the precise money worth of repairs for numerous components of the house, together with the roof and inside rooms. His estimate was primarily based partly on findings from the policyholders’ engineering knowledgeable, who had decided that the roof wanted to get replaced attributable to in depth injury and compliance with Florida Constructing Code necessities. Nevertheless, the trial court docket, agreeing with Residents’ movement in limine, restricted his testimony to precise money worth and excluded the total estimate doc from proof as a result of it included substitute price values. Following the trial, the policyholders appealed.
On enchantment, Residents argued that below the coverage and state legislation, substitute price protection was solely payable after the insureds really accomplished the repairs and incurred these prices. They contended that as a result of the policyholders had not carried out the repairs previous to trial, they had been restricted to recovering solely precise money worth. Residents additional maintained that any estimate, together with matching prices or code upgrades, was exterior the scope of the coverage’s protection. They relied closely on the Third District’s choice in Vazquez v. Residents, 2 which restricted recoverable damages in a case the place the insurer had accepted protection however disputed the quantity.
In distinction, the policyholders’ appellate transient leaned on the Third District’s ruling in Residents v. Tio, which held that when an insurer has denied protection outright, it can’t then use the coverage’s cost timing provisions to restrict the insured’s restoration at trial. 3 They argued that the loss ought to have been adjusted on a substitute price foundation from the outset and that the trial court docket’s choice to exclude proof of these prices disadvantaged them of their rights below the coverage and Florida legislation.
The Second District Court docket of Enchantment sided with the policyholders, reversing the trial court docket’s ruling. It held that the trial court docket erred in limiting the measure of damages to precise money worth and in excluding Dennis James’s estimate. The court docket emphasised that each the coverage and the statute apply to “coated losses” and that when an insurer has denied protection totally, it can’t depend on coverage provisions about timing of funds to restrict the insured’s proper to current proof of substitute prices in a breach of contract motion. The court docket explicitly aligned with the reasoning in Tio and authorized battle with the Fourth District’s more moderen choice in Qureshi, 4 which had taken the other method.
In a concurring opinion, Decide Atkinson added that the insurer’s argument was logically flawed. He defined that damages in a breach of contract case are supposed to place the injured occasion within the place they’d have been in had the contract not been breached. On this context, that features each precise money worth and the substitute price protection the insurer would have paid had it acknowledged protection. He rejected the notion that the insureds needed to first full repairs out-of-pocket earlier than searching for these damages, significantly when the insurer had refused to acknowledge the declare in any respect. Whereas he expressed some hesitation about making use of the doctrine of prevention, he strongly agreed with the broader precept that denial of protection can’t be used as a defend to restrict damages at trial.
This choice is a transparent affirmation of the rights of Florida owners below substitute price insurance policies. It reinforces that insurers who deny protection can’t later depend on technical provisions to slim the damages a jury could contemplate. It additionally acknowledged the significance of knowledgeable testimony in presenting a complete image of loss and damages, and reestablishes the precept that justice shouldn’t be contingent on a policyholder’s potential to finance repairs earlier than securing the advantages for which they paid. For policyholders, this holding is a step in the suitable route when insurers fail to honor their guarantees.
Thought For The Day
“The key of change is to focus all your vitality not on combating the outdated, however on constructing the brand new.”
—Dan Millman
1 Brito v. Residents Prop. Ins. Corp., No. 2D24-664 (second DCA June 18, 2025).
2 Vazquez v. Residents Prop. Ins. Corp., 304 So. 3d 1280 (Fla. 3d DCA 2020).
3 Residents Prop. Ins. Corp. v. Tio, 304 So. 3d 1278 (Fla. 3d DCA).
4 Common Prop. & Cas. Ins. Co. v. Qureshi, 396 So. 3d 564 (Fla. 4th DCA 2024).
