23 Fla. L. Weekly Supp. 480a
Online Reference: FLWSUPP 2305GIBBInsurance — Automobile — Windshield repair — Declaratory action — Insurer’s demand for appraisal of windshield damage is unripe until glass repair shop’s complaint for declaratory relief seeking declaration interpreting ambiguities in policy, including appraisal provision, is resolved — Actions of insurer’s selected appraiser in retaining counsel and threatening other repair shops with litigation regarding disputes in appraisal process are not actions of “impartial” appraiser
CLEAR VISION WINDSHIELD REPAIR LLC (a/a/o Neville Gibbs) vs. PROGRESSIVE SELECT INSURANCE COMPANY. County Court, 17th Judicial Circuit in and for Broward County. Case No. 14-018730 COCE (50). September 2, 2015. Honorable Peter B. Skolnik, Judge. Counsel: Emilio R. Stillo and Andrew B. Davis-Henrichs, South Florida Trial Lawyers, LLC, Davie; and Mac S. Phillips, Phillips Law Group, for Plaintiff. Joseph T. Kissane and LonnieTessler, for Defendant.
ORDER ON DEFENDANT’S MOTION TO STAY ANDMOTION TO ENFORCE APPRAISAL
THIS CAUSE came before the Court on June 10, 2015 for hearing on Defendant’s Motion to Stay and Motion to Enforce Appraisal, and the Court, having reviewed the motion and entire court file; having reviewed the relevant legal authorities; having heard argument of counsel; and having been sufficiently advised in the premises,
ORDERS AND ADJUDGES that the Motion to Stay (is hereby DENIED as to Plaintiff’s Declaratory Count and Granted as to Plaintiff’s Breach of Contract Count) and Defendant’s Motion to Enforce Appraisal is RESERVED for the reasons set forth below.Background
On October 3, 2014, Clear Vision Windshield Repair, LLC (“Plaintiff’ or “Clear Vision”) filed suit for underpayment of comprehensive and collision property damage insurance benefits pursuant to a contract of insurance issued to Progressive’s insured. Plaintiff’s complaint contains two counts; declaratory relief and breach of contract.
On February 12, 2015, the Defendant filed a notice purportedly invoking the appraisal provision of the policy and naming Auto Glass Inspection Services (“AGIS”) as its chosen appraiser1. On the same day, the Defendant filed its Motion to Enforce Appraisal.
The Plaintiff opposes the Motion on several basis: 1) that appraisal is an inappropriate process to resolve equitable claims such as declaratory relief, 2) that AGIS is not “impartial” and that Progressive breached the policy’s appraisal provision in selecting a partial (to Defendant) appraiser in AGIS, 3) there was no “meaningful disagreement” as to the amount of loss and appraisal is premature, 4) even if the appraisal applied, the provisions is unconscionable as enforcement of the provision will exceed the amount of the claim thus ensuring the Plaintiff will lose money by participating in the appraisal process. For the reasons set forth below, this Court agrees with the Plaintiff that Defendant’s Motion to Stay Plaintiff’s Complaint for Declatory Relief be Denied.AGIS
Plaintiff seeks a declaration that Defendant’s choosen appraiser AGIS is not “impartial” as is required by the policy of insurance. Among the papers in opposition to the Motion, the Plaintiff filed correspondence dated June 21, 2013 from attorneys retained by AGIS, and which threatened various repair shops with litigation.2 The correspondence states the Alvarez & Gilbert, PLLC law firm represents AGIS in its capacity as appraiser for Progressive’s various entities. Further, the letter contains threats by AGIS to various shops of litigation seeking a judicial decree as it relates to a dispute in the appraisal process. AGIS’s correspondence to the repair shops warns them to “govern [themselves] accordingly.”
The Plaintiff has also filed a print-out of the AGIS website, on which AGIS states its mission is “to verify glass damage for the insurance industry.” The AGIS website also represents “AGIS sole purpose is to report back to the insurance industry what type of damage exists or lack thereof.” The website also indicates that “AGIS has no affiliation with any companies in the glass industry and only serves large insurance companies.”The Policy
The applicable policy provision states:
In determining the amount necessary to repair damaged property to its pre-loss physical condition the amount to be paid by us: (i) will not exceed the prevailing competitive labor rates charged in the area where the property is to be repaired and the cost of repair or replacement parts and equipment as reasonably determined by us; and (ii) will be based on the cost of repair or replacement parts and equipment which may be new, reconditioned, remanufactured, or used. . .
Additionally the policy provides:
If we cannot agree with you on the amount of a loss, then we or you may demand an appraisal of the loss. Within 30 days of any demand for an appraisal, each party shall appoint a competent and impartial3 appraiser and shall notify the other party of that appraiser’s identity.
The Claim for Declaratory Relief
In the instant case, the Plaintiff is in doubt as to the meaning and interpretation of several portions of the policy provisions which must be resolved before determining whether there is even a disagreement on the amount of the loss in order to invoke the appraisal process.
Specifically, Plaintiff is in doubt and seeks declaratory relief as to:
1) the meaning of the term “prevailing competitive labor rates” and the methodology used by the Defendant to establish same;
2) whether the term “reasonably” is capable of more than one meaning, and;
3) Declare that the Defendant’s policy provision regarding the right to appraisal does not apply to repairs of the vehicle, but to situations which require an actual cash value determination
4) Declare that the parties appoint impartial and competent appraisers and that the current appraiser selected by Progressive does not meet that requirement.
Until the Court construes the meaning of these terms in the policy, it is impossible for the parties to decide whether there is an actual disagreement as to the loss in order to invoke the appraisal provision. Also requiring resolution is whether Defendant’s current appraiser meets the policy requirement of “competent” and “impartial”.
For the reasons stated above the Court grants the motion to stay count one of the amended complaint pending discovery and resolution of count two, the Petition for Declaratory Relief.Analysis
Plaintiff contends that Defendant’s demand for appraisal is unripe until Plaintiff’s complaint for declaratory relief is resolved. In this case the Plaintiff seeks a judicial declaration interpreting what it perceives as ambiguities in the policy and as to Defendant’s appraisal request. Equitable relief may only be afforded by a court of competent jurisdiction and not an appraiser. Appraisal should not be ordered until a determination as to whether the demand for appraisal is ripe. Citizens Property Insurance Corporation v. Admiralty House Inc., 66 So.3d 342 (Fla.2nd DCA 2011) [36 Fla. L. Weekly D1436a].
In this instance, the Plaintiff contends the demand is not ripe. The Court agrees with the Plaintiff that the Plaintiff be allowed to conduct discovery as to their complaint for declaratory relief. The Court makes no ruling as to the unconscionability or illusory nature of the appraisal provision as applied to the instant case as that evidence is not before the Court.Impartiality of Defendant’s Chosen Appraiser
Plaintiff contends Defendant has violated the policy of insurance by selecting an appraiser who is not “impartial”. In Florida Ins. Guar. Ass’n v. Branco, 148 So. 3d 488 (Fla. 5th DCA 2014) [39 Fla. L. Weekly D2020a], reh’g denied Oct. 15, 2014, the Fifth District addressed whether an entity who was clearly “interested” in the outcome could serve as the party’s appraiser. In Branco, the attorney for the policy holder was selected by the policyholder to serve as the party’s appraiser. The Court held that it was impermissible to select one’s own lawyer to act in that capacity when the contract of insurance called for a “disinterested” appraiser. The policy called for each party to “choose a competent and disinterested appraiser,” and Judge Orfinger stated that the court’s research had “revealed no Florida case that has squarely addressed whether a party’s attorney may serve as a ‘disinterested appraiser.’ ” The panel looked to Pennsylvania law and concluded that “the current Code of Ethics establishes a presumption of neutrality for all arbitrators, including party-appointed arbitrators. . . . If an appraiser owes his nominating party a ‘fiduciary duty of loyalty’ or a ‘confidential relationship,’ as do attorneys, then ‘[t]he existence of such a relationship between a litigant and an [appraiser] creates too great a likelihood that the [appraiser] will be incapable of rendering a fair judgment.’ ” Donegal Ins. Co. v. Longo, 610 A.2nd 466, 468-69 (Pa.Super.Ct. 1992).
The Court in Branco found the policy provision, which requires a “disinterested appraiser,” expressed the parties’ clear intention to restrict appraisers to individuals who are, in fact, disinterested. Further, the Court held given the duty of loyalty owed by an attorney to a client, it has been concluded that attorneys may not serve as their clients’ arbitrators or appraisers when “disinterested” arbitrators or appraisers are bargained for. Id.
Similar to the requirement that the appraiser be “disinterested,” in the instant case the Defendant’s policy requires an “impartial” appraiser. Plaintiff contends that AGIS is clearly not “impartial” and has propounded discovery as to this contention. Plaintiff agrees to stay all discovery except as it relates to Plaintiff’s claim for declaratory relief. Plaintiff argues that the act of retaining counsel and threatening litigation are not the actions of an “impartial” appraiser, and this Court agrees. Further, the Plaintiff contends the Defendant breached the insurance contract by selecting an obviously “partial” appraiser in AGIS in the face of clear policy language compelling the selection of an “impartial” appraiser within 30 days of demanding appraisal.
Plaintiff also questions the “competence” of AGIS. At hearing on this matter, counsel for the Defendant stated that AGIS is an Arizona corporation with no familiarity with Florida repair shops.Conclusion
Defendant’s Motion to Stay Plaintiff’s Declaratory Count is DENIED. Defendant’s Motion to Stay Plaintiff’s Breach of Contract Count is GRANTED. The Court RESERVES as to Defendant’s Motion to Invoke Appraisal.
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1AGIS is a company which inspects glass damage for the insurance industry during the claims process.
2Plaintiff contends it is of vital import that AGIS has retained attorneys in the past to threaten repair facilities with litigation during the appraisal process.
3Black’s Law Dictionary defines “impartial” as “favoring neither; disinterested; treating all alike; unbiased; equitable, fair, and just”.