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Florida Second DCA rules that homeowner was not required to comply with conditions precedent to filing lawsuit when homeowner's insurance company had already rejected sinkhole claim

On August 23, 2017, in Castro v. Homeowners Choice Property & Casualty Ins. Co., No. 2D15-5456, the Florida Second DCA reversed a summary judgment that had been granted by the trial court to the defendant homeowners insurance company on the basis that the plaintiff homeowner had failed to comply with all of the policy’s conditions precedent to filing a lawsuit. The plaintiff homeowner had made a claim under his policy for damage allegedly caused by a sinkhole. After obtaining an engineering report that there was no sinkhole, the insurance company denied the claim without first requiring the homeowner to submit to an examination under oath, file a sworn proof of loss or submit records and documents, all of which were conditions precedent to filing a lawsuit.

Several years later, after first obtaining an engineering firm’s opinion that there was in fact sinkhole activity on the property, the homeowner requested that the insurance company reconsider its decision. The insurance company then demanded that the homeowner submit to an examination under oath, file a sworn proof of loss and submit records and documents in support of his claim. The homeowner instead filed a lawsuit against the insurance company for breach of contract. The insurer moved for summary judgment, contending that the claim had in effect been reopened by the homeowner and that the conditions precedent applied. The trial court agreed, rejecting the plaintiff’s argument that the insurance company had waived compliance with the conditions precedent when it denied coverage.

The Second DCA cited Tower Hill Select Ins. Co. v. McKee, 151 So. 3d 2, 3-4 (Fla. 2d DCA 2014) as precedent for the proposition that when an insurance carrier investigates a claim of loss and denies coverage because it concludes that a covered loss has not occurred, the insurance carrier cannot assert the insured's failure to comply with the policy's conditions precedent to filing suit as a basis for summary judgment. See also Hartford Accident & Indem. Co. v. Phelps, 294 So. 2d 362, 365 (Fla. 1st DCA 1974) ("[A]n insurer, by unconditionally denying any liability upon its policy, waives proof of loss required by the policy."). The Court also summarily rejected the defendant’s argument that the plaintiff had in effect unilaterally “reopened” the claim by asking for reconsideration of the previous denial, noting that nothing in the policy supported this conclusion.