Opinion
No. 1D20-3273
02-16-2022
FIRST CALL 24/7, INC., a/a/o Kole Rhodes and Meghan Rhodes, Appellant, v. CITIZENS PROPERTY INSURANCE CORP., Appellee.
Erik D. Diener of The Diener Firm, P.A., Plantation, for Appellant. C. Ryan Jones and Scot E. Samis of Traub Lieberman Straus & Shrewsberry LLP, St. Petersburg, for Appellee.
Erik D. Diener of The Diener Firm, P.A., Plantation, for Appellant.
C. Ryan Jones and Scot E. Samis of Traub Lieberman Straus & Shrewsberry LLP, St. Petersburg, for Appellee.
Ray, J.
First Call 24/7 appeals an order granting final summary judgment in favor Citizens Property Insurance Corporation, finding that claims for mitigation services are subject to the appraisal provision in a homeowner's insurance policy issued to Kole and Meghan Rhodes. We agree with the trial court and affirm.
I.
The Rhodes' home suffered hurricane damage that was covered by a homeowner's insurance policy issued by Citizens. Pursuant to their contractual obligation to protect the insured property from further damage, the Rhodes hired First Call to perform emergency mitigation services. In exchange for First Call's services, they assigned the right to insurance benefits for First Call's services to First Call.
First Call invoiced Citizens for $40,253.44. After investigating the claim, Citizens paid First Call $8,195.99 and invoked the policy's appraisal clause to resolve the dispute over the difference of $32,057.45.
First Call did not participate in the appraisal process and sued Citizens for breach of contract instead. Later, it amended its complaint to substitute a count for declaratory relief. Relevant to this appeal, it argued that the appraisal process did not apply to mitigation services. First Call then filed a motion for entry of final judgment. Citizens filed a response in opposition and a countermotion for summary judgment, arguing that it was entitled to resolve the claim by appraisal as a matter of law. After a hearing on the motions, the trial court denied First Call's motion and granted Citizens' motion for summary judgment, finding that the appraisal provision applied to mitigation services. It entered final judgment for Citizens and ordered the parties to proceed with the appraisal process established by the insurance policy. This appeal follows.
II.
"A trial court's interpretation of a contract is a matter of law and is thus subject to de novo review." Rose v. Steigleman , 32 So. 3d 644, 645 (Fla. 1st DCA 2010). "The initial determination of whether the contract term is ambiguous is a question of law for the court, and, if the facts of the case are not in dispute, the court will also be able to resolve the ambiguity as a matter of law." Strama v. Union Fid. Life Ins. Co. , 793 So. 2d 1129, 1132 (Fla. 1st DCA 2001). "However, ‘[w]here the terms of the written instrument are disputed and reasonably susceptible to more than one construction, an issue of fact is presented as to the parties’ intent which cannot properly be resolved by summary judgment.’ " Id. (alteration in original) (emphasis added) (quoting Universal Underwriters Ins. Co. v. Steve Hull Chevrolet, Inc. , 513 So. 2d 218, 219 (Fla. 1st DCA 1987) ).
A "guiding principle that [the Florida Supreme Court] has consistently applied [is] that insurance contracts must be construed in accordance with the plain language of the policy." Swire Pac. Holdings, Inc. v. Zurich Ins. Co. , 845 So. 2d 161, 165 (Fla. 2003) ; see also § 627.419(1), Fla. Stat. (2021) ("Every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended, or modified by any application therefor or any rider or endorsement thereto."). "Ordinarily, ‘in the absence of some ambiguity, the intent of the parties to a written contract must be ascertained from the words used in the contract, without resort to extrinsic evidence.’ " Skopelos Seafood & Steak Rest., Inc. v. Estate of Silivos , 17 So. 3d 834, 836 (Fla. 1st DCA 2009) (quoting Lee v. Montgomery , 624 So. 2d 850, 851 (Fla. 1st DCA 1993) ).
Throughout its arguments, First Call returns to the general rule of contract interpretation that an "ambiguous term in a contract is to be construed against the drafter." City of Homestead v. Johnson , 760 So. 2d 80, 84 (Fla. 2000). But that rule "is not to be resorted to unless necessary" and if "satisfactory results can be reached by other rules of analysis and construction, it may not be invoked." W. Yellow Pine Co. v. Sinclair , 83 Fla. 118, 90 So. 828, 831 (1922) ; see also DSL Internet Corp. v. TigerDirect, Inc. , 907 So. 2d 1203, 1205 (Fla. 3d DCA 2005) ("The construction-against-the-drafter principle is a rule of last resort and is inapplicable when there is evidence of the parties' intent at the time they entered into the contract."); Allstate Ins. Co. v. Shofner , 573 So. 2d 47, 49 (Fla. 1st DCA 1990) ("Obviously, the rule that ambiguities must be construed against the insurer applies only when a genuine inconsistency, uncertainty, or ambiguity in meaning remains after resort to ordinary rules of construction; it does not allow courts to rewrite the contracts, add meaning that is not present, or otherwise reach results contrary to the manifest intention of the parties.").
For the reasons discussed below, the construction-against-the-drafter rule does not apply here. Reading the policy as a whole and giving the appraisal provision its plain meaning, the provision is unambiguous and applies to the mitigation services at issue.
A.
The policy is divided into two sections. Section I deals with property coverage, and Section II deals with liability coverage. Each section has its own set of conditions, and the appraisal provision is included only under Section I's conditions; the policy separately groups conditions that apply to both sections.
Like Section II, Section I has four separate parts. Coverage for reasonable emergency measures, such as the mitigation services at issue, is included under the first part of Section I entitled "PROPERTY COVERAGES" and within a subsection entitled "Additional Coverages":
SECTION I — PROPERTY COVERAGES
....
F. Additional Coverages
....
2. Reasonable Emergency Measures
a. We will pay up to the greater of $3,000 or 1% of your Coverage A limit of liability for the reasonable costs incurred by you for necessary measures taken solely to protect covered property from further damage, when the damage or loss is caused by a Peril Insured Against.
The appraisal provision is in the fourth part of Section I entitled "CONDITIONS" under a subsection entitled "Mediation Or Appraisal." Relevant to this appeal, it describes what is subject to appraisal, the requirements for invoking the process, how the appraisal will be conducted, and what an award must include:
SECTION I — CONDITIONS
....
F. Mediation Or Appraisal
2. Appraisal
Appraisal is an alternate dispute resolution method to address and resolve disagreement regarding the amount of the covered loss.
a. If you and we fail to agree on the amount of loss, either party may demand an appraisal of the loss. If you or we demand appraisal, the demand for appraisal must be in writing and shall include an estimate of the amount of any dispute that results from the covered cause of loss.
The estimate shall include a description of each item of damaged property in dispute as a result of the covered loss, along with the extent of damage and the estimated amount to repair or replace each item.
....
f. The appraisal award will be in writing and shall include the following:
(1) A detailed list, including the amount to repair or replace, of each specific item included in the award from the appraisal findings.
(2) The agreed amount of each item, its replacement cost value and corresponding actual cash value; and
(3) A statement of "This award is made subject to the terms and conditions of the policy."
....
h. You, we, the appraisers and the umpire shall be given reasonable and timely access to inspect the damaged property, in accordance with the terms of the policy.
B.
First Call begins by arguing that the appraisal provision is ambiguous with respect to the scope of appraisal, and therefore, it must be construed against Citizens as the drafter. Under First Call's reading of the policy, the appraisal provision applies only to existing property damage not yet repaired and not to incurred costs for work already completed. But each of the arguments it offers in support of its interpretation is either contrary to the plain language of the policy, focuses on isolated words or phrases rather than the policy as a whole, or otherwise lacks merit.
First, it asserts that the appraisal provision does not define the type of disputes subject to appraisal. But when read as a whole, the appraisal provision reveals absolutely no basis to exclude mitigation services. In fact, the operative language allows either party to demand appraisal "[i]f you and we fail to agree on the amount of loss." The demand for appraisal must be in writing and include an estimate "of the amount of any dispute that results from the covered cause of loss ." Here, the hurricane damage First Call was hired to mitigate is a covered loss under the policy; Citizens has admitted coverage for that damage and the mitigation services rendered in response. What remains in dispute is the amount owed for those services, which falls within the category of "any dispute that results from the covered cause of loss." This is a disagreement regarding the amount of the covered loss, which is exactly what appraisal is designed to resolve. See Johnson v. Nationwide Mut. Ins. Co. , 828 So. 2d 1021, 1022 (Fla. 2002) (holding that when an insurer admits coverage for a loss but disputes the amount of the loss, it becomes a question for an appraisal panel to resolve).
First Call also argues that the appraisal provision does not apply because the policy distinguishes between physical property damage and mitigation services by placing them in different subsections, and the appraisal provision only mentions physical property damage in a sub-subsection requiring a "description of each item of damaged property in dispute." Again, First Call improperly reads words and clauses in isolation. The appraisal provision is a stand-alone clause that applies whenever the parties disagree about the amount of a covered loss. If damaged property is in dispute, then it needs to be described. But sub-subsection 2.a. of the policy does not say or even imply that those disputes are the only type that are subject to appraisal; "any" dispute that results from the covered cause of loss is subject to appraisal.
First Call then argues that mitigation services are not subject to appraisal because it is impossible to assign a "replacement cost value and corresponding actual cash value" to such services, reasoning that only "tangible assets" are subject to "depreciation." We reject that argument as well. Although an award must include those values if damaged items are in dispute, nothing in sub-subsection 2.f. suggests that those disputes are the only type that are subject to appraisal. Citizens admitted coverage and properly invoked the appraisal provision to resolve a dispute about the amount of the covered loss. And First Call's argument that only tangible assets can be depreciated lacks merit. See Goff v. State Farm Ins. Co. , 999 So. 2d 684, 690 (Fla. 2d DCA 2008) (holding that profit and overhead are subject to depreciation).
Last, First Call argues that mitigation services are not subject to appraisal because it is impossible to reconcile the appraisal provision's requirement that the panel be given a chance to inspect the damaged property with the insured's duty to mitigate damages on an emergency basis. By the time the panel might inspect the damage, the work has already been completed. However, nothing in the policy suggests that the damaged property must remain in its damaged state for an appraisal to take place, and First Call unreasonably presumes that the panel would have no reason to inspect such property after mitigation has occurred. It also unreasonably presumes that mitigation services would eliminate any trace of damage. Moreover, the policy states that the damaged property must be retained only "to the degree reasonably possible." Thus, it is not an absolute requirement, the policy contemplates unusual circumstances, and it is not impossible to reconcile the two provisions as argued by First Call. See Harris v. Sch. Bd. of Duval Cnty. , 921 So. 2d 725, 733 (Fla. 1st DCA 2006) (reaffirming that courts should try to reconcile contract clauses that may appear to conflict, and an ambiguity exists only when "a contract contains mutually repugnant clauses").
Contrary to First Call's contention, the policy's structure as a whole also shows that mitigation services are subject to appraisal. The policy has two sections: Section I deals with property coverage, and Section II deals with liability coverage. Coverage for emergency measures is included under Section I. Each section has its own set of conditions, but only Section I's conditions include an appraisal provision. Thus, reading the sections in context and the policy as a whole, Section I's conditions apply to coverages in Section I, and Section II's conditions apply to coverages in Section II. Because the coverage that pays for mitigation services is in Section I and appraisal is a condition of Section I, mitigation services are subject to appraisal.
C.
Next, First Call relies on two letters that Citizens wrote to other policyholders involving different claims to show that First Call's interpretation here is reasonable. But as discussed above, the plain language of the policy is clear and unambiguous in its terms, and the policy's structure reinforces those terms. Thus, these letters cannot "be relied upon to ‘explain’ an agreement which, by its terms, required no explanation." Univ. of Miami v. Francois , 76 So. 3d 360, 366 (Fla. 3d DCA 2011) (holding that similar documents "did not serve to explain an ambiguity but instead created an ambiguity which would not otherwise exist"). Also, the letters were not between Citizens and the Rhodes or First Call, and the policy includes a merger clause stating the policy embodies all their agreements related to the policy. The letters therefore do nothing to show the intent of the parties in this case. See Jenkins v. Eckerd Corp. , 913 So. 2d 43, 53–54 (Fla. 1st DCA 2005) (holding that the plaintiff could not rely on a lease between the defendant and a different business to show the intent of the parties in the case under consideration when the disputed provision was not unclear or incomplete, particularly when the parties’ agreement included a merger clause).
Even if the letters were considered on their merits, they fail to support First Call's argument. Both letters show that there was no dispute yet in either case that would warrant appraisal. One might arise if more information was provided by the policyholders, but it was not to that point when the letters were written. By contrast here, there is a dispute over the amount of the loss that should be resolved by appraisal.
D.
For its third issue, First Call argues that mitigation services are not subject to appraisal because the "Reasonable Emergency Measures" clause states that Citizens "will pay" for reasonable and necessary costs incurred by a policyholder, rather than saying, "we will pay or appraise" such costs. Thus, according to First Call, the policyholders never agreed to submit the issue of whether those costs were reasonable and necessary to appraisal.
When interpreting an agreement, "[c]ourts are not to isolate a single term or group of words and read that part in isolation; the goal is to arrive at a reasonable interpretation of the text of the entire agreement to accomplish its stated meaning and purpose." Delissio v. Delissio , 821 So. 2d 350, 353 (Fla. 1st DCA 2002). Yet here again, First Call focuses on three words to the exclusion of the rest of the sentence, the overall provision, and the policy as a whole.
The emergency measures clause is in the first part of Section I, labeled "PROPERTY COVERAGES", and the appraisal provision is in the fourth part of Section I, labeled "CONDITIONS." The clause states that Citizens will pay for "reasonable and necessary costs incurred by the policyholder," not just any costs. The appraisal process is a method for determining which costs are reasonable and necessary. The emergency measures provision need not mention the appraisal provision because, as discussed above, the appraisal provision is a stand-alone clause that applies whenever the parties disagree about the amount of a covered loss.
In turn, First Call argues that it is impossible for an appraisal panel to arrive at a number for what is due under the policy because there is always a range of amounts that might be reasonable depending on multiple variables. But those variables are what the appraisal process is designed to consider when determining what value (or whether the value an invoice charged) is reasonable. Under First Call's interpretation, no finder of fact—not a jury, judge, arbitrator, or appraiser—could ever set a number. We also reject First Call's suggestion that a service provider can unilaterally determine what is reasonable and necessary, even if it is a patently excessive amount. "A true ambiguity does not exist merely because a contract can possibly be interpreted in more than one manner. Indeed, fanciful, inconsistent, and absurd interpretations of plain language are always possible. It is the duty of the trial courts to prevent such interpretations." Am. Med. Int'l, Inc., v. Scheller , 462 So. 2d 1, 7 (Fla. 4th DCA 1984).
III.
Reading the insurance policy as a whole, considering its overall structure, and giving the appraisal provision its plain meaning, we conclude that the provision is unambiguous and applies to the mitigation services at issue. In reaching our decision, we align ourselves with the holdings of our sister courts in Express Damage Restoration, LLC v. Citizens Property Insurance Corporation , 320 So. 3d 305, 308 (Fla. 3d DCA 2021), and First Call 24/7 v. Citizens Property Insurance Corporation , 330 So.3d 934, 936 (Fla. 4th DCA Nov. 10, 2021). We reject First Call's remaining arguments on appeal without further comment and affirm the judgment below.
AFFIRMED .
Osterhaus and Nordby, JJ., concur.