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Castro v. Homeowners Choice Property & Casualty Insurance Co.

Florida Court of Appeals, Second District

August 23, 2017



         Appeal from the Circuit Court for Pinellas County; Jack R. St. Arnold, Judge.

          Aaron S. Kling of Smith, Kling & Thompson, P.A., Tampa, for Appellants.

          Andrew A. Labbe and Jonathan T. Hall of Groelle & Salmon, P.A., Tampa, for Appellee.

          SLEET, Judge.

         Juan Castro and Myriam Lopez appeal the final summary judgment in favor of their insurance company, Homeowners Choice Property & Casualty Insurance Company, in this breach of contract action. Because Homeowners Choice denied coverage of their claim, Castro and Lopez's subsequent failure to comply with the insurance policy's conditions did not act as a bar to their filing suit, and we must reverse.

         This case involves a dispute between Castro and Lopez and Homeowners Choice about whether the damage to their property was caused by sinkhole activity. On May 4, 2010, Castro and Lopez noticed damage to their home that appeared to be caused by sinkhole activity. They filed a notice of claim with Homeowners Choice. On June 15, 2010, Homeowners Choice retained SDI Engineering to conduct a sinkhole investigation. SDI did not find any evidence of sinkhole activity, and Homeowners Choice denied coverage on July 12, 2010, based on the policy exclusion for damage caused by the movement of the earth beneath the residence. It is undisputed that prior to denial of the claim, Homeowners Choice did not request that either Castro or Lopez submit to an examination under oath (EUO), file a sworn proof of loss, or submit records and documents in accordance with the "Your Duties After Loss" section[1] of their insurance policy. And the denial of coverage letter did not reference the policy provisions addressing their duties after loss or advise of any conditions that needed to be met prior to their filing suit.

         Four years later, Castro and Lopez retained FTE Engineers & Planners, which conducted an investigation and concluded that the damage to the home was caused by sinkhole activity. On November 4, 2014, Castro and Lopez sent letters to Homeowners Choice that included a copy of the FTE report and a request that Homeowners Choice "reconsider" its denial of coverage within fourteen days. Homeowners Choice, through its attorney, replied by faxed letter acknowledging that Castro and Lopez had provided new information and requesting that Castro and Lopez each submit to an EUO, provide a sworn proof of loss, and provide copies of all documentation from FTE. Homeowners Choice did not provide a date, time, or location for the EUOs.

         On December 18, 2014, Castro and Lopez filed suit against Homeowners Choice for breach of insurance contract. On December 30, 2014, Homeowners Choice provided Castro and Lopez with dates for the EUOs. On December 31, 2014, counsel for Homeowners Choice informed Castro and Lopez that filing their lawsuit violated the "Suit Against Us" provision of their policy[2] and demanded that Castro and Lopez withdraw their lawsuit and coordinate the EUOs by January 9, 2015. Castro and Lopez did not withdraw their lawsuit, and the record includes emails between their attorney and counsel for Homeowners Choice that demonstrate an agreement to schedule the EUOs in January 2015. The last email from Castro and Lopez's attorney was dated January 8, 2015, and provided a date and time for the EUOs. There was no response from Homeowners Choice.

         Homeowners Choice filed a motion for summary judgment based upon Castro and Lopez's refusal to comply with its demand for EUOs and the submission of a sworn proof of loss. Homeowners Choice argued that Castro and Lopez's provision of the FTE report along with their request to reconsider the claim constituted a reopening of the claim that allowed it to require Castro and Lopez to comply with the policy's conditions precedent to filing suit. Homeowners Choice contended that Castro and Lopez's refusal to comply with those conditions precedent was therefore a willful and material breach of the insurance contract that precluded recovery under the policy. Homeowners Choice attached an affidavit from a company employee who stated that the claim was reopened because Castro and Lopez provided a new engineering report. Also attached was an affidavit from the chief engineer of SDI, who reaffirmed that there was no sinkhole activity at Castro and Lopez's residence.

         In response, Castro and Lopez asserted that Homeowners Choice waived compliance with the conditions precedent to filing suit when it unequivocally denied coverage. The trial court disagreed and entered final summary judgment in favor of Homeowners Choice without making any findings of fact or conclusions of law. This appeal ensued.

         The standard of review applicable to the granting of a summary judgment motion is de novo. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla. 2000). Summary judgment can only be granted if there is no issue of material fact and the moving party is entitled to a judgment as a matter of law. Id. If there is "the slightest doubt that an issue might exist, that doubt must be resolved against the moving party." Nard, Inc. v. DeVito Contracting & Supply, Inc., 769 So.2d 1138, 1140 (Fla. 2d DCA 2000). Furthermore,

"[a] motion for summary judgment is not a substitute for a trial on the merits." Hervey v. Alfonso, 650 So.2d 644, 646 (Fla. 2d DCA 1995). Therefore, rather than resolving any disputed issues of fact, id., "the court's function is solely to determine whether the record conclusively shows that the moving party proved a negative, that is, 'the nonexistence of a genuine issue of a material fact, ' " Winst ...

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