The Third District Court of Appeal has affirmed an earlier decision that granted an insurer a new trial in a case involving a first-party breach of a homeowner's insurance contract claim alleging water losses at the plaintiff's home that occurred only days apart. The case is Nunez v. Universal Prop. & Cas. Ins. Co., 2021 Fla. App. LEXIS 3487 (Fla. Dist. Ct. App. 2021).
In 2015 the insured, Celerina Nunez filed two insurance claims with her insurer, Universal Property & Casualty Insurance Company. The two claims were associated with two water losses occurring days apart: one was caused by a leak in the kitchen and the other caused by a leak in the bathroom. On the day these claims were reported, Universal asked Nunez to provide a sworn proof of loss. 75 days later, Nunez provided the sworn proof of loss, claiming $30,000 of damage to the kitchen and $20,000 to the bathroom. In the interim, the property was inspected and Nunez provided an unsworn statement by phone to Universal.
During the claims investigation, Universal asked Nunez to attend an Examination Under Oath (EUO), to which Nunez failed to appear. Universal also sent two letters to Nunez's attorney asking to set a date for the EUO. Counsel failed to respond, so Universal sent a third letter unilaterally scheduling the EUO for October 1. Nunez failed to appear for the EUO and Universal denied both insurance claims based upon the failure to appear, and the failure to provide some other documentation. Nunez sued Universal for breach of contract. Universal moved for summary judgment, arguing that the failure to attend the EUO was a material breach of the insurance contract which precluded recovery under the policy. The trial court denied this motion.
During the initial trial, the main issue in question was Nunez's compliance with her post-loss obligations prior to the lawsuit. Nunez argued that it was unreasonable for Universal to request an EUO 110 days after the claims were reported. Universal argued that, because Nunez had failed to attend the EUO, she forfeited her rights to receive insurance benefits. Universal also argued that since it did not receive Nunez's Sworn Proof of Loss until seventy-five days after the claim was reported, the request for an EUO was not unreasonable. Twice more, Universal moved for a directed verdict on the failure to attend the EUO, and both attempts were denied by the trial court.
Universal then moved for a renewed motion for directed verdict, or motion for a new trial, arguing that the case should have been found in it's favor because the plaintiff failed to comply with a condition precedent to filing suit, and had materially breached the terms and conditions of the contract by failing to appear for the EUO. Universal also argued that the jury instructions and verdict forms were contrary to Florida law and went against the weight of the evidence. A successor judge granted a new trial and a directed verdict in Universal's favor when considering whether Nunez breached her insurance contract by failing to appear for the EUO. Nunez appealed the trial court's ruling.
The Third DCA ruled that the successor judge correctly granted the motion for a new trial, but erred in directing a verdict as to whether Nunez had materially breached the contract where the jury was never instructed on the issue. The jury was instructed to consider whether Universal proved by the greater weight of the evidence that Nunez unreasonably failed to attend her EUO, and whether Nunez proved by a greater weight of evidence that she sustained covered losses, and then the burden was on universal to prove that Nunez failed to comply with her obligations under the policy. But, neither the jury instructions nor the verdict form instructed the jury to consider "whether in light of the evidence presented, Universal established that Nunez materially breached the contract by failing to appear for her EUO."
The Appellate Court remanded the case for a new trial on whether Nunez materially breached the insurance policy by failing to attend her EUO.
ICLC talked to Alison J. Trejo, a partner at Kelley Kronenberg, who represented Universal at trial. Allison noted that the main issue at the trial court level was Plaintiff's compliance with her post-loss obligations prior to her lawsuit, specifically the condition precedent to sit for an examination under oath. Trejo also noted that this case may have repercussions in the insurance world. "Consistent with its holding in American Integrity Insurance Co. v. Estrada, 276 So. 3d 905 (Fla. 3d DCA 2019), the Appellate court remanded the case for a new trial on whether Plaintiff materially breached the insurance policy by failing to attend her EUO. The DCA continues to uphold policy conditions and thereby conditions precedent to filing suit."
American Integrity Insurance Co. v. Estrada was decided the day before the hearing on the renewed motion for directed verdict. The successor judge, in this case, determined that the fairer approach would be to grant a new trial "under the construct" of Estrada.
Alison J. Trejo is a Partner in Kelley Kronenberg's Fort Lauderdale office, focusing her practice on First Party Property Insurance Defense Litigation.