The policy stated, "We insure against risk of direct loss to property...only if that loss is a physical loss to property." The loss settlement provision stated, "We will initially pay at least the actual cash value of the insured loss, less any applicable deductible. We will then pay any remaining amounts necessary to perform such repairs as work is performed and expenses incurred."

The trial court granted the motion in favor of the insurer, ruling that ACV does not include the matching cost, and Citizens was only initially required to pay the ACV of property that sustained physical loss. It is important to note that the court did not exclude matching costs, rather, they are to be paid as a remaining amount as work is performed.

Court of Appeal

Vazquez appealed to the Florida Third District Court of Appeal. The court also looked to the insurance policy and Florida statutes. The policy, quoted above, explicitly covers direct loss to property if the loss is physical.

The court previously determined in Homeowners Choice Prop. & Cas. v. Maspons, that loss means the diminution of value of something, like the insureds' house or personal property, and 'direct' and 'physical' modify the meaning to require that the damage be actual. The court found that this was consistent with the trial court's ruling that the initial ACV payment was only for the damaged property.

Vazquez argued that the Florida Supreme Court's definition in Trinidad v. Fla. Peninsula Ins. Co., stated that actual cash value means "replacement cost minus normal depreciation," and argued that matching costs were necessary replacement costs.

The court rejected the argument, stating that the case did not discuss matching costs and that in 2008, when the case took place, the statute was different from its current form.

Fla. Stat. Ann. § 627.7011 currently states, "In the event of a loss for which a dwelling or personal property is insured on the basis of replacement costs: (a) The insurer shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred."

The court also pointed to the state's matching statute, Fla. Stat. Ann. § 626.9744, "Unless otherwise provided by the policy, when a homeowner's insurance policy provides for the adjustment and settlement of first-party losses based on repair or replacement cost, the following requirements apply... (2) When a loss requires replacement of items and the replaced items do not match in quality, color, or size, the insurer shall make reasonable repairs or replacement of items in adjoining areas...".

The court found that the statute "clearly defers to the policy as controlling." The court determined that the trial court adhered to the plain language of the policy and Florida law and affirmed their granting the motion in limine.

Editor's Note:

A motion in limine is a pretrial motion seeking to exclude specific evidence from being presented during the trial to address potentially prejudicial, irrelevant, or inadmissible information that could influence a jury or hinder the administration of justice.

It is important to note that the ruling did not preclude the insured from recovering matching costs. As we can see from the quoted statutes, Florida allows for reasonable repair or replacement of undamaged items. However, those statutes have changed since the case was originally filed.

Related articles:

Matching by State - Cases, Regulations, and Department Bulletins

The Issue of Matching

State Court Says Absence of Definition for "Like Kind and Quality" Requires Matching