Florida Appellate Court Orders New Trial in Home Insurance Policy Coverage Dispute

In the recent case of Prepared Insurance Company v. Gal, the plaintiff appealed a lower court’s decision regarding a real estate contract and the liabilities associated with it. The insured was a homeowner who discovered that his kitchen sink leaked water, which caused damage to his custom-made cabinets. The insured filed a claim with the insurance company, which sent an adjuster to assess the damage. The report concluded that the cost to fix the cabinets would be $8,653.47, but this estimate did not include the general contractor’s overhead and profit.

A cabinetry expert also assessed the damage at the request of the insurer. He concluded that it would cost roughly $2,500 to fix the damage or almost $20,000 to replace the cabinets.  This cost estimate did not include the price of an electrician or plumber, who would both be necessary to finish the job. It also omitted the estimated cost for hiring a general contractor.

The insurance company tendered payment for $6,153.47 to the insured, reflecting an $8,653.27 cost less the insured’s deductible. The insured sued, claiming the insurer undervalued the damage because it did not pay for the replacement of the cabinets or the cost of a general contractor. In the meantime, the insured filed another claim for damage to the cabinets caused by a leaking air conditioner unit. The insured had a general contractor inspect the loss. This expert testified that the replacement of the cabinets would cost $107,902.50, due to their unique nature. This estimate failed to apportion the damage between the first leak and the second leak.

After trial, the jury awarded $44,304.85 to the insured. The insurer appealed on four issues:

  1. Whether a replacement cost homeowners’ policy requires an insurer to replace damaged property, as a matter of law, or whether the insurer may limit its liability and repair the property;
  2. Whether the trial court correctly determined the insured was entitled to summary judgment on the issue of liability because the insurer failed to pay a general contractor’s overhead and profit;
  3. Whether the trial court abused its discretion in striking all of the insurer’s witnesses because they were not
    general contractors; and
  4. Whether the trial court abused its discretion when the court prohibited the insurer from cross-examining the insured’s expert as to matters that may have affected the witness’ opinion.

The appellate court agreed with the insurer’s position on all four issues. According to the justices, the insurer should have had a chance to argue during trial that it could repair the cabinets and that it was not necessary to retain a general contractor. Additionally, testimony from the insurer’s witnesses regarding the scope of the damage and necessary repairs was improperly excluded from trial. Finally, the insurer should have been provided with an opportunity to cross-examine the insured’s experts regarding the basis of his opinion. As a result of these errors, the appellate court reversed the verdict and ordered a new trial.

If you are dealing with a real estate dispute, the dedicated contract lawyers at Lusk, Drasites & Tolisano are standing by to assist you. We understand how stressful it can be to deal with a hotly contested issue regarding your home or other property. Serving clients throughout Southwest Florida, including in Fort Myers, Naples, and Cape Coral, we offer a free consultation to help you learn about your legal options and how we may be able to assist you with seeking the compensation you deserve. Call us now at 1-800-283-7442 or contact us online.

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