A ruling from Florida’s Fourth District Court of Appeal reiterates a key principle.
The appellate panel reversed the lower court decision to award damages under an insurance policy to the assignee of policyholder Michele Baoberg, since the homeowner failed to comply with a preferred-contractor endorsement in the insurance policy.
Baoberg had water damage to her home. Her insurance policy with appellant People’s Trust Insurance Co. allegedly contained a preferred contractor endorsement, the ruling stated.
Once the homeowner notified People’s Trust of the damage, and they inspected, the insurer advised the homeowner that coverage existed for the claim. The company also advised it would use its preferred contractor to complete repairs.
But the homeowner used appellee First Call 24/7 Inc. to make the repairs.
People’s Trust allegedly paid $6,800 to First Call for emergency services. People’s Trust requested the homeowner complete a work authorization for the remaining repairs, so that its preferred contractor could commence restoration.
“The homeowner never authorized the work, and People’s Trust told her that she was in breach of the insurance contract,” according to the ruling.
First Call submitted an invoice to People’s Trust for $19,863.96 for restoration services. People’s Trust did not pay, so First Call brought suit as the assignee of the homeowner, according to the ruling.
Both sides filed motions for summary judgment. The trial court denied the insurer’s motion and granted First Call’s, entering judgment for $10,988.02.
The panel cited the People’s Tr. Ins. Co. v. Tosar ruling, where Florida’s Third District Court of Appeal found that People’s Trust was not at fault, because it had notified the homeowner about the repairs in a timely fashion, and elected to use its preferred contractor to do the repairs, as allowed in the policy.
Since the homeowner in the latest case had failed to execute the work authorization in spite of three requests by People’s Trust, the court found that to be a material breach of the policy, the ruling stated.
People’s Trust’s liability applies only when the insured fails to inform People’s Trust prior to permit work and this failure to notify acts to disallow the company from the repair process.
As with Tosar, Fourth DCA Judge Robert Gross, Chief Judge Burton C. Conner and Judge Melanie G. May found First Call did not allege nor offer evidence that People’s Trust improperly exercised the right to repair, or that the endorsement was otherwise invalid.
Instead, the homeowner had breached the policy by failing to give the authorization form, and had avoided the explicit terms of the policy by hiring First Call to perform the non-emergency repairs.
Therefore, the court reversed the money judgment in favor of First Call, and remanded for entry of final judgment in favor of People’s Trust.
