IN THE SUPREME COURT OF FLORIDA CASE NO. SC ANDREW MCKEE, Petitioner, vs. JURISDICTIONAL ANSWER BRIEF TOWER HILL SELECT INSURANCE COMPANY

Transcription

1 Filing # E-Filed 01/20/ :24:06 PM IN THE SUPREME COURT OF FLORIDA CASE NO. SC ANDREW MCKEE, Petitioner, vs. TOWER HILL SELECT INSURANCE COMPANY, RECEIVED, 01/20/ :28:38 PM, Clerk, Supreme Court Respondent. JURISDICTIONAL ANSWER BRIEF OF TOWER HILL SELECT INSURANCE COMPANY On Notice to Invoke Jurisdiction from the Second District Court of Appeal, Case No.: 2D BUTLER PAPPAS WEIHMULLER KATZ CRAIG LLP ANTHONY J. RUSSO, ESQ. Florida Bar No.: JARED M. KRUKAR, ESQ. Florida Bar No.: S. Harbour Island Blvd., Suite 500 Tampa, FL Attorneys for Tower Hill Select Insurance Company

2 TABLE OF CONTENTS TABLE OF AUTHORITIES... ii STATEMENT OF THE CASE AND FACTS... 1 SUMMARY OF THE ARGUMENT... 2 ARGUMENT... 3 I. The district court s decision does not expressly and directly conflict with this Court s decision in Warfel II. A. There is no express and direct conflict because the procedural posture, facts, issues, and holdings are not the same as in Warfel B. McKee misconstrues Warfel in an attempt to create conflict with McKee C. The McKee opinion says nothing about the confession of judgment doctrine, or whether McKee was forced to file suit This Court should not exercise its discretion to review this case because the Second District reached the correct result on the question presented CONCLUSION... 9 CERTIFICATE OF SERVICE...11 CERTIFICATE OF TYPE SIZE & STYLE...12 i

3 TABLE OF AUTHORITIES CASES Aravena v. Miami-Dade Cnty., 928 So. 2d 1163 (Fla. 2006)... 3 Dept. of Health & Rehab. Servs. v. Nat l Adoption Counseling Serv., Inc., 498 So. 2d 888 (Fla. 1986)... 7 Nielsen v. City of Sarasota, 117 So. 2d 731 (Fla. 1960)... 4 Persaud v. State, 838 So. 2d 529 (Fla. 2003)... 7 Reaves v. State, 485 So. 2d 829 (Fla. 1986)...6, 7 State Farm Florida Ins. Co. v. Phillips, 134 So. 3d 505 (Fla. 5th DCA 2014)...8, 9 Tower Hill Ins. Co. v. McKee, 151 So. 3d 2 (Fla. 2d DCA 2014)... passim Universal Insurance Company of North America v. Warfel, 82 So. 3d 47 (2012)...2, 4 Warfel v. Universal Ins. Co. of N. Am., 36 So. 3d 136 (Fla. 2d DCA 2010)... passim Wollard v. Lloyd s, 439 So. 2d 217 (Fla. 1983)... 6 STATUTES , Fla. Stat (5)(a), Fla. Stat (5)(b), Fla. Stat.... 2, 3, 8, (5)(b), Fla. Stat. (2010) (1)(c), Fla. Stat....2, , Fla. Stat. (2014) (15)(a)(b), Fla. Stat ii

4 Fla. Stat. Ann OTHER AUTHORITIES The Operation and Jurisdiction of the Supreme Court of Florida, 29 Nova L. Rev. 431 (2005)... 6 RULES Fla. R. App. P (a)(2)(A)(iv)... 3 CONSTITUTIONAL PROVISIONS Art. 5, 3(b)(3), Fla. Const iii

5 STATEMENT OF THE CASE AND FACTS Petitioner, Andrew McKee, filed a claim for sinkhole loss with his property insurer, Tower Hill. Tower Hill Ins. Co. v. McKee, 151 So. 3d 2, 3 (Fla. 2d DCA 2014). Tower Hill designated an engineer who determined there was no evidence of a sinkhole. Id. Tower Hill then denied the claim. Id. McKee then hired his own private engineer. Id. That engineer concluded that McKee s damage was caused by a sinkhole. Id. McKee provided the report to Tower Hill, then sued Tower Hill for breach of contract, without ever having entered a contract for subsurface repairs. Id. The trial court entered a final summary judgment for McKee. Id. The judgment included an award for subsurface repairs, and prejudgment interest on that award. Id. at 3-4. Tower Hill appealed. Id. at 3. On appeal, Tower Hill argued that no cause of action existed at the time McKee filed his lawsuit. Id. at 3. The appellate court rejected Tower Hill s argument, citing Warfel v. Universal Ins. Co. of N. Am., 36 So. 3d 136 (Fla. 2d DCA 2010), approved, 82 So. 3d 47 (Fla. 2012). Id. at 3-4. The court ruled there was a valid dispute as to the existence of a covered loss under the insurance policy when McKee filed suit. Id. at 4. The court held, The policy provisions containing conditions precedent to suit that Tower Hill relies on in its appellate briefs were only relevant to a situation where Tower Hill admitted liability and a dispute as to 1

6 the amount of recovery arose. Id. Therefore, those provisions did not bar suit entirely. Id. However, the appellate court agreed with Tower Hill that the trial court should not have ordered Tower Hill to pay for subsurface repairs until McKee entered into a contract for those repairs. Id. at 4. The appellate court relied on the loss settlement provision of the insurance contract which track[ed] the language of section (5)(b), providing Tower Hill the authority to withhold payment for subsurface repairs until McKee entered into a contract for those repairs. Id. Thus, the appellate court reversed the portions of the final judgment requiring Tower Hill to pay for subsurface repairs, and the award of prejudgment interest based upon the award of subsurface repairs. Id. SUMMARY OF THE ARGUMENT The Second District s decision does not conflict with Universal Insurance Company of North America v. Warfel, 82 So. 3d 47 (2012). The central question in Warfel was whether the burden shifting presumption articulated in section of the Florida Evidence Code applies to the presumption provided in section (1)(c). Id. at 51. The Second District s decision does not address this issue, and the facts are unrelated to this issue. Thus, there is no express and direct conflict on the same question of law, such that there could be conflict jurisdiction. Assuming conflict jurisdiction existed (which it does not), 2

7 this Court should not exercise that jurisdiction because the portions of the Second District s decision for which McKee seeks review were correct. ARGUMENT McKee s alleged basis for jurisdiction is express and direct conflict with this Court s decision in Warfel. To demonstrate such a conflict, he must show that the district court s decision expressly and directly conflicts with a decision... of the supreme court on the same question of law. Art. 5, 3(b)(3), Fla. Const. In other words, the holdings of the decisions must be irreconcilable. Aravena v. Miami- Dade Cnty., 928 So. 2d 1163, 1166 (Fla. 2006). There must be an actual conflict of controlling, binding precedent. Moreover, this Court s conflict jurisdiction is discretionary. See Fla. R. App. P (a)(2)(A)(iv). Therefore, this Court must decide not only whether conflict exists but, if so, whether to review the case. I. The district court s decision does not expressly and directly conflict with this Court s decision in Warfel. A. There is no express and direct conflict because the procedural posture, facts, issues, and holdings are not the same as in Warfel. The Second District s ruling that McKee places at issue here is this: An insurance policy that contains a provision based on section (5)(b) authorizes an insurance company to withhold payment for subsurface repair until a policyholder provides a signed contract for that repair, regardless of whether a lawsuit has been filed. McKee, 151 So. 3d at 4. By contrast, the holding from 3

8 Warfel is this: The presumption established by section (1)(c) does not shift the evidentiary burden of proof at trial. 82 So. 3d at The McKee case was decided on summary judgment, so evidentiary burdens at trial were not an issue in the McKee case. McKee, 151 So 3d at 3. Therefore, the Second District s decision did not announce a rule of law which conflicts with a rule previously announced by this Court in Warfel. Nielsen v. City of Sarasota, 117 So. 2d 731, 734 (Fla. 1960). Beyond the fact that both Warfel and McKee are sinkhole disputes, the controlling facts and procedural postures of the two cases are entirely dissimilar. Warfel resolved an evidentiary issue arising at trial based on application of language of section (1)(c). 82 So. 3d at McKee arose from a summary judgment based on application of policy language authorized by section (5)(b). McKee, 151 So. 3d at 3-4. The two cases addressed different statutes. There is no express and direct conflict because the Second District did not apply a rule of law to produce a different result in a case which involves substantially the same controlling facts as a prior case disposed by this Court.... Nielsen, 117 So. 2d at 734 (emphasis added). B. McKee misconstrues Warfel in an attempt to create conflict with McKee. McKee isolates a single statement from the Warfel opinion sinkhole statutes do not apply to the litigation context and attempts to extrapolate a broad 4

9 rule from that statement that the sinkhole statutes are rendered inapplicable once the policyholder files a lawsuit. McKee s generalization is incorrect. This Court explained in Warfel that the sinkhole statutes do not apply to the evidentiary context of a trial. Preliminarily, we note that nothing in the sinkhole claim process statutory scheme, as it appeared in 2005, applies that scheme in the litigation context. The sinkhole statutes appear in chapter 627, titled Insurance Rates and Contracts, specifically in Part X, titled Property Insurance Contracts. That chapter was designed to provide a framework for insurance companies to follow when encountering specific types of claims, in this case claims involving sinkhole damage. The application of a specific provision within that scheme to the evidentiary context is both misguided and inappropriate. Warfel, 82 So. 3d at 57 (emphasis added). This Court went on: Accordingly, because the sinkhole statutes do not apply to the litigation context, the trial court's application of section to section (1)(c) and the treatment of this statute as evidentiary in nature in this case was incorrect. Id. at (emphasis added). Contrary to McKee s argument, this Court did not say in Warfel that all sinkhole statutes are rendered wholly inapplicable once the policyholder files a lawsuit. 1 Nor did this Court state that a contractual limitation on the recovery of proceeds to repair the foundation, a limitation authorized by the legislature in 1 For example, one may still request neutral evaluation a creation of a sinkhole statute after a lawsuit has been filed, and the operation of the statute stays the pending litigation , Fla. Stat. (2014). Recoverable fees, in the sinkhole litigation content, are regulated by section (15)(a), (b). 5

10 section (5)(a), becomes null once the policyholder files a lawsuit. Warfel says nothing about the continuing contractual rights and duties of the parties once the policyholder files a lawsuit. C. The McKee opinion says nothing about the confession of judgment doctrine, or whether McKee was forced to file suit. McKee appears to attempt to create conflict on the issue of attorney fees. In determining whether conflict jurisdiction exists, this Court is constrained by the four corners rule to consider only facts and holdings contained within the appellate court s opinion. Reaves v. State, 485 So. 2d 829, 830 n. 3 (Fla. 1986). There can be no examination of the record, no second-guessing of the facts stated in the majority decision, and no use of extrinsic materials to clarify what the majority decision means. Harry Lee Anstead et. al., The Operation and Jurisdiction of the Supreme Court of Florida, 29 Nova L. Rev. 431 (2005). McKee states, without basis, that the Second District concluded that [Tower Hill] confessed judgment, and that the Second District necessarily determined that Tower Hill confessed judgment. (Pet. Br. 3, 5.) But the Second District s opinion contains no such conclusion or determination. The McKee opinion never once mentions the confession of judgment doctrine, nor does it identify any post-suit payment that may constitute a confession of judgment. See Wollard v. Lloyd s, 439 So. 2d 217 (Fla. 1983). Consequently, no conflict (and thus no conflict jurisdiction) can exist based on the application of the confession 6

11 of judgment doctrine. Persaud v. State, 838 So. 2d 529, (Fla. 2003). To the extent McKee s statement is argument of implied or inherent conflict, no such conflict can form the basis for supreme court review because it violates the express and direct requirement. See Dept. of Health & Rehab. Servs. v. Nat l Adoption Counseling Serv., Inc., 498 So. 2d 888, 889 (Fla. 1986). McKee also states, without basis, The Second District determined that McKee was obligated to initiate this litigation with Tower Hill. (Pet. Br. 3, 5.) The Second District s opinion contains no such determination, and therefore it cannot support this Court s jurisdiction. Reaves, 485 So. 2d at 830 n. 3. In sum, the issue of attorneys fees cannot be used to create conflict jurisdiction here. McKee ignores the Second District s order on rehearing, which he attached to his notice of intent to invoke discretionary jurisdiction. The Second District there clarif[ied] that our opinion did not reach the issue of attorney fees. 2 McKee, 151 So. 3d at 4. McKee s attempt to place the fee issue before this Court, an issue upon which the Second District expressly declined to rule, should be rejected, as there is no ruling upon which to find conflict. 2 McKee attached to his notice to invoke the discretionary jurisdiction of this Court, and because the Second District said it was to clarify our opinion, it is properly within the four corners of the majority decision. Persaud v. State, 838 So. 2d 529, (Fla. 2003). 7

12 II. This Court should not exercise its discretion to review this case because the Second District reached the correct result on the question presented. The Second District held that because the policy language in this case tracked the language of section (5)(b), Florida Statutes (2010), Tower Hill was authorized to withhold payment for subsurface repairs until McKee entered into a contract for those repairs. McKee, 151 So. 3d at 4. The court also held that McKee fail[ed] to enter into a contract for subsurface repairs, which was a factor outside Tower Hill s control. Id. Consequently, under the plain language of section (5)(b) and the insurance contract at issue, the Second District correctly held that McKee was not entitled to payment for subsurface repairs at the time the court entered judgment. This ruling is consistent with the Fifth District s holding in State Farm Florida Ins. Co. v. Phillips, 134 So. 3d 505 (Fla. 5th DCA 2014). McKee argues that the Second District should not have relied on Phillips, and that Phillips does not apply in this case. 3 (Pet. Br. 6.) McKee attempts to distinguish Phillips on an irrelevant point of fact that is both dubious and not apparent on the face of the opinions. Both McKee and Phillips involved (1) an insurance company withholding payments pursuant to a policy provision that incorporated section (5)(b); (2) a policyholder s refusal to provide a contract for subsurface repairs; and (3) a lawsuit. Phillips, 134 So. 3d at Notably, McKee does not allege any conflict regarding the Phillips case. 8

13 Both cases affirmed, in part, and reversed, in part, a judgment against the insurer. Both courts reversed that portion of the respective judgments that required the insurer to pay for subsurface repairs before the policyholder entered into a contract for those subsurface repairs. McKee, 151 So. 3d at 4; Phillips,134 So. 3d at 509. McKee claims that the insurer in Phillips did not breach the insurance contract, but nothing in the Phillips opinion supports that statement. The fact that the Phillips court partially affirmed a judgment against the insurer in that case would suggest the opposite. The Second District properly cited to Phillips. CONCLUSION There is no conflict between the Second District s McKee opinion and this Court s Warfel decision. Therefore, this Court does not have discretionary jurisdiction to review this case. Even if discretionary jurisdiction existed, there is no good reason to exercise its discretion. Section (5)(b) clearly states an insurer may include language in the insurance contract allowing it to withhold payment for subsurface repairs in a sinkhole claim until a signed contract to perform those repairs is presented. Two district courts the Second District in this case and the Fifth District in Phillips have held that the insurer s rights under this contractual language survive the filing of a lawsuit. No authority suggests otherwise. This Court should deny McKee s petition. 9

14 BUTLER PAPPAS WEIHMULLER KATZ CRAIG LLP /S/ Anthony J. Russo ANTHONY J. RUSSO, ESQ. Florida Bar No.: JARED M. KRUKAR, ESQ. Florida Bar No.: S. Harbour Island Blvd., Suite 500 Tampa, FL Telephone: (813) Facsimile: (813) Attorneys for Tower Hill Select Insurance Company 10

15 CERTIFICATE OF SERVICE I CERTIFY that a copy of the foregoing has been served to the following via on January 20, Robert E. Biasotti, Esq. Christine R. O Shea, Esq. Biasotti and Associates Biasotti Mediation Center 5999 Central Avenue, Suite 303 St. Petersburg, FL bob@biasottilaw.com christine@biasottilaw.com Amy Deruelle Boggs, Esq. The Law Office of Amy Boggs, PA 4554 Central Avenue, Suite L St. Petersburg, Florida Boggs-pleadings@amyboggslaw.com /S/ Jared M. Krukar JARED M. KRUKAR, ESQ. 11

16 CERTIFICATE OF TYPE SIZE & STYLE I certify that the type, size, and style utilized in this Brief is14 point Times New Roman. /S/ Jared M. Krukar JARED M. KRUKAR, ESQ. 12