Fact-finding required prior to insured submitting to insurer's appraisal demand.

The insured's home was severly damaged by Hurricane Charley in August 2004. State Farm accepted the claim and acknowledged coverage. A dispute arose concerning benefits under the Building Ordinance or Law Coverage Endorsement. State Farm then demanded appraisal of the insured's claim pursuant to the policy language. The insured responded by filing suit seeking a determination of whether appraisal was required and breach of contract. In lieu of an answer, State Farm filed a motion to dismiss, a motion for protective order and a motion for summary judgment, alleging that because the insured failed to submit to an appraisal to determine the amount of the loss, she failed to comply with her contractual obligations. The trial court granted State Farm's motion for summary judgment. The court of appeals reversed, holding that a genuine issue of material fact existed regarding whether there was a dispute in the amount of loss or a denial of coverage. Thus, a trial court must resolve factual issues such as these prior to requiring an insured to submit to appraisal.

Case Law Alert - 2nd Qtr 2012