Warfel v. Universal: The Case of the Vanishing Evidentiary Presumption of Fla. Stat. § 627.7073

Authors: Judd Goodall and Christopher Borzell

The Florida Legislature has mandated that under certain circumstances, an insurance company is required to engage a licensed Professional Engineer or Professional Geologist to conduct sinkhole testing as provided in Fla. Stat. § 627.7072 and in accordance with § 627.7073[FN1]. As insurance companies do not typically have Professional Engineers or Geologists on staff, the carriers rely upon the findings and recommendations of these professionals when the carriers make their claims decisions[FN2]. If an insurance company denies a sinkhole claim based on the professional opinions of engineers or geologists, then the carrier should not be held liable on a breach of contract claim as long as its reliance upon the engineer of record and the subsequent denial were both in good faith. The legislature clearly contemplated this when it enacted § 627.7073 in 2005:

§ 627.7073(1)(c) The respective findings, opinions, and recommendations of the engineer and professional geologist as to the verification or elimination of a sinkhole loss and the findings, opinions, and recommendations of the engineer as to land and building stabilization and foundation repair shall be presumed correct. (2005)

After all, it really seems to be a matter of common sense…how could an insurance company be liable in a breach of contract action when it made a good faith denial based upon professional opinions of engineers and geologists, as is required by law pursuant to Florida Statutes? This was challenged at the conclusion of trial in Pasco County Florida and the issue made its way to the Florida Supreme Court. The Court’s analysis, in Universal Insurance Company of North America v. Warfel,[FN3] focused heavily on the Florida Evidence Code[FN4] as it applies to litigation. However, more focus should have been placed on timing, i.e., at the time of the claims decision, the report “shall be presumed correct,” thereby providing a statutory protection to the insurance company should it be sued in a breach of contract claim based upon the carrier’s reliance upon the “recommendations of the engineer.”

One response

  1. Pingback: New Concerns About Florida Home Insurance Companies | Insurance 800

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