DISTRICT COURT OF APPEAL FIRST DISTRICT STATE OF FLORIDA. Appellant, Case No.: 1D07-2727 Lower Case No.: 05-CA 4940

CITIZENS PROPERTY INSURANCE CORPORATION, DISTRICT COURT OF APPEAL FIRST DISTRICT STATE OF FLORIDA vs. Appellant, Case No.: 1D07-2727 Lower Case No.: 05-CA 4940 EAST PASS TOWERS II CONDOMINIUM ASSOCIATION, INC. Appellee. / ON APPEAL FROM OKALOOSA COUNTY CIRCUIT COURT FIRST JUDICIAL CIRCUIT ANSWER BRIEF OF APPELLEE, EAST PASS TOWERS II CONDOMINIUM ASSOCIATION, INC. WILLIAM F. MERLIN, JR., ESQ. Florida Bar No: 364721 MARY E. KESTENBAUM, ESQ. Florida Bar No.: 114596 777 So. Harbour Island Blvd., Suite 950 Tampa, FL 33602 Telephone: (813) 229-1000 Facsimile: (813) 229-3692 Attorneys for Appellee

TABLE OF CONTENTS TABLE OF CITATIONS.....ii-iii PRELIMINARY STATEMENTS.1 STATEMENT OF THE CASE AND FACTS......2-6 ISSUES ON APPEAL...7 SUMMARY OF ARGUMENT.....8 ARGUMENT.....9-23 CONCLUSION..........23 CERTIFICATE OF SERVICE.......23-24 CERTIFICATE OF COMPLIANCE... 24 i

TABLE OF CITATIONS CASE LAW PAGE Allstate Ins. Co. v. Martinez, 790 So. 2d 1151 (Fla. 2d DCA 2001)... 10 Allstate Ins. Co. v. Suarez, 786 So. 2d 645, 646 (Fla. 3d DCA). 10 approved, 833 So. 2d 762 (Fla. 2002)... 10 American Reliance Ins. Co. v. Devecht, 820 So. 2d 378 (Fla. 3d DCA 2002) 10 Barbe v. Villeneube, 505 So. 2d 1331 (Fla. 1987)... 19 Bryan v. Bryan, 930 So. 2d 693 (Fla. 3d DCA 2006).16 Callihan v. Kraals, 523 So. 2d 800 (Fla. 3d DCA 1988) 15 Falloon v. Caladonian Ins. Co., 161 Cal. App. 2d 522, 327 P. 2d 18 (Cal. Ct. App. 1958) 20 Goodwin v. State, 751 So. 2d 537 (Fla. 1999). 15 In Re: Temporary Commission of Investigation of the State of New York v. French, 418 N.Y.S. 2d 774 (N.Y. App. Div. 1979) 20 Keech v. Yousef, 815 So. 2d 718 (Fla. 5 th DCA 2002) 15 Kemp v. McDonough, 955 So. 2d 635 (Fla. 1 st DCA 2007) 15 Kendall Lakes Townhomes Developers, Inc. v. Agricultural Excess & Surplus Lines Ins. Co., 916 So. 2d 12 (Fla. 3d DCA 2005)... 22 Leonardo v. State Farm Fire & Cas. Co., 675 So. 2d 176 (Fla. 4 th DCA 1996).19 Marr v. Webb, 930 So. 2d 734 (Fla. 3d DCA 2006). 12, 13 ii

Miller v. Miller, 709 So. 2d 644 (Fla. 2d DCA 1998) 15 New Amsterdam Casualty Co. v. J.H. Blackshear, Inc., 116 Fla. 289, 156 So. 695 (Fla. 1934)... 11 Preferred Mut. Ins. Co. v. Martinez, 643 So. 2d 1101 (Fla. 3d DCA 1994)... 11 Preferred Nat l Ins. Co. v. Miami Springs Golf Villas, Inc., 789 So. 2d 1156 (Fla. 3d DCA 2001)..10 Regalado v. Cabezas, 959 So. 2d 282 (Fla. 3d DCA 2007) 9, 12, 13, 14 Schleger v. Stebelsky, 957 So. 2d 71 (Fla. 4 th DCA 2007)..22 Schnurmacher Holding, Inc. v. Noriega, 542 So. 2d 1327 (1989).. 11 State v. Cubic, 946 So. 2d 606 (Fla. 4 th DCA 2007)... 15 Three Palms Pointe, Inc. v. State Farm Fire and Cas. Co., 250 F.Supp. 2d 1357 (M.D. Fla. 2003). 10 aff d 362 F. 3d 1317(11th Cir. 2004) 10 United States Fidelity & Guaranty Co. v. Romay, 744 So. 2d 467 (Fla. 3d DCA 1999).. 11, 20 STATUTES 682.03, Fla. Stat.11 682.12, Fla. Stat.11 682.13(1), Fla. Stat..13, 14 iii

PRELIMINARY STATEMENT In this Answer Brief, Appellee, East Pass Towers II Condominium Association, Inc., refers to itself as Appellee or East Pass. Appellee refers to Appellant, Citizens Property Insurance Corporation as Appellant or Citizens. Appellee refers to the Record on Appeal with the prefix R. followed by the page number. 1

STATEMENT OF THE CASE AND FACTS East Pass accepts Citizens statement of the case and fact with the following additions and corrections. This matter involves an insurance dispute between East Pass and its windstorm insurer, Citizens, following a Hurricane Ivan loss in September, 2004. When the parties did not reach an agreement on the amount of damage sustained by East Pass, the Citizens policy s appraisal clause was invoked. According to that appraisal clause, if the parties cannot agree on the amount of the loss, each party will choose an appraiser, and the two appraisers will choose an independent and competent umpire to resolve the dispute. (R. 339). A decision agreed to by any two will set the amount of the loss. (R. 339). As contemplated by the appraisal provision, East Pass and Citizens each chose an appraiser. East Pass chose Scott Favre, and Citizens chose Douglas McColl. (R. 23-27, 42-44). When the two appraisers were unable to agree on an independent and competent umpire, East Pass filed a petition to appoint umpire with the trial court on December 9, 2005. (R. 1-4). The trial court entered an agreed order appointing Herman Johnson as the umpire on February 1, 2006. (R. 7). The umpire and the appraiser for the insured signed an appraisal award on June 7 and 8, 2006, in the amount of $4,625,386.00. (R. 70). 2

Instead of paying the appraisal award, as required by the policy, Citizens filed a motion with the trial court to vacate the award on June 26, 2006. (R. 8-17). Citizens motion alleged that its appraiser was not afforded an opportunity to inspect the premises or evaluate the nature and extent of the damages sustained by East Pass. (R. 8-17). In support of this motion, Citizens submitted an affidavit signed by Douglas McColl. (R. 23-27). East Pass asked the trial court to confirm the appraisal award. (R. 30-36). East Pass submitted the affidavits of Bob Ludeke, the president of the association, as well as Scott Favre and the umpire, Herman Johnson. (R. 42-44, 45-46, 47-48). Citizens responded further by filing an additional affidavit of Douglas McColl s assistant, Richard Meinhardt. (R. 49-51). All affidavits demonstrated that, on March 22, 2006, Scott Favre and Douglas McColl met at the damaged East Pass property. (R. 23-27). The affidavits disagreed about what transpired during that meeting. Douglas McColl claimed he was told that he would only be allowed to inspect one condominium unit on that date. (R. 23-27). However, there is nothing in the remainder of Douglas McColl s affidavit to suggest he was denied access to the property between March 22, 2006, and the date the appraisal award was signed by the East Pass appraiser and the umpire. 3

Scott Favre and Bob Ludeke claimed in their affidavits that Douglas McColl was offered the opportunity to view all units during the March 22, 2006, inspection, but he declined to do so. (R. 42-44, 45-46). According to Scott Favre, at that time, Douglas McColl stated he would never sign an award in favor of this insured, as he felt the insured had already been overpaid and if an award was going to be made, it would require the umpire s involvement. (R. 42-44). Although Douglas McColl s affidavit stated that he requested but never received a copy of Scott Favre s estimate, Scott Favre stated that he sent all requested documentation to Douglas McColl the day after the March 22, 2006, meeting. (R. 23-27, 42-44). The umpire, Herman Johnson, stated in his affidavit that he attempted, three times, over a period of three months, to have Douglas McColl visit the property for additional inspections, after the initial meeting. Herman Johnson stated his attempts were unsuccessful and Mr. McColl did not visit the property. (R. 47-48). According to Mr. Johnson, when he did not receive a response from Douglas McColl, he went to the property himself, and viewed 10 to 12 units around May 12, 2006. (R. 47-48). Herman Johnson stated that Douglas McColl s failure to view the East Pass property was a result of Mr. McColl s own inaction, and that he provided Mr. McColl an opportunity to present any evidence concerning the East Pass property within a reasonable time frame. (R. 47-48). 4

Following the submission of these affidavits, the trial court conducted a hearing on November 21, 2006, on Citizens motion to vacate the appraisal award and on the East Pass motion to confirm the award. (R. 215-260). The hearing was not set as an evidentiary hearing and, in fact, Citizens counsel stated on the record that an evidentiary hearing was not required in order for the court to rule on the issues at hand. (R. 221). Citizens argued at the hearing that the appraisal award should be set aside because the appraisers did not separately set the amount of loss and because Mr. McColl was not involved in the appraisal process. (R. 221). East Pass argued that Mr. McColl s lack of participation was his own fault, as evidenced by the affidavits submitted on behalf of East Pass, and that the umpire did not rubber stamp Scott Favre s estimate, but prepared an award based on his independent review. (R. 364-65). East Pass also argued that it was not inappropriate under these circumstances for the umpire to step in and act when Citizens appraiser failed to act. (R. 364-65). The trial judge listened to both sides arguments, reviewed the affidavits, and noted that more than two years after the hurricane the insured had still not received all payments owed by its insurer. (R. 241). The trial judge requested proposed orders from both sides as to how the parties would like the court to rule. (R. 251-252). 5

Both parties submitted proposed orders, and the trial judge signed the order confirming the award that was submitted by counsel for East Pass. (R. 254-260). Citizens moved for reconsideration, and that motion was denied, with final judgment entered. (R. 310-321, 398-431). Citizens ultimately appealed the denial of its motion to vacate the award. 6

ISSUE ON APPEAL WHETHER THE TRIAL COURT PROPERLY DENIED CITIZENS MOTION TO VACATE AND INSTEAD GRANTED THE EAST PASS MOTION TO CONFIRM THE APPRAISAL AWARD, WHEN THE COURT WAS PRESENTED WITH A SUFFICIENT BASIS FOR CONFIRMATION WITH RESPECT TO THIS ALTERNATIVE TO LITIGATION, AND WHEN CITIZENS DID NOT REQUEST AN EVIDENTIARY HEARING, AND DID NOT OBJECT TO THE SUBMISSION OF PROPOSED ORDERS AS REQUESTED BY THE TRIAL COURT JUDGE. 7

SUMMARY OF ARGUMENT Approximately three years after Hurricane Ivan struck the panhandle of Florida, East Pass has still not been paid the money owed to it by its insurer, Citizens. This insurance dispute, concerning the amount of the East Pass loss, appropriately proceeded to an insurance policy-authorized appraisal, and a proper appraisal award was entered in favor of East Pass in the amount of $4,625,386.00. During the appraisal process, when Citizens appraiser failed to properly act within the scope of his appointment as an appraiser, the umpire and the East Pass appraiser appropriately agreed to an award. After the award was entered, Citizens complained and asked the trial court to set aside the award by seeking a ruling premised on affidavits addressing the appraisal process. Significantly, appraisal is a favored method of dispute resolution, and an appraisal award should not be set aside lightly. The trial court properly confirmed the award based on the information at hand and the chosen procedural mechanism. Citizens cannot now argue that an evidentiary hearing should have been conducted, or that the order submitted by East Pass s counsel should not have been signed, when Citizens did not object to that process at the trial court level. The trial court was within its authority to confirm the award, and to enter final judgment in favor of East Pass. The trial court s judgment should be affirmed. 8

ARGUMENT THE TRIAL COURT PROPERLY DENIED CITIZENS MOTION TO VACATE AND INSTEAD GRANTED THE EAST PASS MOTION TO CONFIRM THE APPRAISAL AWARD, WHEN THE COURT WAS PRESENTED WITH A SUFFICIENT BASIS FOR CONFIRMATION WITH RESPECT TO THIS ALTERNATIVE TO LITIGATION, AND WHEN CITIZENS DID NOT REQUEST AN EVIDENTIARY HEARING, AND DID NOT OBJECT TO THE SUBMISSION OF PROPOSED ORDERS AS REQUESTED BY THE TRIAL COURT JUDGE. Citizens Initial Brief notes that an appellate court reviews an order granting or denying a motion to vacate an arbitration award as to questions of law by a de novo standard. Regalado v. Cabezas, 959 So. 2d 282 (Fla. 3d DCA 2007). However, Regalado notes that an appellate court reviews findings of fact under the competent substantial evidence standard, and that the appellate review must be limited, with a high degree of conclusiveness attaching to the arbitration award. The narrow scope of appellate review is necessary to ensure that arbitration does not become merely an added preliminary step to judicial resolution, rather than a true alternative. Id. Accordingly, East Pass submits that matters of law contained within this appeal should be addressed under a de novo standard, but that facts considered by the trial court judge should be reviewed by looking at whether competent substantial evidence supported the trial court s decision-making process. This 9

Court should focus on the limited scope of review available to Citizens in this appeal. The insurance policy appraisal process is an alternative to litigation and should be encouraged, not thwarted or second-guessed. As noted in the trial court s Order granting the East Pass motion to confirm the appraisal award: Appraisal provisions are commonly found in insurance policies for the purpose of resolving disputes concerning the valuation of a loss. See Allstate Ins. Co. v. Suarez, 786 So. 2d 645, 646 (Fla. 3d DCA), approved, 833 So. 2d 762 (Fla. 2002). Appraisal clauses are sometimes compared to arbitration procedures; however, since they involve alternative dispute resolution provisions, they are more limited processes concerning only the value of the loss, and they are conducted informally. See id. Although appraisals are not conducted as formally as arbitrations, the Florida Arbitration Code s confirmation process and other mechanisms have been recognized as appropriately utilized in the appraisal context. See, e.g., Three Palms Pointe, Inc. v. State Farm Fire and Cas. Co., 250 F.Supp. 2d 1357 (M.D. Fla. 2003), aff d 362 F. 3d 1317(11th Cir. 2004). As explained by Judge Moody, the District Court in Three Palms Pointe found that: Numerous Florida District Court of Appeal decisions have affirmed confirmation of appraisal awards utilizing Florida s Arbitration Code s confirmation process. See, e.g., American Reliance Ins. Co. v. Devecht, 820 So. 2d 378, 379 (Fla. 3d DCA 2002) (citing Florida Statute 682.13 while confirming an appraisal award); also Allstate Ins. Co. v. Martinez, 790 So. 2d 1151 (Fla. 2d DCA 2001) (affirming confirmation of appraisal); Preferred Nat l Ins. Co. v. Miami Springs Golf Villas, Inc., 789 So. 2d 1156 (Fla. 3d DCA 2001) (holding same). 10

While acknowledging some differences between appraisal and arbitration provisions, Florida courts have generally treated appraisal clauses as narrowly restricted arbitration provisions. United States Fidelity & Guaranty Co. v. Romay, 744 So. 2d 467, 469 (Fla. 3d DCA 1999). For example, Florida courts have repeatedly utilized Florida Statutes 682.03 as a basis to compel appraisals. See New Amsterdam Casualty Co. v. J.H. Blackshear, Inc., 116 Fla. 289, 156 So. 695, 696 (Fla. 1934); Romay, 744 So. 2d 467, 469 (Fla. 3d DCA 1999) (listing numerous cases); Preferred Mut. Ins. Co. v. Martinez, 643 So. 2d 1101, 1102-03 (Fla. 3d DCA 1994) (listing additional cases). Id. at 1361-1362. Florida s Arbitration Code allows for confirmation of an award in 682.12, Fla. Stat. The Code also contains a mechanism for vacating an award under certain limited circumstances. See 682.13, Fla. Stat. Although an insurance policy appraisal is not a true arbitration, and an appraisal does not follow a formal hearing procedure or utilize the other trappings of formality of arbitration, the court s ability to overturn an appraisal award must have certain limitations attached to it. This Court looks to the standard of review for vacating an arbitration award under Florida law, and must find that there are only limited circumstances when such a drastic step is appropriate. See Schnurmacher Holding, Inc. v. Noriega, 542 So. 2d 1327 (1989). In this case, the question is whether reasonable men could differ as to the propriety of the actions taken by the umpire. The Court finds that Citizens has not met its burden in that regard, and the submission of affidavits in support of its argument after the entry of the appraisal award, which are refuted by the affidavits submitted by East Pass, do not compel a finding that there was any impropriety or abuse of discretion in the umpire s conduct. There is no legal authority allowing an insurer to circumvent the appraisal process and delay payment under the guise of motions filed after the appraisal has occurred, if the insurer is not happy with 11

how the process was handled. If such were the case, each appraisal would merely be one more layer in the judicial process, and the public policy behind prompt resolution of claims would be defeated. Citizens has not met its burden to set aside the appraisal award, and this Court confirms the award as requested by East Pass. (R. 189-195). In this case, the trial court appropriately analyzed the legal standards and facts at hand, and appropriately determined that the appraisal award should stand. Citizens Initial Brief cites case law reinforcing the limited basis for reviewing a motion to vacate an arbitration award that has been denied by a trial court. In discussing the standard of review for this Court to utilize in reviewing the trial court s order confirming the East Pass appraisal award, Citizens cites Regalado v. Cabezas, 959 So. 2d 282 (Fla. 3d DCA 2007). Regalado dealt with a claim that the trial court erred in failing to set aside an arbitration award. See id. The Regalado court noted its limited ability to look beyond such an award, noting that arbitration is intended to be an alternative to litigation. Id., citing Marr v. Webb, 930 So. 2d 734, 737 (Fla. 3d DCA 2006). The Regalado court looked to the grounds set forth in Section 682.13(1), Fla. Stat., 1 and also addressed the argument that the trial court erred in not 1 The statute provides that an arbitration award can be vacated for reasons such as: procuring the award by corruption, fraud, or other undue means; evident partiality by an arbitrator or umpire; demonstrating that the arbitrators or umpire exceeded their powers; refusing to postpone the arbitration hearing upon sufficient cause 12

entertaining an evidentiary hearing after the submission of affidavits in support of the motion to vacate the award. See id. In reviewing the affidavits, the Regalado court determined that the affidavits did not set forth a prima facie case for vacation of the award under 682.13(1), as was being claimed under the facts of that case, and therefore there was no need for an evidentiary hearing pursuant to a motion filed under Fed. R. Civ. P. 1.540(b)(3). 2 See id. In looking at the argument that the arbitrators awarded relief when a trial court might not have done so under the particular facts of the case, the Regalado court noted that the arbitrator is the sole judge of the evidence and we will not disturb [his] findings on appeal. Id., citing Marr, 930 So. 2d at 738. Thus, the Regalado court affirmed the judgment confirming the awards. See id. In the case currently before this Court, both parties recognize that an insurance policy appraisal is similar in some way to, but in other ways different from, an arbitration. The differences are most easily seen by the informal nature of an appraisal process, rather than the formal evidence-presenting aspects of an arbitration. Citizens recognizes the similarity of the two in the way courts look at appraisal awards by citing to the arbitration standard of appellate review for purposes of asking this Court to overturn the appraisal award, and by seeking to being shown or refusing to hear evidence at the arbitration; no provision existing for arbitration to have occurred under the circumstances. 682.13(1), Fla. Stat. 13

vacate the award under the mechanism discussed in the Florida Arbitration Code. Yet, if this Court analyzes the confirmation of the award under the standards enunciated by Regalado, it must find that the trial court s conclusions were proper. As explained more fully below, East Pass position is that Citizens waived and/or did not preserve the right to argue an evidentiary hearing should have taken place. However, even if this Court is able to evaluate the question of the appropriateness of an evidentiary hearing, there was no prima facie showing of the need for vacation of the award under 682.13(1), Fla. Stat. Further, as was the case in Regalado, in this case, sufficient facts demonstrate that the umpire acted appropriately, as did the trial court. Finally, no question of law was misjudged in any way. Citizens cannot complain about the procedural process at the trial court level when that objection is raised for the first time on appeal. Citizens Initial Brief argues that the trial court reversibly erred by failing to conduct an evidentiary hearing on the question of confirming or vacating the award, and that the trial court erred in adopting an order presented by counsel for East Pass. The significant fact missing from this argument is that Citizens never requested an evidentiary hearing. Rather, Citizens counsel affirmatively stated 2 The procedural mechanism used in that case to seek to vacate the arbitration 14

that no evidentiary hearing was needed to rule on these issues. (R. 221). As a result, Citizens has waived and/or has not preserved this alleged error as a basis for overturning the trial court s order. Florida courts find that an appellate court cannot rule on an argument raised for the first time on appeal, when that issue was not raised before the trial court. See, e.g., Keech v. Yousef, 815 So. 2d 718 (Fla. 5 th DCA 2002); Kemp v. McDonough, 955 So. 2d 635 (Fla. 1 st DCA 2007); State v. Cubic, 946 So. 2d 606 (Fla. 4 th DCA 2007). If a party believes that evidence should have been addressed by the trial court, that party owes a duty to proffer the evidence to the court. See Callihan v. Kraals, 523 So. 2d 800 (Fla. 3d DCA 1988). An issue must be ruled upon at the trial court level in order for an appellate court to make a ruling on appeal. See Miller v. Miller, 709 So. 2d 644 (Fla. 2d DCA 1998). In this case, Citizens cannot claim the failure to receive evidence, other than the filed affidavits, as a reason for reversal, since Citizens agreed to the procedure of submitting affidavits to the trial court for the purpose of obtaining a ruling. Instead of affirmatively stating before the trial court that an evidentiary hearing was not needed, Citizens should have sought an evidentiary hearing if it wished to complain about the absence of one to this Court. Citizens invited the alleged error it now seeks to assert. See Goodwin v. State, 751 So. 2d 537 (Fla. 1999) award was a motion to set aside the judgment under this rule of civil procedure. 15

(explaining that a party cannot make or invite error and then use that error as a basis to appeal). Citizens also did not object to the trial court s procedure in requesting proposed orders from both parties at the end of the hearing. Thus, again, Citizens cannot claim error in this process, merely because the judge chose the East Pass proposed order. See, e.g., Bryan v. Bryan, 930 So. 2d 693 (Fla. 3d DCA 2006) (a party cannot invite error and seek relief on appeal, such that where the party does not object to a trial court s request for proposed orders, and then the trial court rules on one of those proposed orders, the appellate court cannot reverse the order on appeal). Although East Pass does not agree that the trial court acted inappropriately in either ruling on the submitted affidavits, or in asking both parties counsel to submit proposed orders, Citizens cannot now complain about the practice, since it agreed with the trial court s proposal and submitted its own proposed order. Citizens complaint arises from the fact that the trial court chose the East Pass-submitted order and Citizens cannot now claim any error in the trial court s procedural process. Appellate review at this juncture must be limited. This Court should recognize that this appeal is Citizens second attempt to have the appraisal award overturned after the appraisal process was over. 16

Importantly, neither Citizens nor its appraiser ever sought assistance or guidance from the trial court during the entire appraisal process. Only after the appraisal did criticism come to light. Courts are only given limited opportunities to involve themselves after the appraisal process is over, so that the process does not become one more step in litigation. Appraisal is intended to speed up resolution of a dispute, not slow it down. An insurer, such as Citizens, should not be allowed to file an affidavit after the fact and have the entire process break down. In this case, the trial court determined the umpire did not abuse his discretion in moving forward with the appraisal when he was unable to obtain the involvement of the insurer s appraiser. The trial court reviewed the competing affidavits, and appropriately found that Citizens had not met its burden to set aside the award or to take further action. Now, on a second level review, this Court must find substantial competent evidence to support the trial court s rulings on the facts, and that any implicated questions of law were appropriately addressed. One of Citizens complaints attempts to invoke the insurance policy s cooperation clause. Citizens cites to its appraiser s affidavit, stating he was not afforded an opportunity to inspect enough units of the condominium property. Yet both the East Pass appraiser and the umpire cite Mr. McColl s inaction as the reason he did not conduct a proper inspection. In fact, Mr. McColl s affidavit does 17

not contradict the East Pass claim that McColl made no effort to view the damaged property after the March, 22, 2006, meeting. The trial court was within its right in not finding the Citizens affidavit to be sufficient to find violation of any duty to cooperate on the part of the insured. Moreover, as noted by the trial court, a violation of the policy s cooperation clause should have been raised before the award was signed. An insurer should be not allowed to sit back and do nothing, and then raise policy defenses after the fact. Citizens also claims that, because its appraiser did not submit a valuation of the loss, the appraisal process was somehow flawed, and that the failure of all three individuals to meet is somehow fatal. Unfortunately, Citizens is reaching beyond the ultimate award to try to make up for its appraiser s lack of follow through. If Citizens appraiser had been so concerned during this several month-long process that culminated in the appraisal award, that period of time should have been when intervention was sought, not after the award was entered. Citizens complaints are too little, too late. Citizens appraiser could have, and should have, consulted with the umpire, and if he was not happy with the way the process was progressing, he should have asked Citizens to address the matter before the award was signed. The appraisal process is not meant to be examined under a microscope after the fact. 18

When Citizens appraiser failed to act, the umpire acted within his scope of authority, and Citizens complaint about compliance with policy conditions is misplaced. Citizens Initial Brief continually cites to the policy language concerning an insured s obligation to cooperate and to produce the damaged property for inspection. However, Citizens is confusing the insured s duty to cooperate with the insurer with the obligations of the appraisers to discharge their duties. The policy obligations quoted by Citizens have no bearing on whether the umpire acted appropriately. Citizens agreed to enter into an appraisal, and Citizens failed to raise any of these arguments before the award was entered. Such conduct essentially acts as either a waiver or as an election of remedies, such that these arguments cannot be brought at this time. See, e.g., Leonardo v. State Farm Fire & Cas. Co., 675 So. 2d 176 (Fla. 4 th DCA 1996) (an insurer waived its right to deny its obligations under an insurance contract by conduct inconsistent with the denial of these obligations); Barbe v. Villeneube, 505 So. 2d 1331, 1332 (Fla. 1987) ( the election of remedies doctrine is an application of the doctrine of estoppel and operates on the theory that a party electing one course of action should not later be allowed to avail himself of an incompatible course ). In fact, courts in other jurisdictions have found that if an appraiser for one side does not properly fulfill his function, it is appropriate for the umpire to step in 19

and act in his place. See, e.g., Falloon v. Caladonian Ins. Co., 161 Cal. App. 2d 522, 327 P. 2d 18 (Cal. Ct. App. 1958). Courts have also found that is it not appropriate to go behind an arbitration decision to investigate and obtain evidence. See In Re: Temporary Commission of Investigation of the State of New York v. French, 418 N.Y.S. 2d 774 (N.Y. App. Div. 1979). Further, although Citizens brief cites to cases such as United States Fidelity & Guaranty Co. v. Romay, 744 So. 2d 467 (Fla. 3d DCA 1999), in support of its position, the Romay decision discussed an insured s obligations before the appraisal process was triggered. In this case, there is no issue as to whether the insured complied with the policy s conditions before the appraisal process began. Thus, Romay is irrelevant to the issues before this Court in addressing matters after appraisal was invoked. What matters is that the trial court ruled on the matters brought forth at the hearing concerning whether Citizens appraiser made an effort to inspect the property and whether the umpire acted appropriately. Citizens claim of appraisal irregularities is unfounded. Citizens Initial Brief cites to the affidavit of its appraiser to claim that significant irregularities occurred during the appraisal process. Again, if Citizens wished to raise this issue before the appraisal was completed, it should have done so at that time. Citizens sat back and did nothing, and should not be rewarded with a further delay in the process. 20

Citizens points out that the information utilized by the East Pass appraiser, Scott Favre, was provided to him by the public adjuster. This reference is apparently intended to suggest that the East Pass appraiser did not fulfill his duties properly. However, nothing in the policy s appraisal clause says an appraiser cannot rely on another individual s expertise in presenting information to the umpire. There is nothing to say that an estimate must be prepared by the appraiser himself. Citizens also cites to its appraiser s affidavit stating that the East Pass appraiser did not provide copies of his reports to the Citizens appraiser. Again, this claim was not made before the appraisal award was rendered, and East Pass presented affidavits saying that any requested information was provided. The trial court was entitled to weigh the affidavits and rule accordingly. Again, if Citizens took issue with the submission of the affidavits by East Pass in response to the affidavits submitted by Citizens, then Citizens should have raised that at the trial court level. Citizens references in its Initial Brief to hearsay in the affidavits is unavailing at this time, as no objections were raised during the initial hearing on the subject. The trial court hearing was not a motion for summary judgment, and disputes in the evidence were appropriately analyzed. There was no request for an evidentiary hearing, and there was no legal requirement for one to occur. 21

Further, even if this Court were to find that Citizens did not waive the right to an evidentiary hearing, Citizens current request for one is not supportable. Although Citizens cites to Schleger v. Stebelsky, 957 So. 2d 71 (Fla. 4 th DCA 2007), in support of its belief that an evidentiary hearing should have taken place, that case dealt with a motion for relief from judgment, not a motion to vacate an appraisal award, and the Schleger court s reference to a colorable argument is insurmountable in this case. In all, Citizens has not located any true citation of authority to support its claim under Florida law. For example, a case such as Kendall Lakes Townhomes Developers, Inc. v. Agricultural Excess & Surplus Lines Ins. Co., 916 So. 2d 12 (Fla. 3d DCA 2005), is distinguishable. Like the present case, Kendall Lakes also dealt with confirmation of an appraisal award and the denial of a motion to vacate. See id. Citizens cites Kendall Lakes for the proposition that it is appropriate to reverse the confirmation when the umpire exceeds his authority. However, the facts of Kendall Lakes do not support Citizens position here. The reason the Kendall Lakes court reversed the confirmation was because the trial court s order appointing the umpire placed specific limitations on his authority, and the umpire made a ruling that was clearly in contravention of that court-appointed authority. See id. In this case, no such court order exists, and the trial court properly 22

determined that the umpire s conduct was appropriate based on the evidence at hand. Although Citizens can sit back now and say that it wants to speed up the appraisal process, the fact remains that the storm occurred three years ago, and East Pass does not have its money. A second appraisal would cause further delay and most likely no different result. Confirmation of the appraisal award was appropriate, and the umpire acted within the scope of his authority in signing the appraisal award. CONCLUSION Based on the foregoing, East Pass respectfully requests that this Court affirm the trial court s judgment and rulings in all respects. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing have been furnished to James M. Fishman, Esquire, James M. Fishman, P.A., 9655 S. Dixie Highway, Suite 102, Miami, Florida 33156, Lamar Conerly, Esquire, Law Offices of Lamar A. Conerly, P.O. Box 6944, Destin, Florida 32550, on this day of September, 2007. William F. Merlin, Jr., Esquire Florida Bar No.: 364721 23

Mary E. Kestenbaum, Esquire Florida Bar No.: 114596 Merlin Law Group, P.A. 777 S. Harbour Island Blvd., Suite 950 Tampa, Florida 33602 Telephone: 813-229-1000 Facsimile: 813-229-3692 Attorneys for Appellee CERTIFICATE OF COMPLIANCE We certify that this Answer Brief uses 14 point Times New Roman Type, a font that is proportionately spaced. Mary E. Kestenbaum, Esq. 24