Florida’s Third District Court of Appeals recently held that whether “prompt” notice was given to an insurer of a claim occurring over three and a half years after a hurricane caused damages to a condominium is a question of fact that must be given to the jury. This ruling confirms that the date on which an insureds’ duty to report a claim is triggered under an insurance policy’s notice provision is an issue of fact not ripe for summary judgment. The case is Laquer v. Citizens Property Insurance Corporation.
The plaintiff, Edie Laquer, owned a condominium unit in South Florida and purchased an insurance policy from Citizens Property Insurance Corporation (Citizens) to insure personal property from damage by a hurricane or other weather conditions. Between approximately 2001 and 2008, Laquer rented her condominium unit fully furnished to a tenant.
Hurricane Wilma struck South Florida on October 24, 2005.
After the hurricane, Laquer’s unit, which was protected from hurricane damage by hurricane shutters, was visited by the condominium manager and other individuals on a monthly basis. At no time did they observe damage to the walls or floors of Laquer’s unit.
In September 2008, the tenant moved out and Laquer visited the unit to prepare it for the next rental. At that point, she discovered that some of the wood flooring had warped due to water damage and, in April 2009, hired an environmental contractor to perform mold remediation. The contractor discovered “severe mold growth” and water stains on the interior of the wall. Based on the contractor’s experience, he concluded that, after wind-driven rain entered the adjacent condominium, it came through the demising wall and into Laquer’s unit, causing damage to Laquer’s personal property. In May 2009, after an inquiry to the condominium manger regarding the potential source of water seepage into her condominium, Laquer learned for the first time that the likely cause was Hurricane Wilma.
Laquer immediately reported the personal property damage to Citizens, on May 19, 2009, and submitted a sworn proof of loss within sixty days of Citizens’ request, pursuant to the terms of the Citizens policy. Citizens denied the claim, arguing that a delay of more than three years in reporting the claim did not comply with the policy requirement that, [i]In case of a loss to covered property, [Laquer] must … [g]ive prompt notice to” Citizens.
The trial court had previously entered a partial summary judgment, holding that the insurance claim was not “prompt” as a matter of law. At trial, the jury concluded Citizens was also prejudiced by Laquer’s delay in reporting the claim. The Third District Court of Appeals, however, disagreed.
Noting that the damages to Laquer’s unit were not obvious until years after Hurricane Wilma and had not been observed by any of the many individuals regularly visiting the unit, and relying on case law holding that undefined phrases like “prompt,” “immediate,” and “as soon as practicable” do not require “instantaneous notice,” the Court held that “the issue of whether an insured provided ‘prompt’ notice generally presents an issue of fact.”
The Court refused to accept either parties’ contention regarding the triggering event for notice. While Citizens’ contended that Hurricane Wilma was the event triggering the notice requirement, and Laquer asserted that the duty to provide notice did not arise until date she became aware of the extent or cause of the damage, the Court instead held that fact issues existed regarding when a “reasonable and prudent person would believe that a potential claim for damages might exist.”
Finally, with respect to the jury’s finding that Citizens was prejudiced by Laquer’s delay in providing notice, the Court held that the issues of “prompt” notice and prejudice were so factually intertwined with the triggering date of Laquer’s duty to provide such notice that that they could not be tried separately. Accordingly, the Court reversed and remanded for a new trial on both issues.
This victory for Laquer is yet another reminder that policyholders should carefully consider their options when an insurer denies coverage for a claim based on late notice. Numerous factual and legal issues may arise when attempting to correctly identify the event triggering a policy’s notice requirement, and based on the date of that event, whether the insurer definitively suffered prejudice. While notice may not be “prompt” in the eyes of an insurer, instantaneous notification of a claim is not required, and the specific factual circumstances at issue may provide an avenue towards coverage.