PROGRESSIVE AMERICAN INSURANCE COMPANY v. BROWARD INSURANCE RECOVERY CENTER, LLC a/a/o ALBERT LINARES ( 2021 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
PROGRESSIVE AMERICAN INSURANCE COMPANY,
Appellant,
v.
BROWARD INSURANCE RECOVERY CENTER, LLC a/a/o ALBERT
LINARES,
Appellee.
No. 4D21-542
[May 26, 2021]
Nonfinal appeal from the County Court for the Seventeenth Judicial
Circuit, Broward County; Steven DeLuca, Judge; L.T. Case No. CONO17-
001287, CACE20-7748.
Alexandra Valdes and Daniel Montgomery of Cole, Scott & Kissane,
P.A., Miami, for appellant.
Joseph R. Dawson of Law Offices of Joseph R. Dawson, P.A., Fort
Lauderdale, for appellee.
PER CURIAM.
This case concerns the availability of the prohibitive cost doctrine to
challenge an insurer’s invocation of an appraisal process provided for in
the insurance policy. We hold that the doctrine is not available to
invalidate an insurer’s election of the appraisal process.
This case was transferred from the circuit court due to the recent
change in appellate jurisdiction. The circuit court granted a certiorari
petition and quashed a county court order that had applied the prohibitive
cost doctrine to preclude appraisal of a windshield repair claim. The
plaintiff in the county court case filed a timely motion for rehearing, which
remained pending following the transfer to this Court.
We treat the petition for certiorari as a nonfinal appeal. The order at
issue determines the right to appraisal and is appealable under Florida
Rule of Appellate Procedure 9.130(a)(3)(C)(iv). Under Mallory v.
Brinckerhoff, 312 So. 3d 944 (Fla. 4th DCA 2021), the order at issue is now
appealable in this Court following the transfer from circuit court.
We grant the motion for rehearing, but nonetheless reverse the order of
the county court. Our reasoning differs from that of the circuit court. 1
Background
Albert Linares had a comprehensive automobile insurance policy with
Progressive American Insurance Company that provided coverage for
breakage of window glass. The policy stated that Progressive would pay
(without a deductible) up to the “prevailing competitive labor rates charged
in the area where the property is to be repaired and the cost of repair or
replacement parts and equipment” as reasonably determined by the
insurer.
In 2015, Linares’s covered vehicle suffered windshield damage. He had
it repaired by Clear Vision Windshield Repair, LLC. Linares assigned his
insurance benefits to Clear Vision, which submitted an invoice to
Progressive for $117.70. Progressive determined that the reasonable
repair cost was $60 and sent Clear Vision a letter invoking the right to
appraisal under the policy. Clear Vision failed to respond within the 30-
day time provided for in the policy. Progressive sent another letter deeming
Clear Vision to have accepted Progressive’s determination of a reasonable
cost of repair and paying $60 for the claim.
Clear Vision assigned its rights under the policy to Broward Insurance
Recovery Center (“BIRC”). In 2017, BIRC filed a small claims statement of
claim in the county court asserting a breach of contract for failing to pay
the full amount of the repair invoice, $117.70.
Progressive moved to dismiss or abate the action and to compel an
appraisal. BIRC moved for an evidentiary hearing, arguing that it had a
right to present evidence that the cost of appraisal was prohibitive and
that the clause was therefore unenforceable. The policy’s appraisal clause
required the insurer and insured to each select a competent and impartial
appraiser. If the appraisers were unable to agree as to the amount of the
loss, the appraisers would select an impartial umpire to settle the dispute.
The policy required the insured to pay the cost for its appraiser and to split
all other costs with the insurer – including the cost of an umpire if
necessary.
1However, we do not disturb the circuit court’s denial of Broward Insurance
Recovery Center’s motion for attorney’s fees.
2
After an evidentiary hearing, the county court ruled that the prohibitive
cost doctrine precluded appraisal. The evidence at the hearing established
that the damages at issue was $117.70 and that BIRC would have to spend
between $150 and $200 for an appraiser as well as the cost of an umpire
if one became necessary.
Challenging the order, Progressive petitioned for a writ of certiorari in
the circuit court. The circuit court granted the petition and quashed the
county court’s order. The circuit court reasoned that BIRC failed to carry
its burden of showing that the cost of appraisal would grossly exceed the
cost of litigation. BIRC moved for rehearing, which remained pending
when the case was transferred to this court. In its motion, BIRC pointed
out that the actual amount of damages was liquidated at about $26 and
contended that it had shown that it would cost at least $150 to appraise
the claim.
Discussion
We decline to extend the prohibitive cost doctrine to the contractually-
mandated appraisal process here at issue. The doctrine arose in
arbitration cases and has been applied in arbitration cases. Apart from
the traditional court system, arbitration is an alternate forum for litigation
where the competing parties have the chance to present evidence to a
finder of fact. The contractual appraisal process contemplates a more
abbreviated dispute resolution than either arbitration or the court system.
The sole focus of the appraisal is the amount of the loss. Such a narrowly-
focused, bargained-for dispute resolution mechanism may deliver benefits
to both sides—lower rates for the insured and lower litigation costs for the
insurer. Absent a directive from the Florida Supreme Court, this Court
should not rewrite the contract by imposing a judge-crafted doctrine to
bypass the contractual remedy.
The prohibitive cost doctrine is a “defense which has been developing
since the United States Supreme Court’s opinion in Green Tree Financial
Corp.-Alabama v. Randolph, 531 U.S. 79 (2000).” Zephyr Haven Health &
Rehab Ctr., Inc. v. Hardin (ex rel. Hardin), 122 So. 3d 916, 921 (Fla. 2d DCA
2013) (parallel citations omitted). The significant Florida cases discussing
the prohibitive cost doctrine all recognize its applicability to cases where
arbitration is at issue.
For example, in Stewart Agency, Inc. v. Robinson, 855 So. 2d 726, 728
(Fla. 4th DCA 2003), we explained that “Green [Tree] has been interpreted
as requiring the party seeking to avoid the arbitration agreement on the
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ground that it may involve some cost shifting to establish that the
agreement would preclude him from effectively vindicating his rights by
showing the likelihood, not the possibility, of incurring such costs.”
(Emphasis supplied). Similarly, Zephyr Haven recognized that a person
seeking to invalidate an arbitration agreement must make “some showing
of individualized prohibitive expense” that is “so substantial as to deter the
bringing of claims.” 122 So. 3d at 922 (quoting Bradford v. Rockwell
Semiconductor Sys., Inc., 238 F.3d 549, 556–57 (4th Cir. 2001)). In Fl-
Tampa, LLC v. Kelly-Hall, 135 So. 3d 563, 567 (Fla. 2d DCA 2014), the
court observed that “since Green Tree the issue of the prohibitive costs of
arbitration has developed into a separate defense to the enforcement of an
arbitration agreement.” (Emphasis supplied). We have found no authority
for extending the doctrine to an appraisal process like the one involved in
this case. 2
Based on the foregoing, we grant the motion for rehearing and reverse
the order of the county court for the reasons expressed in this opinion.
Reversed and remanded.
WARNER and GROSS, JJ., concur.
ARTAU, J., concurs specially with opinion.
ARTAU, J., concurring specially.
While I concur with the majority’s conclusion that this court cannot
rewrite the contract provision mandating appraisal by imposing a judge-
crafted doctrine, I write separately to express my view that judges are not
policymakers. Thus, in the absence of legislative authority, we should not
apply such a doctrine to rewrite this or any other contractual provision.
Accordingly, I fully concur with the granting of the motion for rehearing
and reversal of the county court’s application of a judge-crafted doctrine
to preclude enforcement of the contractual provision mandating appraisal.
* * *
Not final until disposition of timely filed motion for rehearing.
2 We also question whether an assignee of benefits under the insurance policy on
a post-loss claim can challenge the remedial provisions of the policy, having taken
the assignment with full knowledge of the terms of the appraisal process. See
Webb Roofing & Constr., LLC v. Fednat Ins. Co., 2D20-1881, 2021 WL 1277974(Fla. 2d DCA Apr. 7, 2021).
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