Ringelman v. Citizens Property , 228 So. 3d 602 ( 2017 )

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT
NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
JOSEPH RINGELMAN,
Appellant,
v. Case No. 5D16-260
CITIZENS PROPERTY INSURANCE
CORPORATION,
Appellee.
________________________________/
Opinion filed September 1, 2017
Appeal from the Circuit Court
for Hernando County,
Richard Tombrink, Jr., Judge.
George A. Vaka and Nancy A. Lauten,
of Vaka Law Group, P.L., Tampa, for
Appellant.
Jonathan D. Franklin, of Franklin Legal
Group, P.A., Miami, for Appellee.
PER CURIAM.
Appellant, Joseph Ringelman, appeals a final judgment entered in his favor
following his suit for breach of contract against his insurer, Citizens Property Insurance
Corporation ("Citizens"). Ringelman argues on appeal that the trial court erred by staying
execution of the final judgment until he provides Citizens with a signed contract for
completion of the necessary subsurface repairs to his home, which was damaged by
sinkhole activity. Considering Citizens's representations during oral argument, we affirm.
Citizens issued Ringelman a homeowner's insurance policy that provided
coverage limits of $225,900. The policy included the following provisions concerning
sinkhole damage:
SECTION I – PERILS INSURED AGAINST
The following is added to SECTION I – PERILS INSURED
AGAINST:
Sinkhole Loss.
1. We insure for direct physical loss to property covered
under Section I caused by the peril of "sinkhole loss,"
including the costs incurred to:
a. Stabilize the land and building; and
b. Repair the foundation;
In accordance with the recommendations of the
professional engineer who verifies the presence of a
"sinkhole loss" in compliance with Florida sinkhole
testing standards and in consultation with you.
The professional engineer must be selected or
approved by us.
2. This peril does not increase the limit of liability applying
to the covered property.
....
SECTION I – CONDITIONS
Loss Settlement paragraph 3.b.(5) is added as follows:
(5) In the event of a "sinkhole loss":
(a) We will pay for "Sinkhole loss," subject to (e)(ii)
below, up to the applicable Section I – Property
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Coverage Limit of Liability shown in your
Declarations.
(b) We will pay no more than the actual cash value of
the damaged property; not including underpinning or
grouting or any other repair technique performed below
the existing foundation of the building, until you enter
into a contract for the performance of building
stabilization or foundation repairs.
(c) Once you enter into such contract, we will pay the
amounts necessary to begin and perform such repairs
as the work is performed and as the expenses are
incurred.
(d) We may at our option, and with your written
approval and written approval of any lienholder, make
payment directly to the persons selected by you to
perform the land and building stabilization and
foundation repairs.
(e) If repair has begun and the professional engineer
selected or approved by us determines that the repairs
will exceed the applicable Limit of Insurance, we will at
our option; either:
(i) Complete the professional engineer's
recommended repairs; or
(ii) Pay the policy limits without a reduction for
the repair expenses incurred.
In June 2011, Ringelman notified Citizens that he discovered damage to the floors
and walls of his home purportedly caused by sinkhole activity. At the conclusion of the
claims process, Citizens extended coverage for the sinkhole loss, informing Ringelman
that it would pay $208,322.36 to stabilize his home after he provided Citizens with a
signed contract to complete the subsurface repairs.1 Ringelman responded by sending
1In the interim, Citizens provided Ringelman with a check for $12,827.23 to repair
the cosmetic damage to the property.
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Citizens a "Sinkhole Demand Package," requesting a total of $329,110.56 to effect the
stabilization repairs. When negotiations reached an impasse, Ringelman filed suit against
Citizens for breach of contract, requesting that the jury determine the amount required to
effectuate the repairs. The jury returned a verdict against Citizens, finding that it
"breached the policy for below ground damages caused by sinkhole activity." The jury
determined that "the total amount of subsurface repair costs" amounted to $445,000.
Post-trial, Citizens moved for remittitur, reasoning that the jury's award "exceed[ed]
the available insurance coverage by at least $219,000, which does not include any prior
payments for the deductible." Citizens further argued in opposition to Ringelman's motion
for entry of final judgment that any duty to pay the claim must be preceded by Ringelman
providing it with a signed contract to complete the necessary repairs. Ultimately, the lower
court granted Citizens's motion for remittitur, reducing the verdict "to the insurance policy
limits ($225,900), minus the deductible and previous payments." Ringelman filed a
"qualified acceptance of remittitur," explaining that he "reserv[ed] his right to challenge
. . . the portion of the order that requires Mr. Ringelman to enter into a contract to repair
the sinkhole-damaged property when the cost of those repairs . . . far exceed the policy
limits and the amount of the remitted judgment."
After a hearing at which the parties attempted to agree on the language of the final
judgment, Citizens proposed a final judgment that included the following provisions:
(A) The verdict is remitted to subject insurance policy limits
($225,900.00), minus the deductible and any previous
payments, if any.
(B) The Plaintiff must use the net proceeds from the remitted
monetary final judgment, after consideration of the reasonable
attorney's fees and reasonable litigation costs, to repair the
sinkhole-damaged property; unless, Defendant pursuant to
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the subject policy, chooses to exceed the policy limits in the
repair of the property.
(C) Execution of this Final Judgment shall be stayed pending
the Plaintiff providing Defendant with signed contracts to
complete the stabilization and/or cosmetic repairs at the
insured property.
(D) That given the Plaintiff is the prevailing party in this action,
he is entitled to an award of his reasonable attorney's fees,
costs, and interest in the matter as lawfully appropriate.
(E) The Court retains jurisdiction to determine the amount of
attorney's fees, costs, and interest that the Plaintiff may
recover from Defendant.
Ringelman maintained his position that, because the trial court remitted the verdict to the
policy limit, the proposed final judgment placed him in a precarious position wherein he
would have to "enter into a contract to, quote, repair, for a house that can't be repaired
for the $225,000." The trial court disagreed, entering a final judgment containing the
aforementioned provisions requested by Citizens. Ringelman now challenges the portion
of the final judgment staying execution until he provides Citizens with a signed contract
to complete the necessary repairs.
"The issue in this case concerns construction of an insurance policy which is a
question of law subject to de novo review." Wash. Nat'l Ins. Corp. v. Ruderman, 117 So.
3d 943, 948 (Fla. 2013). Section 627.707, Florida Statutes (2011), sets forth the
procedures for resolving sinkhole claims. If the insurer verifies damage caused by
sinkhole activity, it must adhere to the following procedures for repairing the damage:
(5) If a sinkhole loss is verified, the insurer shall pay to
stabilize the land and building and repair the foundation in
accordance with the recommendations of the professional
engineer retained pursuant to subsection (2), with notice to
the policyholder, subject to the coverage and terms of the
policy. The insurer shall pay for other repairs to the structure
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and contents in accordance with the terms of the policy. . . .
However, if the insurer's professional engineer determines
that the repair cannot be completed within policy limits, the
insurer must pay to complete the repairs recommended by the
insurer's professional engineer or tender the policy limits to
the policyholder.
(a) The insurer may limit its total claims payment to the actual
cash value of the sinkhole loss, which does not include
underpinning or grouting or any other repair technique
performed below the existing foundation of the building, until
the policyholder enters into a contract for the performance of
building stabilization or foundation repairs in accordance with
the recommendations set forth in the insurer's report issued
pursuant to s. 627.7073.
(b) In order to prevent additional damage to the building or
structure, the policyholder must enter into a contract for the
performance of building stabilization and foundation repairs
within 90 days after the insurance company confirms
coverage for the sinkhole loss and notifies the policyholder of
such confirmation. This time period is tolled if either party
invokes the neutral evaluation process, and begins again 10
days after the conclusion of the neutral evaluation process.
(c) After the policyholder enters into the contract for the
performance of building stabilization and foundation repairs,
the insurer shall pay the amounts necessary to begin and
perform such repairs as the work is performed and the
expenses are incurred. The insurer may not require the
policyholder to advance payment for such repairs. If repair
covered by a personal lines residential property insurance
policy has begun and the professional engineer selected or
approved by the insurer determines that the repair cannot be
completed within the policy limits, the insurer must complete
the professional engineer's recommended repair or tender the
policy limits to the policyholder without a reduction for the
repair expenses incurred.
Id. § 627.707(5) (emphasis added).
The Second District Court has issued several opinions resolving the precise issue
in this case, all of which addressed the same sinkhole provisions in Ringelman's
insurance policy. For example, in Citizens Property Insurance Corp. v. Amat, 198 So. 3d
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730, 731 (Fla. 2d DCA 2016), the homeowners reported damage to their home from
suspected sinkhole activity. Citizens denied the claim, and the case proceeded to a jury
trial. Id. After the jury returned a verdict for the homeowners, the trial court entered final
judgment against Citizens for approximately $168,000. Id. On appeal, Citizens argued the
trial court erred by "requiring it to pay for the cost of the subsurface repairs without
requiring the Homeowners to enter into a contract for those repairs." Id. at 732. The
Second District Court agreed:
Subparagraph (b) allows for immediate payment for only
cosmetic repairs, i.e., repairs for damages occurring above
the ground. In contrast, subparagraph (b) provides that
payment will not be made for subsurface stabilization and
repair, i.e., damages occurring below the ground, until the
insureds enter into a contract for the subsurface repairs. . . .
....
Thus, even if this case could be said to involve "a total breach
of the contract," the Homeowners themselves chose to
enforce the contract, not to rescind it. Based on the jury's
finding of coverage, the trial court was obligated to enforce the
contract, including the policy's restrictions on Citizens'
obligations to pay for the cost of the repair for subsurface
damages.
Id. at 733-34. Accordingly, the court reversed the "final judgment to the extent that it
awarded money damages payable to the Homeowners without recognizing Citizens's
right to withhold payment for the cost of the subsurface repairs until the Homeowners
enter into a contract for those repairs." Id. at 735. The Second District Court has reached
the same conclusion in several additional cases. See, e.g., Citizens Prop. Ins. Corp. v.
Simoneau, 197 So. 3d 70, 71 (Fla. 2d DCA 2016); Citizens Prop. Ins. Corp. v. Blaha, 194
So. 3d 411, 416 (Fla. 2d DCA 2016); Citizens Prop. Ins. Corp. v. Retz, 193 So. 3d 1084,
1084 (Fla. 2d DCA 2016).
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During oral argument in this case, the parties answered questions from the panel
regarding which party bears responsibility for paying the cost to repair the home above
the $225,900 policy limit, given that the jury determined that it would cost $445,000 to
stabilize Ringelman's home. Counsel for Citizens made the following specific
representation:
We have asked for a repair contract to perform the repairs that
the jury found were necessary and we have asked for that
contract so that we can pay which means we will exceed our
policy limits. That is consistent with the statute. . . . As soon
as they bring the contract, the process begins.
In light of counsel's statements, we find that Citizens has waived its option under section
3.b.5(e) of the insurance policy to tender the policy limits in lieu of paying in excess of
those limits to complete the repairs.2 Accordingly, we affirm the final judgment but remand
with instructions to enter a corrected order reflecting that, when Ringelman provides
Citizens with a signed contract to complete the necessary repairs, Citizens shall pay that
amount instead of tendering the policy limits.
AFFIRMED and REMANDED with Instructions.
TORPY, WALLIS and LAMBERT, JJ., concur.
2 Case law supports the proposition that counsel's representations during oral
argument are binding. See Freeman v. BellSouth Telecomms., Inc., 954 So. 2d 45, 46
(Fla. 1st DCA 2007) ("At oral argument, BellSouth stipulated that if this court were to
reverse on appeal, BellSouth would abide by the original jury verdict and abandon its
motion for remittitur."); Sound Builders of St. Petersburg, Inc. v. Hanlon, 439 So. 2d 276,
276 (Fla. 2d DCA 1983) ("At oral argument, counsel for both parties stipulated that one
of the final judgments should be stricken."); Renfroe v. Renfroe, 326 So. 2d 211, 211 (Fla.
4th DCA 1976) ("On oral argument before the court, counsel for the respective parties
stipulated that such payments were to be made weekly. Accordingly the final judgment is
modified to this effect.").
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