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Failure to Submit Sworn Proof of Loss is not a Bar to an Insurance Claim

We recently discussed the Fifth DCA’s ruling in Whistler Park v. FIGA.  Thereafter, the Fifth DCA issued another ruling relying on Whistler Park.  In sum, and under certain circumstances, one’s failure to submit a sworn proof of loss is not a bar to an insurance claim.

In Hamilton v. State Farm Florida Insurance Company, Florida’s Fifth District Court of Appeal concluded that the facts in the case determined that there was a disputed issue of material fact regarding whether or not State Farm was, in fact, prejudiced by Hamilton’s alleged failure to submit a sworn proof of loss to the insurance company. The Fifth DCA ruled that they would base their findings on Whistler’s Park, Inc. v. Florida Insurance Guaranty Ass’n.

As stated in more detailed in our previous post, the Whistler Park court found that the insurer was not prejudiced by the insured’s failure to comply with conditions precedent prior to filing suit because the insured had expressed a willingness to comply and the insurance company had failed to follow up.

The Fifth DCA seems to be moving in the direction of trying to prevent the “gotcha” litigation tactics that many insurance companies seem to employ.  Indeed, the appellate court, in Whistler Park, observed that many insurance companies have, in Florida, lost sight of the true purpose of the EUO and instead engage in gotcha litigation tactics in order to potentially save themselves from paying on valid insurance claims.  The court went on to comment that litigating cases in this way seems “more about strategy than truth.”

In the Hamilton case nevertheless, the proof of loss was filed seven months after filing suit. In Hamilton, the court granted the motion for rehearing in favor of the Plaintiff and remanded the case to the trial court to determine if the insurer has been prejudiced or not by the Plaintiff’s failure to submit a sworn proof of loss.

Appellate Court Rules that the Presumption of Prejudice Analysis Applies when Failing to Timely Submit a Sworn Proof of Loss

sworn proof of loss 001.jpgIn Allstate v. Farmer, the Fifth District Court of Appeal decided a case against Allstate Insurance Company. In that case, Allstate was able to prove that their insured, the Farmers, failed to comply with the “proof of loss” provision in the insurance policy. The Farmers home was struck by lightning causing damage to different areas of their home, and a little while later were also victims to a car theft in front of their home. Due to these incidents they filed claims for each separate occurrence with Allstate. However, Allstate suspected fraud and proceeded to investigate this claims.

During Allstate’s investigation, the Farmers cooperated by giving recorded statements, provided requested documentation, obtained appraisals, and submited to examinations under oath, all prior to the commencement of litigation. The only thing that the Farmers failed to do was give a signed and sworn proof of loss form to Allstate, which they claim they sent, but Allstate claims they never received.

At the initial trial the jury found that the Farmers breached the proof of loss provision in the policy, but this breach was not material and did not prejudice Allstate in anyway regarding the claims made. Allstate then filed an appeal.

On appeal, Allstate argued that the jury was not permitted to decide whether they were prejudiced by any breach of the proof of loss provision or whether the Farmers substantially complied with the proof of loss provision. Allstate claimed that the Farmers did not substantially comply with the proof of loss provision in the policy.

The Appeals court found that the trial court was correct and there was not material breach of the contract, because Allstate was not prejudiced in anyway. The Fifth District Court of Appeal agreed with the trial court and did not reverse the ruling on appeal.

The significance of this ruling is that it extends Florida’s presumption of prejudice rule to cases involving the failure to submit a timely sworn proof of loss prior to filing suit.
The reason neither the trial court, or appellate court, found Allstate to be prejudiced by the Farmers failure to submit a proof of loss provision, was because the Farmers cooperated with Allstate’s request regarding their claims. They submitted multiple itemized lists of losses, gave recorded statements, obtained appraisals, and took examinations under oath.

The Framers continued cooperation with Allstate, was deemed to be enough for Allstate to satisfy their duties under the contract in which they failed to do. Allstate also tried to claim that they had multiple itemized lists with the same items, to which they failed to provide evidence of fraud.

The Appeal’s court found that the prejudice presumption rule was properly applied in the trial court, and that Allstate was in no way prejudiced by the Farmers failure to comply with the proof of loss provision.

The Farmers relied on Bankers Ins. Co. v. Macias, 475 So. 2d 1216 (Fla. 1985) in support of their position that an insured’s claim is not barred for failing to submit a sworn proof of loss upon demonstrating that the insurer was not prejudiced by the breach. The 5th DCA agreed with that position, and concluded that Macias is applicable to breaches of proof of loss conditions.

To support that conclusion, the 5th DCA cited to several recent 4th DCA cases that applied the prejudice presumption rule where an insured failed to provide both notice and proof of loss. Soronson v. State Farm Fla. Ins. Co. 96 So.3d 949 Fla. 4th DCA 2012); Kramer v. State Farm Fla. Ins. Co., 95 So. 3d 303 (Fla. 4th DCA 2012).

In sum, the 5th DCA in Allstate v. Farmer extended Florida’s presumption of prejudice rule to cases involving the failure to submit a timely sworn proof of loss prior to filing suit.

Flood Claims – It is Imperative to Submit a Timely Sworn Proof of Loss

flood.jpgOne of the most important components of any flood claim is to ensure the timely submission of a sworn proof of loss. Flood policies typically impose a strict requirement that any sworn proof of loss must provided within 60 days. Therefore, it should not come as a surprise that most litigation involving flood claims centers on whether or not the insured complied with the time requirements to submit a sworn proof of loss timely. Courts across the nation have uniformly concluded that an insured’s failure to comply with the conditions precedent to filing suit, such as the timely submission of a sworn proof of loss, will bar an insured’s ability to make a financial recovery under the policy. In other words, even though the insured paid thousands of dollars to buy a flood policy, if the insured fails to submit a timely sworn proof of loss, recovery will be barred. Moreover, an important component of the proof of loss requirements is that the insured is also required to furnish certain information to the flood carrier in support of the insured’s proof of loss. The documentation provided must strictly comply with the flood policy in order for the insured to make a financial recovery. Simply put, the insured must provide the insurance company with some means by which to verify the amounts claimed in the insured’s sworn proof of loss. And that documentation must also be provided timely, and at the time the sworn proof of loss is filed with the insurance carrier. With that said, the sworn proof of loss requirement has tripped up an astonishing number of claimants attempting to compensation for their loss. If suit is filed then the insurance company will file a motion for summary judgment arguing that the insured failed to comply with the policy terms. And more often than not, the insurance company will prevail at that motion for summary judgment thereby precluding recovery for the insured. With that said, contact us today to discuss your flood claim. —– EXTENDED BODY: Consider Your Options. Contact Us Today. Before opening our law firm in 2006, our attorneys worked for some of the state’s, and nation’s, largest law firms, and worked representing the insurance companies for years. Our attorneys are now uniquely positioned to use that experience to assist individuals and businesses alike throughout Florida with their insurance claims. As a result, our attorneys are well versed in the impact insurance has on businesses, condominiums, and individuals alike. Our insurance litigation practice group is prepared to tackle your insurance claim. Given our extensive experience litigating for, and against, insurance companies, our insurance litigation practice group is prepared to provide aggressive, efficient and effective representation on a broad spectrum of insurance claims in Florida for local, national, and international clients. We are prepared to advocate insurance claims at the pre-suit stage, trial, appellate and arbitration levels. Call us today toll free at 1-866-518-2913 or at 305-263-7700.

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