Florida’s Fourth DCA certifies conflict to the Florida Supreme Court on when a jury should consider replacement cost value v. actual cash value.

The plaintiffs filed a suit due to Universal’s alleged breach of the homeowners’ insurance policy when it paid only the $10,000 policy limit for the mold damage without making any payment for the damage caused by the water leak which resulted in the mold. Thereafter, the plaintiffs sold the property without repairing the damaged items described in the estimate they submitted for payment to Universal. 

Prior to trial, Universal moved in limine to preclude the plaintiffs from presenting any evidence related to either the cost of any repairs not performed prior to the sale of the property or any diminution in value to the property resulting from the covered loss. In support of its motion, Universal relied on the policy’s loss settlement provision, which does not provide payment for any diminution in value. In addition, the provision tracks Fla. Stat. § 627.7011(3)(a), which provides the insurer must initially pay at least the actual cash value of the insured loss, less any applicable deductible and, thereafter, shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred. The court granted Universal’s motion with respect to any evidence of diminution in the property but denied the remainder of the motion, which allowed the plaintiffs to present evidence concerning the estimated cost for damages caused by the loss (the replacement cost value). 

At trial, Universal renewed its motion in limine and objected to the plaintiffs’ introduction of the estimate reflecting repair costs to areas in the property that were never repaired prior to the sale, both of which the court denied. This appeal followed. 

The Fourth District Court of Appeal agreed with Universal that the trial court erred by allowing the plaintiffs to introduce into evidence at trial the estimated repair costs for work that was never performed, even though both the policy’s terms and Fla. Stat. § 627.7011(3)(a) require payment by the insurer only “as work is performed and expenses are incurred.” Further, the District Court did not rely on the Tio, from the Third District Court of Appeal, which stands for waiver or estoppel of the provision since payment was not made by the insurer. 

In addition, the court found the language in the policy is clear and unambiguous, and therefore the policy should be enforced according to its terms and declined to create insurance coverage by utilizing the doctrines of waiver or estoppel. 

The matter was reversed and remanded for a new trial on damages to only those damages for which recovery is permitted under the policy’s clear and unambiguous terms. 

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