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5th DCA Rules in Favor of Homeowner on ACV Issue

Florida’s Fifth District Court of Appeal today reversed a Hernando County judge’s ruling excluding evidence of subsequent payments made by an insurance company after suit had been filed in Jesse Sanchez v. Tower Hill Signature Insurance Company, 40 Fla. L. Weekly D2748a (Fla. 5th DCA December 11, 2015).  Burnett Law, P.A.’s Joshua E. Burnett and Matthew L. Wilson tried the case back in November 2013.  The case dates all the way back to 2009 when Mr. Sanchez noticed damage to his home consistent with sinkhole activity.  After timely reporting the damage to his insurance company (Tower Hill), a sinkhole investigation took place.  After determining sinkhole activity was present, Tower Hill agreed to do some subsurface repairs and sent Mr. Sanchez a check in the amount of $15,106.37 for above-ground damages based on an adjuster’s estimate.

Understandably, Mr. Sanchez did not believe that $15,106.37 was sufficient to cover the above-ground damages, so he retained a company named APT to prepare an above-ground estimate.  APT’s estimate far exceeded the amount that Tower Hill paid Mr. Sanchez, but Tower Hill refused to pay any additional money.  Accordingly, Mr. Sanchez sued Tower Hill alleging, among other things, that Tower Hill had failed to pay all benefits due to Mr. Sanchez.  A month and a half before Tower Hill filed its answer, Tower Hill hired a contractor to prepare another estimate.  That estimate was $31,070.72.  Tower Hill answered the Complaint and denied that any payments were due and owing.  Approximately nine months after filing its answer, Tower Hill remitted two additional checks to Mr. Sanchez totaling an additional $16,001.91.  The checks were sent with a cover letter stating that the payments were additional amounts for the actual cash value of cosmetic repairs.

At the trial, the judge did not allow Mr. Sanchez’s attorneys to discuss the additional payments, finding that the payments were evidence of an offer to compromise a claim.  Further, the verdict form indicated that Mr. Sanchez could only prove that Tower Hill had breached the policy of insurance by failing to pay the actual cash value (ACV) of the damaged property at the time of the sinkhole loss.  Both of these rulings were strongly objected to by Mr. Burnett and Mr. Wilson.

As to both of these issues, the Fifth District Court of Appeal reversed and remanded to the trial court for further proceedings.  First, the appellate court held, “We conclude that the trial court erred in its utilization of the ‘at the time of the sinkhole loss’ language.  The policy issued by Tower Hill contains no such limitation. … The trial court’s instruction wrongly suggested to the jury that Tower Hill’s obligation was limited to paying for only those damages that had manifested themselves on or about the date Sanchez made his claim.”

“Furthermore, the harm caused by the erroneous jury instruction and verdict form was compounded by the erroneous exclusion of evidence of post-suit payments tendered by Tower Hill.”



The appellate court further held that the erroneous instruction was compounded by the trial court’s erroneous exclusion of evidence of post-suit payments tendered by Tower Hill.  “[T]here was no language in the cover letter sent with the post-suit checks or on the checks themselves that would support a finding that the tendered monies evidenced an offer to compromise Sanchez’ claim. … As such, they could be construed as an admission by Tower Hill that the above-ground damages were greater than that initially estimated by [the adjuster].”

The appeal in this matter was handled by George Vaka and Nancy Lauten of the Vaka Law Group.  We applaud them on a job well done.  Please see a copy of the full opinion below.

Jesse Sanchez v. Tower Hill Signature Insurance, Etc.