Thursday, August 17, 2017

Torts -- Premises liability -- Slip and fall -- Plaintiff who slipped and fell on water or liquid by shopping cart retrieval area in front of defendant's store filed single count complaint alleging defendant breached its duty of care to plaintiff as a business invitee by failing to adequately and properly operate and maintain the area, thereby creating a dangerous condition or trap -- Knowledge of dangerous condition-- Genuine factual issues remain


27 Fla. L. Weekly Fed. D7aTop of Form

Torts -- Premises liability -- Slip and fall -- Plaintiff who slipped and fell on water or liquid by shopping cart retrieval area in front of defendant's store filed single count complaint alleging defendant breached its duty of care to plaintiff as a business invitee by failing to adequately and properly operate and maintain the area, thereby creating a dangerous condition or trap -- Knowledge of dangerous condition -- Construing all justifiable inferences in plaintiff's favor, genuine issues of material fact remain that preclude entry of summary judgment in favor of defendant -- Genuine factual issues remain, for example, regarding whether and when defendant had constructive knowledge of the liquid on the floor, or whether the liquid existed at the subject location for such a length of time that defendant should have known about it, and whether dangerous conditions occurred at this area such that defendant should have anticipated the dangerous condition that caused plaintiff's injury -- Subsequent trial should not be limited to the aforementioned examples

YVONNE GARDNER, Plaintiff, v. TARGET CORPORATION, Defendant. U.S. District Court, Southern District of Florida. Case No. 16-80743-CIV-ZLOCH. July 27, 2017. William J. Zloch, Sr. Judge. Counsel: Peter A. Dyson, Metnick, Levy & Dyson, Delray Beach, for Plaintiff. Jon Derrevere, Derrevere Hawkes Black & Cozad, West Palm Beach, for Defendant.

ORDER

THIS MATTER is before the Court upon Defendant Target Corporation's Motion For Final Summary Judgment (DE 39). The Court has carefully reviewed said Motion, the entire court file and is otherwise fully advised in the premises.

Plaintiff Yvonne Gardner (hereinafter “Plaintiff”) initiated the above-styled cause with the filing of a Complaint (DE 1-2) in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, and Defendant Target Corporation (hereinafter “Defendant”) removed this case to this Court. See DE 1. In the sole Count of the Complaint (DE 1-2), Plaintiff alleges that Defendant breached its duty of care to Plaintiff, a business invitee, by failing to adequately and properly operate and maintain its shopping cart retrieval area free from liquid and therefore by creating a dangerous condition or trap; by failing to inspect, discover, and correct this dangerous condition; by failing to give notice of this dangerous condition; and, by failing to instruct its employees as to safety measures and precautions. As a direct and proximate result of Defendant's negligence, Plaintiff alleges various damages due to her injuries. By its instant Motion For Summary Judgment (DE 39), Defendant argues that Plaintiff has produced no evidence to meet her burden of demonstrating that it had actual knowledge of the liquid on the floor or constructive knowledge that this dangerous condition existed for such a length of time that it should have known of the liquid with the exercise of ordinary care. Defendant submits that Plaintiff has likewise failed to produce evidence of the regularity of this dangerous condition such that it would have been foreseeable.

I. Background

Plaintiff slipped and fell on water or liquid by the shopping cart retrieval area in the front of Defendant's store in West Palm Beach on October 13, 2015.1 Before the fall, Plaintiff did not see liquid on the floor. Plaintiff describes the liquid on the floor differently from employees of Defendant who observed the liquid, none of these employees admitting to having actually seen the liquid prior to Plaintiff's fall. Video footage captures Plaintiff's fall at 11:25 a.m., and additionally, includes footage from thirty minutes before and after the fall. The video does not show any source of the liquid which caused Plaintiff's fall. Descriptions of the exact size of the puddle of water vary. Plaintiff remembers its color differently from Defendant's employees, who describe it as clear liquid, free from debris. Dennis Morford, an employee of Defendant was working at a pizza counter diagonally across the main aisle from the cart area at a distance of approximately fifteen feet, and while he did not see liquid on the floor prior to the fall, after Plaintiff's fall, he saw the puddle on the floor from his position behind the pizza counter. Another of Defendant's employees present on the day of the accident, Joseph Romano,2 noted that the area where Plaintiff fell gets wet from rain and spills. It was not raining on the day in question. Mr. Moreford was the first of Defendant's employees to respond to the accident, and he was followed by Ben Richter, the acting store manager.

II. Standard of Review

Under Federal Rule of Civil Procedure 56(a), summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The party seeking summary judgment

always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quotation omitted). “An issue of fact is ‘material' if, under the applicable substantive law, it might affect the outcome of the case. An issue of fact is ‘genuine' if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party.” Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1259-60 (11th Cir. 2004) [17 Fla. L. Weekly Fed. C195a] (citing Allen v. Tyson Foods, 121 F.3d 642, 646 (11th Cir. 1997)) (further citations omitted). “Only when that burden has been met does the burden shift to the non-moving party to demonstrate that there is indeed a material issue of fact that precludes summary judgment.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991); Avirgan v. Hull, 932 F.2d 1572, 1577 (11th Cir. 1991). “If the movant succeeds in demonstrating the absence of a material fact, the burden shifts to the non-movant to show the existence of a genuine issue of fact.” Burger King Corp. v. E-Z Eating, 41 Corp., 572 F.3d 1306, 1313 (11th Cir. 2009) [21 Fla. L. Weekly Fed. C1973a] (citing Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1116 (11th Cir. 1993)).

The moving party is entitled to “judgment as a matter of law” when the non-moving party fails to make a sufficient showing of an essential element of the case to which the non-moving party has the burden of proof. Celotex Corp., 477 U.S. at 322; Everett v. Napper, 833 F.2d 1507, 1510 (11th Cir. 1987). All justifiable inferences are to be drawn in the light most favorable to the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

III. Discussion

The Court applies Florida law to this case over which the Court exercises its diversity jurisdiction. Garcia v. Wal-Mart Stores, Inc., No. 6:14-cv-255-0r1-40TBS, 2015 WL 898582, at *2 (M.D. Fla. Mar. 3, 2015) (citing Pendergast v. Sprint Nextel Corp., 592 F.3d 1119, 1132-33 (11th Cir. 2010) [22 Fla. L. Weekly Fed. C380b]. “The elements of negligence are: (1) a duty to the plaintiff; (2) the defendant's breach of that duty; (3) injury to the plaintiff arising from the defendant's breach; and (4) damage caused by the injury to the plaintiff as a result of the defendant's breach of duty.” Delgado v. Laundromax, Inc., 65 So.3d 1087, 1089 (Fla. Dist. Ct. App. 2011) [36 Fla. L. Weekly D1270a] (citing Westchester Exxon v. Valdes, 524 So.2d 452, 454 (Fla. Dist. Ct. App. 1988). In addition, the business owner owes specific duties to the business invitee, such as the Plaintiff in this case: to take ordinary reasonable care to maintain a safe premise and to warn of known perils or perils of which it should have known that an invitee could not discover. Id. (citing Westchester Exxon, 524 So.2d at 455). In 2010, Florida repealed and replaced a statute which defines the proof required for a breach of duty involving an accident caused by a transitory substance, such as liquid on the floor, in this case. That statute states:

(1) If a person slips and falls on a transitory foreign substance in a business establishment, the injured person must prove that the business establishment had actual or constructive knowledge of the dangerous condition and should have taken action to remedy it. Constructive knowledge may be proven by circumstantial evidence showing that:

(a) The dangerous condition existed for such a length of time that, in the exercise of ordinary care, the business establishment should have known of the condition; or

(b) The condition occurred with regularity and was therefore foreseeable.

(2) This section does not affect any common-law duty of care owed by a person or entity in possession or control of a business premises.

Fla. Stat. § 768.0755. “When considering whether there is an issue of fact for submission to a jury in transitory foreign substances cases, courts look to the length of time the condition existed before the accident occurred.” Wilson-Greene v. City of Miami, 208 So.3d 1271, 1275 (Fla. Dist. Ct. App. 2017) [42 Fla. L. Weekly D237a]. The length of time a liquid remained on the floor relates to whether a Defendant had constructive knowledge of that substance even if, as in this case, actual knowledge has not been established or acknowledged by Defendant. As to the other method of establishing that Defendant should have known of the dangerous condition, covered in section (b) of the above-cited statute, one court addressing the issue, noted that, “While none of the deposition testimony offered by [plaintiff] establishes how the substance that caused [plaintiff's] accident came to be on the dance floor, each deponent testified that patrons in the dance room where the fall occurred routinely took drinks onto the dance floor, which commonly resulted in spills on the dance floor.” Feris v. Club Country of Fort Walton Beach, Inc., 138 So.3d 531, 534 (Fla. Dist. Ct. App. 2014) [39 Fla. L. Weekly D922a].

Construing all justifiable inferences in Plaintiff's favor as it must, the Court finds that there remain genuine issues of material fact in dispute that preclude the entry of summary judgment. For example, genuine factual issues remain regarding whether and when Defendant had constructive knowledge of the liquid on the floor, or whether the liquid existed at the subject location for such a length of time that Defendant should have known about it. Additionally, it remains disputed whether dangerous conditions occurred at this area such that Defendant should have anticipated the dangerous condition that caused Plaintiff's injury. Reference by the Court to the aforementioned examples should not be construed to limit a subsequent trial to these issues alone.

Accordingly, after due consideration, it is

ORDERED AND ADJUDGED that Defendant Target Corporation's Motion For Final Summary Judgment (DE 39) be and the same is hereby DENIED.

__________________

1The following facts are taken from Defendant's Statement Of Material Facts, contained within its Motion For Final Summary Judgment (DE 39) and Plaintiff's Response To Defendant's Statement Of Material Facts And Additional Material Facts (DE 44). In addition, the Court has also viewed the video footage of the incident. DE 63.

2Mr. Romano is described as an individual with special needs, but he provided deposition testimony referenced by both Parties. The Parties dispute his ability to understand the nature and purpose of providing testimony at his deposition.

* * *

Insurance -- Commercial property -- Excess policy covering four hotels having a specific per-occurrence limit, with payout not to exceed the listed value of each of the four insured hotels, was not ambiguous because “statement of values,” which included listed insured value of each of the hotels, was not attached to the excess policy and was not titled “Statement of Values” -- Excess policy was not “illusory” because it valued one of the insured hotels at an amount which equaled the total value covered and payable under primary policy


42 Fla. L. Weekly D1797aTop of Form

Insurance -- Commercial property -- Excess policy covering four hotels having a specific per-occurrence limit, with payout not to exceed the listed value of each of the four insured hotels, was not ambiguous because “statement of values,” which included listed insured value of each of the hotels, was not attached to the excess policy and was not titled “Statement of Values” -- Excess policy was not “illusory” because it valued one of the insured hotels at an amount which equaled the total value covered and payable under primary policy -- Statement of values was incorporated by reference in the excess policy and sufficiently authenticated -- Trial court did not err in using extrinsic evidence to resolve factual question as to whether document titled “Property Spreadsheet” was the latest statement of values on file with insurer -- Excess policy was not illusory, despite significant limitations on coverage, where the limitations did not render policy absurd or completely contradict insuring provisions

THE WARWICK CORPORATION, ALL SUNNY HOTELS, INC., and H.E.S. HOTELS CORP., Appellants, v. MATTHEW TURETSKY, ALLIANT INSURANCE SERVICES, INC., SWETT & CRAWFORD OF ILLINOIS, INC., CHUBB CUSTOM INSURANCE COMPANY, and LANDMARK AMERICAN INSURANCE COMPANY, Appellees. 4th District. Case No. 4D16-2567. August 16, 2017. Appeal from the Circuit Court for the Seventeenth Judicial Circuit, Broward County; Jack Tuter, Judge; L.T. Case No. 10-47258 CACE (07). Counsel: Joel D. Eaton of Podhurst Orseck, P.A., Miami, and Blaut Weiss Law Group, Plantation, for appellants. Lauren D. Levy of Levy Law Group, Coral Gables, for appellee Landmark American Insurance Company.

(LEVINE, J.) Appellants have two insurance policies for their four hotels. The primary policy limit is $5,000,000 per occurrence and the excess policy limit is $21,035,000 per occurrence, with the excess policy payout not to exceed the listed value of each of the four insured hotels. Appellants argue the excess policy is ambiguous because the “statement of values,” which includes the listed insured value of each of the four hotels, is not attached to the excess insurance policy and is not titled “Statement of Values.” Appellants also claim the excess policy is “illusory” because one of the four insured hotels is valued at $5,000,000, which would equal the total value covered and payable under the primary policy.

We conclude that the policy is unambiguous because the “Statement of Values” was incorporated by reference in the excess policy and sufficiently authenticated. We also conclude that the excess policy is not illusory because the terms of the excess policy do not “completely contradict” each other, and does not completely negate the entirety of coverage it purportedly provides. We affirm the trial court's summary judgment to that effect.

Appellants, The Warwick Corporation, All Sunny Hotels, Inc., and H.E.S. Hotels Corp. (collectively “Warwick”), had a primary insurance policy with Chubb Insurance Company for $5,000,000, which covered three hotels in New Orleans, Louisiana; Fort Lauderdale, Florida; and Deerfield Beach, Florida.

Warwick also had an excess insurance policy with Landmark American Insurance Company. The excess policy insured the three hotels referenced above as well as an additional hotel located in St. Thomas in the Virgin Islands. The excess policy insured the four properties for “$21,035,000 Per Occurrence not to exceed values reported,” and covered “All Risk Excluding Flood, Earth Movement and Windstorm/Hail.” The excess policy also contained the following Schedule Limit of Liability endorsement:

It is understood and agreed that the following special terms and conditions apply to this policy:

1. In the event of loss hereunder, liability of the Company shall be limited to the least of the following in any one “occurrence”:

. . . .

b. 100% of the individually stated value for each scheduled item of property insured at the location which had the loss as shown on the latest Statement of Values on file with this Company, less applicable deductibles and primary and underlying excess limits. If no value is shown for a scheduled item then there is no coverage for that item . . . .

No “statement of values” was attached to the Landmark Policy. However, when Warwick's insurance agent marketed the policy to insurers, the agent used a spreadsheet titled “Property Spreadsheet” to represent the value of the four properties and transmitted the spreadsheet to wholesale brokers and Landmark. The agents, brokers, and Landmark all agreed the spreadsheet was a statement of values. The latest version of the alleged statement of values on file with Landmark stated the total value of the New Orleans hotel was $5,000,000; the value of the Fort Lauderdale hotel was $7,035,000; the value of the Deerfield Beach hotel was $2,000,000; and the value of the St. Thomas hotel was $12,000,000. The total value of the properties was $26,035,000. The excess coverage for the New Orleans hotel was “shell coverage,” as requested by Warwick, that covered only the building.

Landmark used the alleged statement of values to calculate the Landmark Policy's premium. Landmark decided to charge the minimum premium, $2,625, to insure the New Orleans property because triggering the policy would require that a single occurrence damage both the New Orleans property and at least one other property.1

Warwick subsequently suffered a loss at the New Orleans hotel that it alleged was in excess of the primary policy. Landmark claimed it was not liable because the policy stated Landmark was liable only for the property's value, $5,000,000, less the primary insurance, also $5,000,000.

Warwick sued Landmark for a declaratory judgment and breach of contract, claiming Landmark was liable under the excess policy.2 Both Warwick and Landmark moved for summary judgment. Warwick argued the Landmark Policy was ambiguous because the property spreadsheet used as the statement of values was not titled “Statement of Values,” and Landmark could not cure this ambiguity with extrinsic evidence. Warwick alternatively argued the Landmark Policy was illusory because it did not provide coverage for the New Orleans hotel. Landmark argued that it had sufficiently authenticated the latest statement of values, which was incorporated by reference, and that it was not liable under the unambiguous terms of the excess policy.

The trial court granted Landmark's motion for summary judgment. The trial court found that Landmark's policy incorporated the statement of values by reference and that the unambiguous terms of the policy indicated that Landmark was not liable. The trial court refused to rewrite the policy to create liability.

On appeal, Warwick reiterates the argument it made at trial and states the trial court erred in considering extrinsic evidence to resolve the allegedly ambiguous policy.

We review the trial court's grant of summary judgment de novo. See Volusia Cty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000).

Landmark's policy is clearly unambiguous. A contract is ambiguous where the language at issue “is reasonably susceptible to more than one interpretation.” Lambert v. Berkley S. Condo. Ass'n, 680 So. 2d 588, 590 (Fla. 4th DCA 1996). The terms of Landmark's policy are not “reasonably susceptible to more than one interpretation.” See id. The policy states that the “Limit Insured” is “$21,035,000 Per Occurrence not to exceed values reported.” (emphasis added). An endorsement to the policy states Landmark's liability is limited to “100% of the individually stated value for each scheduled item of property insured at the location which had the loss as shown on the latest Statement of Values on file with [Landmark], less applicable deductibles and primary and underlying excess limits.” (emphasis added). Thus, the policy has a total limit of liability of $21,035,000, but liability for each scheduled item is limited to that item's individual value.

The fact that the “statement of values” is not titled as such and is not attached to the policy does not render the policy ambiguous. An outside document may be incorporated by reference into a contract. See BGT Grp., Inc. v. Tradewinds Engine Servs., LLC, 62 So. 3d 1192, 1194 (Fla. 4th DCA 2011). This outside document must be authenticated, and authenticity is a question of fact. See § 90.901, Fla. Stat. (2016). (stating that authentication requires the proponent of the evidence to offer evidence “to support a finding that the matter in question is what its proponent claims”); Sunbelt Health Care v. Galva, 7 So. 3d 556, 559-60 (Fla. 1st DCA 2009). Thus, we find no error in the trial court using extrinsic evidence to resolve the factual question of whether the document titled “Property Spreadsheet” was the latest statement of values on file with Landmark.3

We next consider whether the Landmark Policy is illusory because it does not provide the coverage that Warwick claimed it obtained.

“When limitations or exclusions completely contradict the insuring provisions, insurance coverage becomes illusory.” Purrelli v. State Farm Fire & Cas. Co., 698 So. 2d 618, 620 (Fla. 2d DCA 1997). Thus, “[a]n insurance policy cannot grant rights in one paragraph and then retract the very same right in another paragraph called an ‘exclusion.' ” Tire Kingdom, Inc. v. First S. Ins. Co., 573 So. 2d 885, 887 (Fla. 3d DCA 1990). Where a policy contains internally inconsistent language, a court must “adopt[ ] . . . the construction [of the policy] that will afford the most coverage.” Id. See also Zucker For BankUnited Fin. Corp. v. U.S. Specialty Ins. Co., 856 F.3d 1343, 1352 (11th Cir. 2017) (“So when a policy exclusion does swallow up an insuring provision, the Florida Courts conclude that the policy is ambiguous, and resolve that ambiguity by ignoring the exclusion.”) (citations omitted).

A policy is illusory only if there is an internal contradiction that completely negates the coverage it expresses to provide. For example, in Purrelli, the policy purported to cover certain intentional torts, but excluded intended acts. 698 So. 2d at 619. This policy was illusory as it was effectively “complete nonsense.” Id. at 620 (citation omitted); see also Princeton Express v. DM Ventures USA LLC, 209 F. Supp. 3d 1252, 1260 (S.D. Fla. 2016) (stating a policy was illusory where it stated it covered advertising injury and also stated advertising injury was excluded); Certain Underwriters at Lloyds, London Subscribing to Policy No. SA 10092-11581 v. Waveblast Watersports, Inc., 80 F. Supp. 3d 1311, 1318-19 (S.D. Fla. 2015) (finding policy illusory where it covered parasailing but excluded watercrafts).

On the other hand, where a limitation on coverage does not “completely swallow[ ] the insuring provision,” the policy is not illusory. See Auto-Owners Ins. Co. v. Christopher, 749 So. 2d 581, 582 (Fla. 5th DCA 2000). For example, in Interline Brands, Inc. v. Chartis Specialty Insurance Co., 749 F.3d 962 (11th Cir. 2014), the insured, a product distribution and marketing corporation, purchased a policy that covered advertising injury. However, the policy excluded advertising injury “arising out of or resulting from, caused directly or indirectly, in whole or in part by, any act that violates any statute, ordinance or regulation of any federal, state or local government.” Id. at 964. The insured was sued for sending junk faxes in violation of federal law and the insurer denied coverage. The Eleventh Circuit held the policy was not illusory because

the Exclusion only excludes from coverage violations of a statute, ordinance, or regulation (i.e. not common law) and only in relation to “sending, transmitting or communicating of any material or information.” While this is a significant Exclusion (especially in light of Interline's business), it does not render the policy absurd or completely contradict the insuring provisions.

Id. at 967; see also Colony Ins. Co. v. Total Contracting & Roofing, Inc., No. 10-23091-CIV, 2011 WL 4962351, *5 (S.D. Fla. Oct. 18, 2011) (stating that for the policy in that case to be illusory it “would need to expressly cover damages from hazardous materials and simultaneously exclude damages arising from hazardous materials”).

In the instant case, the policy's terms do not “completely contradict” one another like the terms in Purrelli. See Purrelli, 698 So. 2d at 619. Although the limitations on triggering the excess policy are “significant,” these limitations do not “render the policy absurd or completely contradict the insuring provisions.” See Interline Brands, Inc., 749 F.3d at 967.

We recognize that Landmark will not, barring extraordinary circumstances, normally be liable for damages to the New Orleans hotel because significant distances separate it from the other insured properties and the policy excludes wind, water, and earth movement. Nevertheless, Landmark proposed at oral argument several examples for which it could be liable under the policy. For example, arson, riots, or any of the covered actions committed by a conspiracy could damage multiple properties and invoke coverage. Although such circumstances are unlikely, Warwick, a sophisticated business entity, paid a minimal premium for such minimal coverage. Warwick also purchased coverage for the New Orleans hotel as part of an umbrella insurance policy that insured and covered the four listed hotels. Warwick “chose to buy the policy that it bought. It cannot change that choice now . . . .” See Zucker, 856 F.3d at 1353.

In summary, we affirm the trial court's entry of summary judgment, and conclude the policy was unambiguous and was not illusory.

Affirmed. (CONNER, J., and SMALL, LISA, Associate Judge, concur.)

__________________

1Including taxes, Warwick paid $6,654.50 to insure the New Orleans hotel. Landmark claims that Warwick received a discount on the policy by lumping the New Orleans hotel with the other insured properties.

2Warwick also sued the primary insurer, Chubb, and Warwick's insurance agents and brokers. Warwick settled with Chubb, and the trial court stayed proceedings against the agents and brokers.

3Warwick does not argue the trial court erred when it concluded no questions of fact existed towards the statement of values' authenticity.

Insurance -- Homeowners -- Sinkhole loss -- Trial court erred in entering directed verdict against insurer awarding homeowners damages for subsurface remediation in sinkhole action after refusing to consider testimony of insurer's expert engineers and neutral evaluator regarding proper method of subsurface repair -- Proper method of repair was jury question given conflicting evidence on this issue


42 Fla. L. Weekly D1786aTop of Form

Insurance -- Homeowners -- Sinkhole loss -- Trial court erred in entering directed verdict against insurer awarding homeowners damages for subsurface remediation in sinkhole action after refusing to consider testimony of insurer's expert engineers and neutral evaluator regarding proper method of subsurface repair -- Proper method of repair was jury question given conflicting evidence on this issue

OMEGA INSURANCE COMPANY, Appellant, v. WILLIAM WALLACE and JOAN WALLACE, husband and wife, Appellees. 2nd District. Case No. 2D16-449. Opinion filed August 16, 2017. Appeal from the Circuit Court for Polk County; John M. Radabaugh, Judge. Counsel: Scot E. Samis of Traub Lieberman Straus & Shrewsberry, LLP, St. Petersburg, for Appellant. Richard N. Asfar and George A. Vaka of Vaka Law Group, P.L., Tampa and Richard T. Heiden of Richard T. Heiden, P.A., Clearwater, for Appellees.

(SILBERMAN, Judge.) Omega Insurance Company seeks review of a final judgment awarding William and Joan Wallace just over $200,000 for subsurface remediation in their sinkhole action. The final judgment was based on a directed verdict entered after the trial court refused to consider the testimony of Omega's expert engineers and the neutral evaluator regarding the proper method of subsurface repair. We conclude that the proper method of subsurface repair is a jury question and reverse.

This appeal arises from a sinkhole insurance claim under a policy issued by Omega to the Wallaces in August 2010. Much of the argument on appeal, as in the trial court, concerns expert testimony and the proper definition of certain terms used in the Omega policy. The policy contains a sinkhole loss coverage endorsement which provides, in pertinent part, as follows:

B. COVERAGE

We insure for direct physical loss to property covered under Section I caused by a Sinkhole Loss, including the costs incurred to:

1. Stabilize the land and building; and

2. 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.

(Emphasis added.) It also provides the following definitions:

“Sinkhole Activity” means settlement or systematic weakening of the earth supporting such property only when such settlement or systematic weakening results from movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of water on a limestone or similar rock formation.

“Sinkhole Loss” means structural damage to the building, including the foundation, caused by Sinkhole Activity. Personal property coverage shall apply only if there is structural damage to the building caused by Sinkhole Activity.

(Emphasis added.) The endorsement thus provides coverage for direct physical loss to covered property due to a “Sinkhole Loss” as defined in the policy. While the policy defines “Sinkhole Loss” as “structural damage to the building, including the foundation,” it does not define the term “structural damage.”1

After an initial flurry of expert reports, Omega agreed that there was a sinkhole loss and extended coverage. As is often the case with sinkhole claims, the dispute between the parties mainly concerned the proper method of subsurface repair. Omega retained an engineering firm that recommended compaction grouting to stabilize the subsurface soil and to remediate the sinkhole conditions. The Wallaces obtained a subsurface repair protocol from another engineering firm that recommended underpinning in addition to compaction grouting. Omega then requested neutral evaluation,2 and the neutral evaluator concluded that there was no need for underpinning in addition to compaction grouting.

Despite the neutral evaluator's recommendation, the Wallaces submitted a contract for subsurface repair including compaction grouting and underpinning. When Omega refused to pay, the Wallaces sued Omega for breach of contract. In count four of the operative complaint, the Wallaces alleged that Omega breached the policy by refusing to make payment on the repair contract.

At trial, the Wallaces offered the expert testimony of engineer Sonny Gulati of Florida Testing and Environmental, Inc. (“FTE”). Gulati concluded that there had been structural damage to the building and foundation of the Wallace residence constituting a “Sinkhole Loss” as defined by the policy. Gulati applied the engineering definition of “structural damage,” which required that the load-carrying capability of the foundation be compromised. He concluded that the remediation should include both compaction grouting and underpinning.

Omega offered the expert testimony of two engineers from SDII Global Corporation and the neutral evaluator. While the neutral evaluator concluded there was damage to the structure, he was not asked to give an opinion on whether there was a “Sinkhole Loss” as defined by the policy. The SDII engineers concluded there was a “Sinkhole Loss,” but they applied the definition of structural damage that was used by the insurance industry and some courts.3 This definition of structural damage only required damage to the structure rather than compromise of the load-carrying capability of the foundation. The SDII engineers and the neutral evaluator also characterized the damage as “cosmetic” because it could be repaired without repairing the foundation or load-bearing portions of the structure. They agreed with Gulati that compaction grouting was necessary for remediation, but they did not believe the damage was significant enough to require underpinning.

At the close of Omega's case, the Wallaces moved for a directed verdict on count four of the amended complaint, arguing that Gulati's opinion established the method of subsurface repair as a matter of law. According to the Wallaces, the policy contained language requiring that any subsurface repair protocol be recommended by a “professional engineer who verifies the presence of a Sinkhole Loss.” They asserted that their expert, Gulati, was the only professional engineer who verified that there was a “Sinkhole Loss” using what they claimed to be the proper definition of structural damage, which was the engineering definition.

Omega's counsel responded that the defense experts also found a “Sinkhole Loss” for which the policy provides coverage. Counsel maintained that in light of the conflicting expert testimony as to the proper method of repair, that issue was appropriate for resolution by the jury. Counsel added that under the Wallaces' strained interpretation of the policy, Gulati's opinion testimony on behalf of the Wallaces could not even be considered. According to counsel, the policy contained language requiring that any subsurface repair protocol be prepared “in compliance with Florida sinkhole testing standards.” Counsel asserted that Gulati's protocol could not have met this standard because he did not perform any testing at the Wallace residence. Counsel stated that if the court were inclined to grant the Wallaces' motion for directed verdict, then Omega should be permitted to amend its pleadings to deny coverage. Counsel reiterated that was not the preferred option as “we want to fix the house.”

The trial court granted the Wallaces a directed verdict on count four and denied Omega's motion to amend the pleadings. The court ultimately entered a final judgment awarding the Wallaces $207,628.96 (the full amount of the policy plus prejudgment interest). The court denied Omega's motions for rehearing and new trial and Omega's renewed motion to require a contract for repair as a condition of subsurface repair benefits.4

On appeal, Omega asserts that the trial court erred in granting the Wallaces' motion for directed verdict, denying its request to amend its pleadings, and denying its motion to require a contract for repair as a condition of subsurface repair benefits. We conclude that the trial court erred in granting a directed verdict in favor of the Wallaces on the proper method of repair and reverse. This holding renders the remaining issues moot.

This court conducts a de novo review of orders granting directed verdicts. Jackson Hewitt, Inc. v. Kaman, 100 So. 3d 19, 27 (Fla. 2d DCA 2011). The issue that gave rise to the directed verdict is a matter of contract interpretation. The Wallaces relied on the portion of the sinkhole endorsement providing coverage for sinkhole damages “[i]n 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.” (Emphasis added.) The Wallaces asserted that, under this provision, a subsurface repair protocol may be used only if it is recommended by a “professional engineer who verifies the presence of a Sinkhole Loss” using the engineering definition of “structural damage.”

The Wallaces also relied on the portion of the sinkhole endorsement that defines “Sinkhole Loss” as “structural damage to the building, including the foundation, caused by Sinkhole Activity.” They successfully convinced the trial court that the opinion of their expert was unrefuted as to the existence of structural damage and a sinkhole loss. They claimed that a directed verdict in their favor was appropriate because SDII and the neutral evaluator refused to agree that there was “structural damage to the building” using the engineering definition of “structural damage” and, therefore, did not “verif[y] the presence of a Sinkhole Loss.”

There is nothing in the plain language of the insurance policy's sinkhole endorsement that requires the use of a particular definition, to the exclusion of other definitions, to determine the existence of “structural damage” in order to provide an opinion on the proper method of subsurface repair. To uphold the directed verdict below, this court would have to read additional language into the policy.5 Cf. Roker v. Tower Hill Preferred Ins. Co., 164 So. 3d 690, 693 (Fla. 2d DCA 2015) (holding that a statute requiring the insurer to pay for repair “in accordance with the recommendations of the professional engineer” did not “require the insured to enter into a contract for the subsurface repairs recommended by the insurer's engineer to the exclusion of any other professional recommendations”).

Omega's expert engineers agreed that the Wallaces had a covered sinkhole loss based on damage to the structure, even though they disagreed as to the precise definition to be given to the term “structural damage” and the appropriate method of repair. The testimony of Omega's experts that there had been a sinkhole loss based on sinkhole activity that damaged the Wallace's residence was consistent with the terms of the policy. Thus, the trial court erred in refusing to consider that testimony.

By extending coverage for the Wallaces' “Sinkhole Loss,” Omega necessarily conceded that there had been structural damage, as contemplated by the policy, caused by “Sinkhole Activity.” Any dispute as to whether there was sufficient structural damage to constitute a “Sinkhole Loss” was rendered moot, and the only issue to be resolved at trial pertaining to subsurface damage was the proper method of repair.

Generally, the question of the proper method of subsurface repair of a home damaged by sinkhole activity is for the jury to resolve. Roker, 164 So. 3d at 694. At trial, the parties offered the testimony of four engineers, and they all agreed there was damage to the structure even though they disagreed regarding the proper method of subsurface repair. Omega's two experts from SDII and the neutral evaluator testified that compaction grouting alone was the proper protocol. The Wallaces' expert from FTE disagreed and testified that underpins should be added. Omega correctly argues that the jury should have been allowed to resolve this dispute.

We therefore reverse the final judgment and remand for a jury trial on the method of repair. We note that any judgment on remand must be consistent with the policy's loss settlement provision which only obligates Omega to pay for subsurface repairs after the insureds enter into a contract and then only obligates Omega to make payment as the work is performed. See Citizens Prop. Ins. Corp. v. Stieben, 200 So. 3d 215, 215-16 (Fla. 2d DCA 2016); Citizens Prop. Ins. Corp. v. Blaha, 194 So. 3d 411, 416 (Fla. 2d DCA 2016).

Reversed and remanded. (LaROSE, C.J., and CRENSHAW, J., Concur.)

__________________

1We note that, after the cause of action accrued in this case, the legislature adopted a five-part definition of “structural damage.” See § 627.706(2)(k), Fla. Stat. (2011); ch. 2011-39, § 22, at 570, Laws of Fla. This amendment does not apply retroactively. Sevila v. First Liberty Ins. Corp., 7 F. Supp. 3d 1226, 1230 (M.D. Fla. 2014).

2Neutral evaluation is a nonbinding method of alternative dispute resolution created specifically for sinkhole cases. § 627.7074, Fla. Stat. (2010). It is an informal proceeding in which each side presents its position to a qualified and neutral expert, who then issues a decision that is admissible at trial. § 627.7074(12), (13).

3See, e.g., Shelton v. Liberty Mut. Fire Ins. Co., 25 Fla. L. Weekly Fed. D73a (M.D. Fla. Apr. 17, 2013), and cases cited therein.

4The sinkhole endorsement contains a loss settlement provision which provides, in pertinent part:

We may limit any payment for Sinkhole Loss to the actual cash value, not including any repairs below the foundation, until you enter into a contract for building stabilization or foundation repairs. After you enter into a contract, we shall pay the amounts necessary to begin and perform such repairs as the work is performed and the expenses are incurred, without requiring you to advance payment for such repairs.

This provision is consistent with section 627.707(5)(b), Florida Statutes (2010).

5For this same reason, we find no merit in Omega's assertion that Gulati's opinion could not be considered because Gulati did not personally perform testing “in compliance with Florida sinkhole testing standards.”

Torts -- Automobile accident -- Joinder of insurer in final judgment against insured -- Trial court departed from essential requirements of law, resulting in irreparable harm, when it granted motion to join insurer in judgment against insured where motion was filed more than 15 days after judgment became final


42 Fla. L. Weekly D1781aTop of Form

Torts -- Automobile accident -- Joinder of insurer in final judgment against insured -- Trial court departed from essential requirements of law, resulting in irreparable harm, when it granted motion to join insurer in judgment against insured where motion was filed more than 15 days after judgment became final

GEICO GENERAL INSURANCE COMPANY, Petitioner, v. LISA M. NOCELLA, Respondent. 2nd District. Case No. 2D16-4696. Opinion filed August 16, 2017. Petition for Writ of Certiorari to the Circuit Court for Hillsborough County; William P. Levens, Judge. Counsel: B. Richard Young and Joshua J. Hartley of Young, Bill, Boles, Palmer, and Duke, P.A., Pensacola, for Petitioner. No appearance for Respondent.

(BADALAMENTI, Judge.) GEICO General Insurance Company seeks a writ of certiorari to quash the trial court's order joining it to the final judgment against its insured, Laura Franklin. We grant GEICO's petition for certiorari and quash the trial court's order.

Lisa M. Nocella was involved in an automobile accident with Ms. Franklin, who carried a GEICO automobile insurance policy. Ms. Nocella prevailed in a negligence action against Ms. Franklin and, on June 24, 2016, the trial court entered a final judgment awarding Ms. Nocella $222,119 in damages, reserving jurisdiction to determine attorney's fees and taxable costs. On July 26, 2016, thirty-two days after entry of the final damages judgment, Ms. Nocella moved to join GEICO as a party defendant to the judgment against Ms. Franklin pursuant to section 627.4136(4), Florida Statutes (2016). After a hearing, the trial court entered a one-sentence order granting Ms. Nocella's motion to join GEICO as a party defendant.

“To obtain a writ of certiorari, the petitioner must show (1) a departure from the essential requirements of the law, (2) resulting in material injury for the remainder of the case (3) that cannot be corrected on postjudgment appeal.” Bd. of Regents v. Snyder, 826 So. 2d 382, 387 (Fla. 2d DCA 2002).

Section 627.4136(4) states that a liability insurer may be joined as a party defendant as follows: “At the time a judgment is entered or a settlement is reached during the pendency of litigation, a liability insurer may be joined as a party defendant for the purposes of entering final judgment or enforcing the settlement by the motion of any party . . . .” Accord ACE Am. Ins. Co. v. HCP III of Bradenton, Inc., 913 So. 2d 1280, 1281 (Fla. 2d DCA 2005) (explaining that “a liability carrier may be joined at or before the time judgment is entered against its insured”).

Florida Rule of Civil Procedure 1.530(g) sets a fifteen-day deadline to move to alter or amend a judgment as follows: “A motion to alter or amend the judgment shall be served not later than 15 days after entry of the judgment . . . .” (Emphasis added.) Our court has held that both the statute and the rule apply to the joinder of insurers to judgments against their insureds. Nova Cas. Co. v. Wilson Developers, LLC, 212 So. 3d 477, 478 (Fla. 2d DCA 2017) (first citing ACE Am. Ins. Co., 913 So. 2d at 1281; then quoting C.A. Seguros Catatumbo v. Herrera, 812 So. 2d 576, 577 (Fla. 3d DCA 2002)). The latest that Ms. Nocella could have moved to join GEICO to the damages judgment was July 11, 2016.1 After the fifteen-day period set forth in rule 1.530(g) elapsed, the judgment became final and GEICO could no longer be added as a party. Nova Cas. Co., 212 So. 3d at 478 (citing Herrera, 812 So. 2d at 577-78).

Here, it is undisputed that Ms. Nocella filed her motion to join GEICO on July 26, 2016 -- thirty-two days after entry of the final judgment and fifteen days after July 11, 2016. Accordingly, she failed to satisfy both section 627.4136(4) and the fifteen-day requirement in rule 1.530(g). Therefore, the trial court departed from the essential requirements of the law by granting Ms. Nocella's motion to join GEICO to the damages judgment. See Nova Cas. Co., 212 So. 3d at 479.

The trial court's departure resulted in irreparable harm because, after fifteen days, the judgment against Ms. Franklin became final, preventing GEICO from disputing Ms. Franklin's entitlement to coverage or the amount of coverage under GEICO's policy for that matter. Id. (“The trial court departed from the essential requirements of the law by joining Nova as party to a final judgment that had been already rendered. Nova is irreparably harmed because it has been made responsible for coverage without having been given an opportunity to raise any defenses it might have to the determination of entitlement to coverage or the amount of coverage.”). Accordingly, we grant GEICO's petition for certiorari and quash the trial court's order joining GEICO to Ms. Nocella's judgment against Ms. Franklin.

Petition granted; order quashed. (VILLANTI and CRENSHAW, JJ., Concur.)

__________________

1Fifteen days from June 24, 2016, is Saturday, July 9, 2016. Accordingly, Ms. Nocella would have had until Monday, July 11, 2016, to file her motion for joinder. See generally Fla. R. Jud. Admin. 2.514(a)(1)(C) (explaining that, where the last day of a time period specified in a rule of procedure falls on a weekend or a legal holiday, the period continues to run until the next day that is not a weekend or a legal holiday).

Torts -- Automobile accident -- Insurance -- Uninsured motorist -- Trial court departed from essential requirements of law by granting uninsured motorist insurer's motion to sever claims against it from claims against alleged tortfeasor where claims were inextricably interwoven -- Appeals


42 Fla. L. Weekly D1780aTop of Form

Torts -- Automobile accident -- Insurance -- Uninsured motorist -- Trial court departed from essential requirements of law by granting uninsured motorist insurer's motion to sever claims against it from claims against alleged tortfeasor where claims were inextricably interwoven -- Appeals -- Certiorari is appropriate remedy where order severing UM claims from claims against tortfeasor may risk inconsistent outcomes and result in material injury that cannot be corrected on postjudgment appeal

JESSICA Y. CHOI, Petitioner, v. AUTO-OWNERS INSURANCE COMPANY and HALEY P. BEUTLER, Respondents. 2nd District. Case No. 2D16-4642. Opinion filed August 16, 2017. Petition for Writ of Certiorari to the Circuit Court for Hillsborough County; Elizabeth G. Rice, Judge. Counsel: Kristin A. Norse and Stuart C. Markman of Kynes, Markman & Felman, P.A., Tampa; and Joseph Bryant and A. Crosby Crane of Morgan & Morgan, Tampa, for Petitioner. Michael L. Forte of Rumberger, Kirk & Caldwell, P.A., Tampa, for Respondent Auto-Owners Insurance Company. No appearance for remaining Respondent.

(SILBERMAN, Judge.) The underlying action is an automobile negligence action filed by Jessica Y. Choi against alleged tortfeasor Haley P. Beutler and Choi's underinsured motorist (UM) insurance carrier, Auto-Owners Insurance Company. Choi seeks certiorari review of an order granting Auto-Owners' motion to sever the causes of action against the two defendants. We conclude that because all three claims were inextricably interwoven, the circuit court departed from the essential requirements of the law by granting the motion to sever. Accordingly, we grant the petition.

The automobile accident occurred in September 2014. According to the amended complaint, Choi was a passenger in a car that was struck by Beutler's vehicle. Choi was seriously injured, and Beutler was underinsured. In count one, Choi sought recovery from Beutler for the injuries she suffered in the accident under a negligence theory. In count two, Choi sought UM benefits from Auto-Owners for damages she suffered in excess of the amount covered by Beutler's insurance policy. In count three, Choi sought punitive damages against Beutler based on a claim that Beutler was intoxicated to the extent her faculties were impaired at the time of the accident.

Auto-Owners filed a motion to sever the UM claim against it from the claims against Beutler in counts one and three. Auto Owners contended that Florida's nonjoinder statute, section 627.4136(1), Florida Statutes (2014), required separate trials of Choi's claims against the tortfeasor and the UM carrier. Auto-Owners also argued it was entitled to severance under Florida Rule of Civil Procedure 1.270(b) to avoid prejudice from the jury's discovering that Choi had insurance coverage and that Beutler was intoxicated at the time of the accident. The trial court granted the motion finding “Auto-Owners' arguments to be the more logical and better reasoned view of the current state of the law and application of the rules of procedure in Florida.”

“A petitioner seeking a writ of common law certiorari ‘must establish (1) a departure from the essential requirements of the law, (2) resulting in material injury for the remainder of the trial (3) that cannot be corrected on postjudgment appeal.' ” Rogan v. Oliver, 110 So. 3d 980, 982 (Fla. 2d DCA 2013) (quoting Parkway Bank v. Fort Myers Armature Works, Inc., 658 So. 2d 646, 648 (Fla. 2d DCA 1995)). The second and third elements are jurisdictional, and the failure to establish those elements requires dismissal of the petition without considering the merits. Id.

“Certiorari is an appropriate remedy for orders severing or bifurcating claims which involve interrelated factual issues because severance risks inconsistent outcomes.” Minty v. Meister Financialgroup, Inc., 97 So. 3d 926, 931 (Fla. 4th DCA 2012) (quoting Kavouras v. Mario City Rest. Corp., 88 So. 3d 213, 214 (Fla. 3d DCA 2011)). Choi's claims against Auto-Owners and Beutler involve more than interrelated factual issues. In seeking recovery under the UM benefits available to her, Choi has in essence the same cause of action against her UM insurer, Auto-Owners, that she has against the underinsured tortfeasor, Beutler, for damages for bodily injury. See State Farm Mut. Auto. Ins. Co. v. Kilbreath, 419 So. 2d 632, 634 (Fla. 1982). Thus, an order severing Choi's UM claim against Auto-Owners from her claims against Beutler may risk inconsistent outcomes and result in material injury that cannot be corrected on postjudgment appeal.

On the merits, Choi argues that the severance order departs from the essential requirements of the law because it rests on Auto-Owners' argument that the nonjoinder statute applies to require severance. However, Auto-Owners has changed its argument from that which it presented below. It no longer asserts that the nonjoinder statute requires severance of the UM claim. Rather, it correctly recognizes that joinder is permitted under the circumstances present here. But it asserts that the trial court had the discretion to grant the motion to sever under rule 1.270(b) because the prejudice to Auto-Owners outweighs Choi's preference to have the claims tried together.

Rule 1.270(b) generally gives courts the discretion to sever claims “in furtherance of convenience or to avoid prejudice.” However, it is well-settled that it is a departure from the essential requirements of the law to sever claims that are inextricably interwoven based on the risk of inconsistent verdicts. See Rocket Grp., LLC v. Jatib, 174 So. 3d 576, 576 (Fla. 4th DCA 2015); Minty, 97 So. 3d at 931; Kavouras, 88 So. 3d at 214; Bethany Evangelical Covenant Church of Miami, Fla., Inc. v. Calandra, 994 So. 2d 478, 479 (Fla. 3d DCA 2008); Maris Distrib. Co. v. Anheuser-Busch, Inc., 710 So. 2d 1022, 1024 (Fla. 1st DCA 1998). Thus, to the extent the trial court relied on rule 1.270(b) to support its decision, it was a departure from the essential requirements of the law.

Furthermore, we note that severance would not avoid prejudice to Auto-Owners arising from the claims against Beutler. First of all, the jury would still learn that Choi had insurance coverage in the severed UM action against her insurer. Second, the jury would also learn that Beutler was intoxicated at the time of the accident in the severed UM action. As we stated previously, Choi's cause of action against Auto-Owners for damages arising from Beutler's negligence is at heart the same as her cause of action against Beutler. While Choi need not establish entitlement to punitive damages in her action against Auto-Owners, the facts regarding Beutler's alleged intoxication will be relevant to the issue of fault if Auto-Owners challenges liability, as it asserts it will. See Frazee v. Gillespie, 124 So. 6, 9-10 (Fla. 1929) (holding that the intoxication of a driver may be a basis for liability for injuries sustained as a result of an accident if the accident was caused by a negligent or wrongful act that resulted from being intoxicated).

In conclusion, the trial court departed from the essential requirements of the law by granting the motion to sever three inextricably interwoven claims. We therefore grant the petition for certiorari and quash the order granting Auto-Owners' motion to sever.

Petition granted; order quashed. (CASANUEVA and MORRIS, JJ., Concur.)

Workers' compensation -- Medical benefits -- Judge of compensation claims erred in determining that employer/carrier were not responsible for claimant's hospitalization expenses because E/C had determined that injury was not compensable before the hospitalization where claimant was not advised of denial of compensability until last day of hospitalization -- An internal intent or decision to deny a claim does not satisfy the requirement of advising claimant


42 Fla. L. Weekly D1772aTop of Form

Workers' compensation -- Medical benefits -- Judge of compensation claims erred in determining that employer/carrier were not responsible for claimant's hospitalization expenses because E/C had determined that injury was not compensable before the hospitalization where claimant was not advised of denial of compensability until last day of hospitalization -- An internal intent or decision to deny a claim does not satisfy the requirement of advising claimant -- Although, under section 440.20(4), Florida Statutes, E/C were required to pay all benefits due as if the claim had been accepted as compensable until the date of denial, E/C retained the right to challenge other issues relevant to claimant's entitlement to benefits, including major contributing cause -- Because the services provided to claimant cost more than $1,000, E/C were entitled to ten-day approval period unless emergency care was required -- Because hospitalization began and was completed in span of less than 10 days, and E/C did not expressly authorize the hospitalization or fail to respond timely to a written request for authorization, remand is required for JCC to address E/C's defenses and to determine whether hospitalization was for emergency care

BEVERLY MATHIS, Appellant, v. BROWARD COUNTY SCHOOL BOARD and THE SCHOOL BOARD OF BROWARD COUNTY, Appellees. 1st District. Case No. 1D16-3286. Opinion filed August 14, 2017. An appeal from an order of Judge of Compensation Claims. Iliana Forte, Judge. Date of Accident: March 2, 2015. Counsel: Kimberly A. Hill of Kimberly A. Hill, P.L., Fort Lauderdale, for Appellant. Kimberly J. Fernandes of Kelley Kronenberg, P.A., Tallahassee, for Appellees.

(KELSEY, J.) Claimant's foot injury was determined to be non-compensable because she failed to meet her burden of proving that the injury occurred in the course and scope of employment or arose out of her employment. She does not appeal that ruling. Rather, she argues that the Employer/Carrier (E/C) were obligated to pay for her hospitalization that occurred before the E/C denied compensability and after the E/C began providing benefits under the 120-day rule of section 440.20(4), Florida Statutes (2014). The E/C argue that they were not responsible for the hospitalization expenses because they had decided to deny compensability before the hospitalization occurred, even though they did not file a notice of denial until the hospitalization ended. The JCC accepted the E/C's argument, but we reverse on that issue. However, because the hospitalization began and was completed in a span of less than 10 days, and the E/C did not expressly authorize the hospitalization or fail to respond timely to a written request for authorization, we remand for the JCC to address the E/C's defenses and to determine whether the hospitalization was for emergency care within the meaning of the governing statutes.

Background Facts.

The background facts are not in dispute. Claimant, a custodian who is diabetic, reported to her Employer on March 5, 2015, that a nail or tack went through her right shoe the previous evening, and that her right foot was swollen and painful. One of the Employer's workers' compensation nurses spoke with Claimant at length on March 5, and referred her to Dr. Kerr, whom Claimant saw that day. The E/C invoked the 120-day rule, asserted causation and other defenses including entitlement to an evidentiary hearing before AHCA to resolve provider reimbursement issues, and continued paying Claimant's salary in lieu of paying temporary compensation benefits.

Dr. Kerr's notes reflect that on March 5, one day after the alleged foot puncture, Claimant already had an abscess on the foot, which was later confirmed to be a staph infection. Dr. Kerr's opinion was that such an infection takes more than one day to develop and could not have developed from the night before. Within four days, by March 9, the staph infection had grown worse. Dr. Kerr again advised Claimant that she did not think the infection came from the reported incident. She prepared a DWC-25 form requesting consult through the hospital emergency room for IV treatment. Claimant went to the emergency room on March 9. A podiatrist at the hospital operated on the abscess on March 11, delayed closure of the wound until March 15, and discharged Claimant on March 17. The hospital bill was just over $116,000.

The claims adjuster had spoken to Claimant on March 5, and concurred with the authorization of Dr. Kerr. The adjuster received Dr. Kerr's written referral to the hospital within ten days prior to denying the claim on March 17, but the adjuster did not authorize the hospitalization and did not find out about it until March 10. Neither the hospital nor the podiatrist notified the E/C or requested prior authorization for treatment. The E/C later asserted that the adjuster had determined on March 5 that the injury was not compensable, although the notice of denial as to compensability was not filed until March 17, the same day Claimant was discharged from the hospital. The notice of denial asserted that Claimant's injury was personal and not causally connected to her employment, based on lack of evidence of causation and Dr. Kerr's office note regarding the presence of a well-developed infection only one day after the alleged accident.

Pay And Investigate.

The “pay-and-investigate” rule of Subsection 440.20(4), Florida Statutes (2014), provides as follows (emphasis added):

If the carrier is uncertain of its obligation to provide all benefits or compensation, the carrier shall immediately and in good faith commence investigation of the employee's entitlement to benefits under this chapter and shall admit or deny compensability within 120 days after the initial provision of compensation or benefits as required under subsection (2) or s. 440.192(8). Additionally, the carrier shall initiate payment and continue the provision of all benefits and compensation as if the claim had been accepted as compensable, without prejudice and without admitting liability. Upon commencement of payment as required under subsection (2) or s. 440.192(8), the carrier shall provide written notice to the employee that it has elected to pay the claim pending further investigation, and that it will advise the employee of claim acceptance or denial within 120 days. A carrier that fails to deny compensability within 120 days after the initial provision of benefits or payment of compensation as required under subsection (2) or s. 440.192(8) waives the right to deny compensability . . . .

The E/C had three options upon being notified of the claim: pay the claim, pay and investigate, or deny the claim. See Bynum Transp., Inc. v. Snyder, 765 So. 2d 752, 754 (Fla. 1st DCA 2000). A claimant's first authorized visit to a physician begins the 120-day period. Osceola Cty. Sch. Bd. v. Arace, 884 So. 2d 1003, 1005 (Fla. 1st DCA 2004). To accept or deny a claim, the E/C must “advise the employee of claim acceptance or denial.” City of Ocoee v. Trimble, 929 So. 2d 687, 690 (Fla. 1st DCA 2006). A merely internal intent or decision to deny a claim does not satisfy the requirement of advising the employee, and therefore the denial here occurred on March 17 when the E/C advised Claimant of the denial. We reverse the JCC's ruling to the contrary. Under subsection 440.20(4), the E/C were required to pay all benefits due “as if the claim had been accepted as compensable” until the date of denial.* However, the E/C retained the right to challenge other issues relevant to Claimant's entitlement to benefits, including major contributing cause. Trimble, 929 So. 2d at 689-90; see also Sch. Dist. of Hillsborough Cty. v. Dickson, 67 So. 3d 1080, 1083 (Fla. 1st DCA 2011) (holding section 440.20(4) does not preclude E/C from challenging claimant's entitlement to benefits on other grounds particularly including major contributing cause).

Emergency Care.

The pay-and-investigate rule does not resolve this case, however. The E/C were entitled to an opportunity to give prior authorization for the care under at least two statutory provisions. First, a referral from one health care provider to another requires prior authorization under section 440.13(3)(c), Florida Statutes (2014). Second, because the services provided to Claimant cost more than $1,000, the E/C were entitled to a ten-day approval period under section 440.13(3)(i), Florida Statutes (2014), and the emergency-care exception to that ten-day period. The E/C are entitled to this approval period notwithstanding having elected to pay and investigate. This section provides as follows (emphasis added):

(i) Notwithstanding paragraph (d) [giving a carrier three days to respond to requests for treatment], a claim for specialist consultations, surgical operations, physiotherapeutic or occupational therapy procedures, X-ray examinations, or special diagnostic laboratory tests that cost more than $1,000 and other specialty services that the department identifies by rule is not valid and reimbursable unless the services have been expressly authorized by the carrier, unless the carrier has failed to respond within 10 days to a written request for authorization, or unless emergency care is required. The insurer shall authorize such consultation or procedure unless the health care provider or facility is not authorized, unless such treatment is not in accordance with practice parameters and protocols of treatment established in this chapter, or unless a judge of compensation claims has determined that the consultation or procedure is not medically necessary, not in accordance with the practice parameters and protocols of treatment established in this chapter, or otherwise not compensable under this chapter. Authorization of a treatment plan does not constitute express authorization for purposes of this section, except to the extent the carrier provides otherwise in its authorization procedures. This paragraph does not limit the carrier's obligation to identify and disallow overutilization or billing errors.

The ten-day approval period applies for services that cost more than $1,000 and other designated specialty services, “unless emergency care is required.” See also § 440.13(3)(b), Fla. Stat. (requiring emergency care providers to notify carrier by the close of the third business day after rendering emergency care). No written request for authorization in compliance with the statute was made here, no emergency care notice was given, and the E/C did not expressly authorize the treatment. Further, the E/C's March 17 denial was within ten days of the date the adjuster testified she received the written referral from Dr. Kerr for the hospitalization. Unless the emergency care exception applied, as Claimant argues it does, the E/C are not liable for the hospital bill.

The JCC found that hospitalization was considered necessary to treat Claimant's infection, but these findings do not resolve whether it was “emergency care” within the meaning of section 440.13(3)(i). We have held previously that the emergency-care exception to the ten-day rule is triggered when the care is provided for a compensable injury, is medically necessary, and constitutes “emergency” care. Cespedes v. Yellow Transp., Inc., 130 So. 3d 243, 252 (Fla. 1st DCA 2013) (relying on section 395.002, Florida Statutes (2005), which defines “emergency services and care” and “emergency medical condition”). An emergency medical condition is defined as follows:

(a) A medical condition manifesting itself by acute symptoms of sufficient severity, which may include severe pain, such that the absence of immediate medical attention could reasonably be expected to result in any of the following:

1. Serious jeopardy to patient health, including a pregnant woman or fetus.

2. Serious impairment to bodily functions.

3. Serious dysfunction of any bodily organ or part.

Cespedes, 130 So. 3d at 254 (quoting § 395.002(9)(a), Fla. Stat. (2005)).

The care here is considered compensable under the 120-day pay-and-investigate rule because the statute requires benefits to be provided during the investigatory period “as if the claim had been accepted as compensable.” § 440.20(4), Fla. Stat. The JCC here did not, however, address the E/C's other defenses or the remainder of the analysis under Cespedes, including whether the hospitalization met the definition of “emergency services and care” under section 395.002 as referenced in section 440.13(1)(e). We remand for further proceedings on these issues.

Conclusion.

We reverse the JCC's conclusion that the E/C's decision to deny the claim on March 5, not communicated to Claimant until March 17, was sufficient to avoid liability for the hospital bill. However, we remand for further proceedings on the E/C's other defenses and whether the treatment constituted emergency care.

REVERSED and REMANDED for further proceedings. (WETHERELL and MAKAR, JJ., concur.)

__________________

*It should be noted that prior to October 1, 2003, subsection 440.20(4) permitted an E/C the option of paying some benefits while they investigated the claim. Effective that date, however, the subsection was amended to its current language mandating that the carrier “initiate payment and continue the provision of all benefits and compensation as if the claim had been accepted as compensable.” Ch. 03-412, § 24, at 3934, Laws of Fla.