Interpreting section 627.7015 of the Florida Statutes, which requires that disputes about first party property insurance claims be subjected to mediation before any other dispute procedure, the Florida Appellate Court reversed a lower court decision that denied State Farm’s motion to compel appraisal under a property insurance policy.  

In State Farm Florida Ins. Co. v. Unlimited Restoration, State Farm’s insured suffered water damages to his home, and he contracted with Unlimited Restoration Specialists for repairs. Under the repair contract, the insured assigned the benefits of his State Farm property policy to Unlimited, which estimated repair costs greater than those estimated by State Farm. When State Farm issued a check based on its own estimate, Unlimited refused to cash it.  

State Farm notified the insured and Unlimited of the right to statutory mediation, specifically indicating it was not seeking mediation itself. Unlimited invoked statutory mediation, but the parties failed to come to an agreement. State Farm thereafter demanded appraisal per the policy. Unlimited refused and filed suit. State Farm moved to compel appraisal, but the Florida Circuit Court denied the motion, reading the statute as precluding appraisal after an unsuccessful mediation. The decision was affirmed by the Circuit Court’s Appellate Division.  

On review, the Court of Appeal reversed, finding that the mediation statute did not preclude appraisal. The statute provides that the insurer can waive its right to appraisal after mediation in two circumstances: where it fails to notify the insured of the statutory right to mediation, or where the parties fail to agree after a mediation that the insurer has requested. Neither circumstance was present in this case.