Florida Supreme Court: Valued Policy Law requires payment only for covered portion of total loss

Remember that unholy mess down in Louisiana a few weeks back, that Landry case? That’s the Valued Policy Law case where the Louisiana Court of Appeals got more lost than those documentary filmmakers in The Blair Witch Project.  They got so lost we’re going to have to gather up their robes, have the hounds take a sniff, and send the dogs off into the swamp to find them.  If you want to refresh your memory and read about Landry, here is a post I wrote about it.  If you imbibe adult beverages, you might want to have one handy if you read the case.  Or two.  Three, tops. 

The Florida Supreme Court decided a Valued Policy Law case yesterday — Florida Farm Bureau v. Cox — that makes more sense.  Click here for a pdf of the court’s opinion. 

The state supreme court quashed the decision of the First District Court of Appeal, which had held that the Valued Policy Law requires, in the event of a total loss of the covered property, that the insurer pay the full value of the policy if a covered cause of loss formed any part of the loss. The lower court had considered the 2004 Mierzwa decision, a case by the Fourth District Court of Appeal with the same reasoning, as controlling and binding.  The outcome of cases like Mierzwa was later changed by the Florida Legislature through amendments to the state’s Valued Policy Law, but the changes applied only to the future, and not to events that had already happened, including the Cox lawsuit and any damage done in Florida by Hurricanes Katrina and Rita. 

The state supreme court — I never say "the supremes," but after Randy Maniloff of White and Williams ridiculed this expression I stay even further away from it —  went back to a case from 1904 that considered the constitutionality of the Valued Policy Law, which had been enacted in 1899.  The analysis of the 1904 decision, the court said, showed that the intent of the law was merely to fix the value of the property.  As the U.S. Fifth Circuit pointed out in the recent Chauvin v. State Farm case, such laws were enacted to prevent insurers from charging a premium based on a high value for property, but then claiming the actual value of the property was less after a loss occurred.  The face value of the policy cannot be contested by the insurer in the event of a total loss.

The Florida high court — dang, ever since Maniloff put down "the supremes," it keeps jumping into my head, I never even thought about it before — pointed out that the Valued Policy Law says nothing about causation, and so imposing a causal analysis of covered vs. uncovered causes on the plain language of the statute is judicial reordering.  The court expressly disapproved of Mierzwa, which is now dead, or as Dickie Scruggs might say, "judicial toast."  By the way, I thought Justice Charles Wells did a fine job of writing a clear, reasonably concise opinion.  This is always to be commended in legal writing, as it happens too infrequently.

If you’re interested in more about Valued Policy Law cases, here is a post where I wrote about Chauvin v. State Farm, where the court found similarly to the Florida Supreme Court.  Here is another post about the Turk v. Citizens Property case in 2006 from the U.S. District Court for Western Louisiana.  This post contains links to the Mierzwa case mentioned above, and to the Valued Policy Law statutes of both Florida and Louisiana. 

Incidentally, Maniloff’s firm held their Coverage College a couple days ago, September 19, on International Talk Like A Pirate Day.  I wonder, did the introductory speech go something like this?  "Ahoy, coverage mateys, thar be much treasure in them thar insurance policies."  Adjusters and company side lawyers — a suggestion for spicing up those denial letters.  Here’s an English-to-Pirate translator that will come in handy.  For example, why not try "We regret t’ inform ye that yer loss be nay covered under th’ terms o’ th’ policy, ye scurvy landlubber."

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