Jacek Stramski

A second challenge to the mandatory litigation stay provision in the state’s sinkhole neutral evaluation program was recently filed at the Florida Supreme Court. Bellas v. Citizens Property Ins. Corp. (SC14-1889). The Supreme Court has yet to rule on whether it will accept jurisdiction in this case, or its earlier filed companion, Hanos v. Citizens Property Ins. Corp. (SC14-1360).

Neutral evaluation, an alternative dispute mechanism under s. 627.7074, Fla. Stat., is mandatory if requested by either party (insured or insurer) to a sinkhole dispute. Following amendment to the statute in 2011, any court proceeding related to the subject matter of neutral evaluation “shall be stayed pending completion of the neutral evaluation” regardless of when the stay is noticed. Section 627.7074(10), Fla. Stat.

The facts in Bellas and Hanos are similar. Following a dispute between policyholders and the insurer as to the appropriate remediation for sinkhole damage, suit was filed against the insurer. Shortly before the scheduled trials, Citizens requested neutral evaluation. The trial courts held that the right to neutral evaluation was waived by Citizens because of the substantial pre-trial litigation it had engaged in. On petitions for a writ of certiorari and mandamus, the Second District Court of Appeal ruled that the language of the statute was clear and that a waiver of the statutory right to neutral evaluation could not be found merely because it was requested late into litigation, as set forth in its prior decision in Citizens Property Ins. Corp. v. Trapeo, 136 So.3d 670 (Fla. 2d DCA 2014).

Bellas and Hanos argue that interpreting the neutral evaluation statute as the Second District results in an unconstitutional violation of the separation of powers by allowing legislation (in this case the mandatory stay) to impermissibly impinge on court procedure, and therefore creates conflict jurisdiction with previous Court decisions to permit review of the decision below. Additionally, Bellas and Hanos take issue with the Second DCA’s statement in Trapeo that only the Department of Financial Services, and not the courts, have authority to determine whether the right to neutral evaluation has been waived. They argue that such an interpretation of s. 627.7074, Fla. Stat., would constitute an unlawful delegation of judicial authority to the department, an agency of the executive branch.

It remains to be seen whether the Supreme Court will agree to consider these cases.