Third District Court of Appeal
                               State of Florida

                         Opinion filed January 23, 2019.
         Not final until disposition of timely filed motion for rehearing.

                               ________________

                                No. 3D18-742
                          Lower Tribunal No. 17-6368
                             ________________


                  People’s Trust Insurance Company,
                                    Appellant,

                                        vs.

                             Esperanza Garcia,
                                    Appellee.


     An Appeal from a non-final order from the Circuit Court for Miami-Dade
County, Rodney Smith, Judge.

      White & Case, and Raoul G. Cantero and Ryan A. Ulloa; Brett R. Frankel and
Jonathan Sabghir (Deerfield Beach), for appellant.

      Mintz Truppman, P.A., and Timothy H. Crutchfield; Marin, Eljaiek, Lopez &
Martinez, P.L., and Anthony M. Lopez and David F. Garcia, for appellee.


Before LOGUE and SCALES, JJ., and LAGOA, Associate Judge.

      LAGOA, Associate Judge.
      People’s Trust Insurance Company (“People’s Trust”) appeals from a non-

final order denying its motion to compel appraisal. Because People’s Trust did not

wholly deny coverage, the issue of causation is an amount-of-loss question subject

to appraisal. We therefore conclude that the trial court erred by not compelling

appraisal, and we reverse and remand with directions to the trial court to compel

appraisal.

I.    FACTUAL AND PROCEDURAL HISTORY

      Garcia owns property located in Miami-Dade County (the “property”). The

property was insured under a homeowner’s insurance policy issued by People’s

Trust that included a Preferred Contractor Endorsement (the “endorsement”). Under

the endorsement, Garcia agreed that in the event of a covered loss, People’s Trust

may, at its option, repair the property.1 The endorsement’s appraisal provision

further stated that where People’s Trust elected to repair the property, “[i]f [Garcia]

and [People’s Trust] fail to agree on the amount of loss, which includes the scope of

repairs, either may demand an appraisal as to the amount of loss and the scope of

repairs.” Under the appraisal provision, once the appraisers set the amount of loss




1
  Specifically, the endorsement provided: “‘You’ agree that in the event of a covered
loss to ‘your’ dwelling or other structures on the ‘residence premises,’ . . . ‘we’ at
our option may select Rapid Response Team, LLC™ to repair ‘your’ damaged
property as provided by the policy and its endorsements.”


                                          2
and scope of repairs, “[t]he scope of repairs shall establish the work to be performed

and completed by Rapid Response Team, LLC™.”

      The property suffered water damage as a result of a roof leak on October 1,

2016, and Garcia reported the claim to People’s Trust. In its December 30, 2016,

letter, People’s Trust informed Garcia as follows:

             THERE IS COVERAGE UNDER THE POLICY FOR
             THIS LOSS AS A WHOLE; HOWEVER, THE SCOPE
             OF DAMAGES COVERED BY YOUR POLICY
             INCLUDES ONLY THE INTERIOR DAMAGES BUT
             DOES NOT INCLUDE YOUR ROOF

             We have completed our investigation of your claim, and
             based upon what we were provided and what you reported,
             and additionally, based upon our claim investigation, there
             is generally coverage for your loss as a whole. However,
             and more specifically, our investigation revealed that the
             roof leak you reported stemmed from age-related wear and
             tear and deterioration; general mechanical breakdown or
             latent defect; and/or faulty, inadequate or defective
             maintenance of the roofing system—none of which are
             covered causes of loss. Therefore, in our opinion, the
             scope of covered damages would not include your roofing
             system because those damages were caused by uncovered
             or excluded causes, but would provide coverage for
             resulting ensuing damages to the interior of your home.
             Therefore, we believe our obligation is to repair only those
             damages to the interior of the home. If you are not in
             agreement with that assessment, the question of whether
             the scope of repairs should include the roof, can be
             resolved in appraisal . . . .

The December 30 letter stated that People’s Trust was exercising its election to repair

the property and that People’s Trust would “repair your property to its pre-loss



                                          3
condition by making repairs to all covered damages, once there is a determination

of what those damages are, either by agreement or by submitting the matter to an

appraisal panel as set forth in the policy.”

      In a subsequent letter dated February 1, 2017, People’s Trust acknowledged

receipt of Garcia’s Sworn Proof of Loss and stated that “[b]ased upon our . . .

inspection of the damages, [People’s Trust] disputes the scope of loss and/or the

amount of damages identified in your Sworn Proof of Loss. Specifically, your

Sworn Proof of Loss is predicated upon a repair estimate which includes repairs that

fall outside the scope of your loss.” People’s Trust demanded appraisal “of the

amount of loss and scope of repairs in accordance with” the Endorsement.

      On March 16, 2017, Garcia filed a complaint for breach of contract (Count I)

and declaratory judgment (Count II) against People’s Trust. On November 28, 2017,

People’s Trust filed a motion to dismiss Count II of the complaint and a motion to

compel appraisal and stay the current lawsuit. The trial court sua sponte set the

motion for a January 19, 2018, hearing. Garcia’s counsel did not appear at this

hearing. After the hearing, the trial court entered an order denying People’s Trust’s

motion to dismiss Count II, but granting its motion to compel appraisal and staying

the action. Garcia moved for reconsideration, arguing that her counsel’s failure to

appear at the hearing was due to a clerical error. On March 14, 2018, the trial court

granted Garcia’s motion for reconsideration, vacated its January 19 order, and



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denied People’s Trust motion to compel appraisal. The trial court’s order states that

“[t]he Court finds the issue is one of coverage, not amount-of-loss.”

        People’s Trust appeals from the March 14 non-final order denying its motion

to compel appraisal.2

II.     STANDARD OF REVIEW

        In reviewing a trial court’s order denying a motion to compel appraisal,

“factual findings are reviewed for competent, substantial evidence, and the

application of the law to the facts is reviewed de novo.” Fla. Ins. Guar. Ass’n v.

Waters, 

, 439-40 (Fla. 2d DCA 2015); accord Fla. Ins. Guar. Ass’n

v. Castilla, 

, 704 (Fla. 4th DCA 2009) (applying the same standard of

review for a denial of a motion to compel arbitration to a motion to compel appraisal

and holding that a trial court’s factual findings are reviewed under a competent,

substantial evidence standard and its application of the law to those findings is

reviewed de novo).

        Where the facts are undisputed, a de novo standard of review applies. See

Mora v. Abraham Chevrolet–Tampa, Inc., 

, 33-34 (Fla. 2d DCA 2005)

(stating that a trial court’s ruling on a motion to compel arbitration when the facts

are undisputed is reviewed de novo); see also People’s Trust Ins. Co. v. Tracey, 

, 933 (Fla. 4th DCA 2018) (applying a de novo standard of review to trial


2
    The trial court subsequently stayed the case pending appeal.

                                           5
court’s order denying insurer’s motion to compel appraisal “as the issue is a legal

one”).

III.     ANALYSIS

         On appeal, People’s Trust argues that the trial court erred in refusing to

compel appraisal. We agree.3

         It is undisputed that the issue of coverage is one for the court, State Farm Fire

& Cas. Co. v. Licea, 

, 1287 (Fla. 1996) (“‘A challenge of coverage is

exclusively a judicial question . . . .’” (emphasis in original) (quoting Midwest Mut.

Ins. Co. v. Santiesteban, 

, 667 (Fla. 1974))); Fla. Ins. Guar. Ass’n,

Inc. v. Olympus Ass’n, Inc., 

, 794 (Fla. 4th DCA 2010) (“Issues




3
  As a threshold issue, Garcia contends that People’s Trust has failed to present a
sufficient record for our review and that we should affirm on this basis alone. Garcia,
however, does not explain—nor can we discern—to what extent the trial court’s
determination was based upon findings of fact. Under these circumstances, the trial
court considered a pure legal question—whether the dispute over the cause of water
damage to Garcia’s property was a question of coverage or a question of the amount
of loss—and the absence of a transcript of the March 14 hearing is not fatal to our
review. See Rollet v. de Bizemont, 

, 357 (Fla. 3d DCA 2015)
(explaining that “[w]here the hearing at issue is non-evidentiary and consists only of
legal argument, the failure to provide a transcript is not necessarily fatal to appellate
review” and holding that “[a]s there were no disputed issues of fact for the trial court
to resolve, and only legal argument to be presented at the hearing, our de novo review
is unimpeded by the absence of the hearing transcript”); Ronbeck Constr. Co. v.
Savanna Club Corp., 

, 348 (Fla. 4th DCA 1992) (“The rule of
Applegate v. Barnett Bank of Tallahassee, 

(Fla. 1979), applies only
where the trial court’s decision turns on its resolution of contested facts.”).

                                             6
relating to coverage challenges are questions exclusively for the judiciary.”), while

the issue of the amount of loss is one for appraisers. As such,

             The division of responsibility between the appraisers and
             court is therefore clear. The appraisers determine the
             amount of the loss, which includes calculating the cost of
             repair or replacement of property damaged, and
             ascertaining how much of the damage was caused by a
             covered peril . . . . [and] [t]he court decides whether the
             policy provides coverage for the peril which inflicted the
             damage, and for the particular property at issue; in other
             words, all coverage matters.

Citizens Prop. Ins. Corp. v. River Manor Condo. Ass’n, Inc., 

, 854

(Fla. 4th DCA 2013) (citations omitted); see also State Farm Fla. Ins. Co. v.

Cardelles, 

, 241 (Fla. 3d DCA 2015) (“‘A challenge to coverage is,

as the Florida Supreme Court has confirmed, a matter for determination by a court;

whereas, a challenge to the amount of a covered loss is for determination by an

appraisal panel.’” (quoting Citizens Prop. Ins. Corp. v. Mango Hill Condo. Ass’n 12

Inc., 

, 581 (Fla. 3d DCA 2011))).

      The issue of causation, however, may be either one of coverage for the court

or one of the amount of loss for the appraisers. In Johnson v. Nationwide Mutual

Insurance Co., 

(Fla. 2002), the Florida Supreme Court held that

where an insurer has not wholly denied coverage, causation is an amount of loss

issue for appraisal. In Johnson, the Supreme Court resolved the conflict between

this Court’s decision in Gonzalez v. State Farm Fire & Insurance Co., 

814 (Fla. 3d DCA 2000), and the Second District’s decision in Nationwide Mutual

Insurance Co. v. Johnson, 

(Fla. 2d DCA 2000).

       In Gonzalez, the homeowners claimed that cracks in the walls and tiles of their

home were caused by blasting, for which the relevant insurance policy provided

. Their insurer, State Farm, denied coverage, asserting

that the cracks were caused by settlement of the foundation, which fell within a

policy exclusion. 

court ruled that the “‘[a]ppraiser[s] should give an

opinion as to causation and damages.’” 

(quoting 

). This Court reversed, concluding “that the appraisers impermissibly decided

whether the entire claim was within the coverage of the insurance policy.” 

at 815. In reaching its conclusion, this Court reasoned that “[s]ince State Farm’s

position is that this entire loss falls within a policy exclusion, this defense is a judicial

question and not a question for the appraisers.” 

at 816.

       In Nationwide Mutual, the Johnsons reported damage to their home to their

insurer, Nationwide, contending that the loss was caused by a sinkhole, a covered

peril. 

. Nationwide determined that the loss was caused

by earth movement, which was not a covered cause of loss. 

court

concluded that it would determine the issue of whether there was a covered loss and

then have the appraisal panel determine the amount of the loss. The Second District




                                             8
reversed, holding that “‘causation is an amount of loss issue for the appraisal panel.’”

).

      In resolving the conflict between Gonzalez and Nationwide Insurance, the

Supreme Court adopted the analysis in Gonzalez:

             Very simply, the Licea court was saying that when the
             insurer admits that there is a covered loss, but there is a
             disagreement on the amount of loss, it is for the appraisers
             to arrive at the amount to be paid. In that circumstance,
             the appraisers are to inspect the property and sort out how
             much is to be paid on account of a covered peril. In doing
             so, they are to exclude payment for “a cause not covered,
             such as normal wear and tear, dry rot, or various other
             designated, excluded 

(emphasis in original) (citations omitted) (quoting Gonzalez, 

at 816). The Supreme Court further explained:

             Therefore, the issue in Johnson and Gonzalez was not
             appraising the amount of a loss which the insurer admitted
             was covered. Rather, the issue was one of whether the
             policies covered the losses for the claims that were made.
             [T]hese coverage issues were to be judicially determined
             by the court and were not subject to a determination by
             appraisers. Therefore, in Johnson, the determination as to
             whether the loss was covered by a sinkhole or earth
             movement is an issue of coverage for the whole loss and
             is an issue for judicial determination by a court.

The Supreme Court quashed Johnson and approved Gonzalez,

holding that “causation is a coverage question for the court when an insurer wholly

denies that there is a covered loss and an amount-of-loss question for the appraisal




                                           9
panel when an insurer admits that there is covered loss, the amount of which is

disputed.” 

      This Court has applied the rule set forth in Johnson where the insurer

acknowledges coverage for the loss as whole yet the parties dispute causation for

part of the damage. In Kendall Lakes Townhomes Developers, Inc. v. Agricultural

Excess and Surplus Lines Insurance Co., 

(Fla. 3d DCA 2005), the

insured was the owner of a townhouse complex insured under a windstorm policy

issued by the insurer. 

The insured filed a claim with the insurer, alleging

that as a result of Hurricane Irene, several units “sustained interior damage due to

water seepage,” and that tiles were blown off the roof and cracked or loosened. 

inspection, the insurer determined that the interior damage was not covered

by the policy because there was no break in the covered structure, and that with

regard to the tiles that had blown off the roof, although they were covered under the

policy, the cost to replace them was less than the policy’s deductible. As a result,

the insurer denied the claim. 

“The parties . . . [therefore] disagreed as to

whether windstorm caused all of the claimed damage or just part of it . . . .” 

then demanded appraisal. The insured’s appraiser estimated a

covered loss of $716,000 while the insurer’s appraiser estimated damage in an

amount of less than $1,000, below the policy’s deductible. 

court

confirmed the umpire’s report, which included determinations as to causation. 

appeal, the insured argued, among other things, that pursuant to 

, “causation of the damage is a coverage issue reserved for the trial

court, not the appraisal panel.” 

       This Court disagreed, reasoning that:

                     In the case at hand, the insurance carrier agrees that
              there is a covered loss, but disagrees as to the amount of
              loss. Therefore, based on Johnson, although there is a
              large discrepancy between the insured’s and insurance
              carrier’s estimate of the loss, because the insurer has not
              wholly denied that there is a covered loss, causation is “an
              amount-of-loss question for the appraisal panel,” not a
              coverage question that can only be decided by the trial
              court. Accordingly, we agree with the insurance carrier
              that pursuant to Johnson, it is permissible for an appraisal
              panel to decide causation issues when causation is not a
              coverage question, but rather an amount-of-loss question.

       Similarly here, People’s Trust admits that there is coverage for water damage

to Garcia’s property as a result of a roof leak. The damage to the property include

both damage to the interior of the property and damage to the roofing system.

Whether the damage to the roofing system was caused by wear and tear and

deterioration, general mechanical breakdown or latent defect, and/or faulty,

inadequate or defective maintenance of the roofing system, all of which People’s

Trust claims are excluded causes under the policy, is an amount of loss question for


4
 The Court ultimately reversed the final judgment confirming the award because the
umpire exceeded the authority granted to it by the trial 

.

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the appraisers. As in Kendall Lakes, People’s Trust has not wholly denied coverage,

and thus “causation is ‘an amount-of-loss question for the appraisal panel,’ not a

coverage question that can only be decided by the trial 

.

      In response, Garcia argues that because she suffered two losses—the original

loss when the roof was damaged and a subsequent ensuing loss consisting of water

damage to the interior of her home5—the rule set forth in Johnson and Gonzalez does

not apply here. Specifically, Garcia argues that the rule that “causation is a coverage

question for the court when an insurer wholly denies that there is a covered loss and

an amount-of-loss question for the appraisal panel when an insurer admits that there

is covered loss, the amount of which is disputed,” 

, does

not apply where there are multiple separate losses and the insurer acknowledges

coverage for only one. We are not convinced by Garcia’s argument for two reasons.

      First, Garcia’s argument that she suffered two losses relies upon a discussion

of “ensuing loss” set forth in three cases. See Swire Pac. Holdings, Inc. v. Zurich

Ins. Co., 

, 167 (Fla. 2003) (“[A]n ensuing loss is one that occurs

subsequent to the excluded loss; if original loss was also considered an ensuing loss,

the exception would swallow the exclusion.” (citing Vt. Elec. Power Co. v. Hartford

Steam Boiler Inspection & Ins. Co., 

, 445 (D. Vt. 1999)); Liberty



5
 People’s Trust states in its December 30 letter that the damage to the interior of
Garcia’s property is covered as “resulting ensuing damage[].”

                                          12
Mut. Fire Ins. Co. v. Martinez, 

, 488 (Fla. 5th DCA 2015) (“An

ensuing loss is a loss that occurs separate from but as a result of an excluded loss.”);

Peek v. Am. Integrity Ins. Co. of Fla., 

, 512 (Fla. 2d DCA 2015) (“An

ensuing loss follows as a consequence of an excluded loss, and the crux of the

ensuing loss provision is that there must be a covered cause of loss that ensues from

the excluded cause of loss.”). Notably, none of these cases are factually analogous

to the case at hand. Each addressed whether an ensuing loss exception to a policy

exclusion applied, see Swire Pac. 

(holding that insured’s

expenses in effectuating repairs were not excepted from design defect policy

exclusion as an ensuing loss); 

(holding that damage to

insured’s pool deck, rock garden, and waterfall was not an ensuing loss); 

(holding that where Chinese drywall was an excluded peril, sulfuric

gasses emanating from the drywall that caused odor and corrosion represented a

“single discrete loss from a single discrete injury” and thus were not ensuing losses),

and none considered an “ensuing loss” within the context of an appraisal provision.

      Second, the Fourth District has held that the issue of causation is to be

determined by appraisal in a factually analogous scenario where the insurer agreed

to repair ensuing damages to the interior of a home. In People’s Trust Insurance Co.

v. Tracey, 

(Fla. 4th DCA 2018), the insureds filed a claim with their

insurer for damage caused by wind from a tornado, specifically, damage to the roof



                                          13
and interior of their home. 

In a letter virtually identical to the one in the

instant case, the insurer admitted that “there is generally coverage for your loss as a

whole,” however, stated:

             in our opinion, the scope of covered damages would not
             include your roofing system because those damages were
             caused by uncovered or excluded causes, but would
             provide coverage for resulting ensuing damages to the
             interior of your home. Therefore, we believe our
             obligation is to repair only those damages to the interior of
             the home. If you are not in agreement with that
             assessment, the question of whether the scope of repairs
             should include the roof, can be resolved in appraisal . . . .

The insureds did not agree with the insurer’s conclusion and submitted a

proof of loss. The insurer then “demanded an appraisal to determine whether the

roof damage was caused by wind (a covered cause) or wear and tear (an uncovered

cause).” 

insureds filed suit, the insurer moved to compel appraisal.

The trial court determined that the matter could not be submitted to appraisal

“because the insurer made a ‘predetermination’ that the roof was not covered.” 

Johnson and Kendall Lakes, the Fourth District found that because

“the insurer admitted coverage for the interior damage, but declined to repair the

roof[,] . . . the insurer did not ‘wholly deny’ coverage,” and reversed and remanded

for the trial court to compel an appraisal. 

In reaching its conclusion,

the court noted that “[t]here is only one claim, and it includes both the roof and the




                                           14
interior of the same home.” 

We find our sister court’s analysis in Tracey

persuasive and likewise conclude the issue is one for the appraisal process.

IV.   CONCLUSION

      Because People’s Trust has not wholly denied coverage, causation is an

amount-of-loss question for the appraisal panel, not a coverage question that can

only be decided by a court. Accordingly, we conclude that the trial court erred in

denying People’s Trust’s motion to compel appraisal and reverse and remand with

directions to compel an appraisal.

      Reversed and remanded with directions.




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