Warfel v. Universal Ins. Co. of North America
No. 2D08-3134, 2009 WL 4640882
(Fla. 2d DCA, December 9, 2009)
The issue in this case was whether the amended sections of Florida Statute sections 627.7065, 627.7072, and 627.7073 (2005), which affected database information, testing standards, and reporting requirements for sinkhole claims, created a presumption that shifted the burden of proof to the homeowner to disprove an insurer’s expert’s opinion that damage was not caused by a sinkhole or whether it created a presumption that vanished once a homeowner produced evidence that a sinkhole damaged his or her property.
In August 2005, Mr. Warfel noticed damaged walls and floors in his home. He filed a sinkhole claim under his all-risk policy with Universal, and Universal retained experts to conduct the investigation required by Florida Statute section 627.707. Universal denied the claim after the experts it retained concluded that damage was caused by shrinkage, thermal stress, and differential settlement, all of which were excluded from coverage under the policy. Mr. Warfel then filed suit.
Universal asked the trial court to determine that Florida Statute section 90.304 allowed a jury instruction based on section 627.7073(1)(c) as a rebuttable presumption affecting the burden of proof. Florida Statute section 90.304 provided:
In civil actions, all rebuttable presumptions which are not defined in s. 90.303 are presumptions affecting the burden of proof.
Section 627.7073(1)(c) provided:
The respective findings, opinions, and recommendations of the professional engineer or professional geologist as to the cause of distress to the property and the findings, opinions, and recommendations of the professional engineer as to land and building stabilization and foundation repair shall be presumed correct.
Universal argued that its expert report findings were presumptively correct, and the presumption shifted the burden of proof to Mr. Warfel to prove that the damage was caused by a sinkhole. Mr. Warfel argued that the section 627.7073(1)(c) presumption was a “vanishing” presumption, which affected the burden of producing evidence but did not shift the burden of proof to him. The trial court agreed with Universal and instructed the jury:
You must presume that the opinions, findings, and conclusion in the SD II report as to the cause of damage and whether or not a sinkhole loss has occurred are correct. This presumption is rebuttable. The Plaintiff has the burden of proving by a preponderance of the evidence that the findings, opinions, and conclusions of the report are not correct.
Florida’s Second District Court of Appeal, however, sided with Warfel. The Court explained that in enacting the statutes relating to the expert reports, the Legislature did not clearly state that public policy requires a homeowner to bear the burden to disprove the findings and recommendations of the insurer’s engineers and geologists. The Court also noted that all-risk policies traditionally give the insurer the burden to prove that a claimed loss is not covered. The Court then noted, it “must assume that the legislature was aware of this fact when it enacted section 627.7073(1)(c),” and that the Legislature “knows how to create burden-shifting presumptions under section 90.304.” Warfel v. Universal, 2009 WL 4640882 at *2 (Fla. 2d DCA 2009). In the absence of clear Legislative intent otherwise, the Court concluded the presumption under section 627.7073(1)(c) was a “vanishing” or “bursting bubble” presumption that affected only Mr. Warfel’s burden of producing evidence. As Mr. Warfel produced credible evidence contradicting the presumption, the presumption vanished and the issue should have been determined on the evidence as though no presumption ever existed.
Because the trial court misapplied the presumption and gave the jury an instruction that improperly shifted the burden of proof, the Court awarded Mr. Warfel a new trial.
Justice Villanti dissented, writing that Florida Statute section 90.303 and the public policy behind Florida Statute sections 627.7065, 627 .7072, and 627.7073 support a burden shifting instruction.
You can read the entire court slip opinion here.