All posts by Morgan Barfield

Rainy Season May Mean More Sinkholes

Water is a sinkhole’s best friend. The underground voids and cavities associated with sinkholes form through the action of acidic water on the limestone. Limestone is a calcareous material that dissolves. The formation of the voids does not happen overnight.

Once the voids form, the soils above have to move downward, which causes that raveling process discussed in earlier blogs. Soils move down in two ways 1) gravity and 2) water. Gravity will always a play a role but not to the degree that water will. When water enters the ground surface it wants to go find the nearest aquifer and heads down. As it goes it takes the sand it passes through with it. It can also add pressure to clays in some ways as well.

The result is that we see more of an active sinkhole season. We have had no shortage of rain so far and it is not expected to slow any time soon. If you incur damage from a sinkhole, Corless Barfield can help you find out what you can do to repair your property.

Second DCA puts a lot of questions about structural damage to rest

The Second DCA recently decided Omega v. Wallace. The facts of the case are admittedly odd so I won’t recite them as it gets confusing. Long story short, how we define structural damage was the main issue in dispute. Even though the retroactive application of the changes to the law in 2011 were not actually an issue the Second DCA still went out of its way to put in a footnote that those changes cannot be retroactively applied. Long story short, if an insurance policy was issued prior to May 17, 2011 you cannot be subject to the new laws.

The Second DCA also commented on how structural damage should be defined in those cases where the changes in the law don’t apply. They said that the engineers who testified about damage to the building ┬ácaused by sinkhole activity were consistent with the policy terms. This is because, the Court continued on, nothing indicates based on the plain language of the policy that one particular definition must be used over another. This may not be 100% clear but certainly it gives us insight into how the Second DCA views this issue and it doesn’t seem favorable for insurance companies who typically want a more detailed, technical definition to apply. Its worth noting that this is the third time the Second DCA has heard this issue. Once it affirmed a judgment in favor of a homeowner without writing an opinion, the second time it briefly said the insurance companies argument was without merit and moved on and Wallace is now the third time they have addressed it. So far, all three look clearly in favor of Florida homeowners. As far as I am concerned, this debate can be put to rest.

The impact of the Supreme Court’s decision in the case Sebo

American Home Assurance v. Sebo is a pretty famous case in the insurance world but probably not known at all by your average insured. It is an important decision though that impacts homeowners drastically. The background on the case is complicated but essentially involved an expensive home that was built with numerous defects. In conjunction with this a large storm damaged the home and it was determined that the damage was as bad as it was because of the defects in the home.

Previously in Florida the rule on this was known as the concurring cause rule. This means that when two things cause damage to a home, one covered under insurance and one excluded from insurance, the insurance company would have to pay to fix all the damage. When Sebo first went up on appeal to the Second District Court of Appeals, the Second DCA applied another rule of law known as the efficient proximate cause theory. Under the same scenario above the homeowner would have to prove that the primary reason for the damage was the thing that was covered under insurance. If not, they may not get coverage for any of the damages at all.

The Florida Supreme Court accepted the case and thankfully ruled that the previous concurring cause rule was the appropriate standard here in Florida. This is important to sinkhole claims because almost always there is some other cause of damage in addition to the sinkhole conditions. For example, almost every home in Florida has some minor damages caused by just normal settlement or by simple construction related issues or by our harsh weather here in Florida. Had the original Sebo opinion survived, insurance companies would have tried to get out of these claims by arguing that the majority of the damage was from these other causes and they should not be required to pay the claim at all even though it was admitted that sinkhole activity had caused some damage to the home.

Im sure you have heard, there’s a sinkhole in Land O’ Lakes

I honestly haven had a ton of interest in writing on this story because it has been all over the news and I won’t add anything that hasn’t already been reported. But, in case you missed it one of the larger sinkholes you will see opened up in a Land O Lakes community swallowing a home and a half. It started early in the morning with reports of just a boat sinking into the ground but not long after that it was realized that this was much more serious. There are videos circulating of the house itself coming down into what tis estimated to be a 50′ deep hole. The house next door also partially collapsed not too long after.

The backstory is just as interesting as apparently the home had been confirmed as a sinkhole loss and grouting was recommended to repair it. Not sure how it ended up being repaired other than the grouting was not done, only underpinning was. We have discussed the good and bad of underpins previously. Frankly, even if this house was grouted who knows if that would have saved the day. We also see that underpins can only do so much with a collapse of this magnitude.

The issue now that the sinkhole is stabilized is the ground water contamination and of course the massive cleanup efforts. Presumably these homes have coverage in the event of a catastrophic ground cover collapse of this nature which would presumably also include their expenses associated with having to live elsewhere while the homes are repaired and/or rebuilt. Once again, this all emphasizes the importance of having the right insurance.

What to look for in a contractor

Unfortunately for everyone except insurance companies, sinkhole claims have become harder and harder to win coverage for. This also means there have been less homes needing repair (or having the money to pay for repairs). This in turn has resulted in a large portion of the sinkhole remediation contractors in the state going out of business or turning their focus to other types of work. Generally, most of the contractors use similar materials that they get from many of the same places. So selecting a contractor is no different than any other business, customer service prevails. Make sure your contractor takes the time to explain the process to you, is responsive to your calls and listens to your concerns. A lot comes up during these repairs, some unexpected and sudden, so a responsive contractor is ever so important. Also, these days its even more important to check on the financial stability of the company. Ask how long they have been in business and verify any warranties or guaranties they offer.

What to do when your neighbors sinkhole repair damages your house

Through the years we have represented several homeowners with damages caused by their neighbors repair. This is actually quite common. As they pump the grout mixture into the ground, they do so at high pressures which often can even cause the ground to heave upwards. Of course, when they are pumping the grout it is also difficult to predict sometimes where it is all going. We have had cases where neighbors even saw grout bubbling out of the ground in their yard. The result can often be cracking or heaving damage to the neighbors home. It can be minimal or dramatic.

Contractors and the engineers monitoring are supposed to be keeping a close eye on the pressures they are pumping at and also on the ground heaving. One problem is the contractors rarely monitor the neighboring homes, even though they probably should. So if something is going wrong elsewhere they are unlikely to catch it in a timely fashion.

So what is a homeowner to do? The first question is what caused the damage. It is entirely possible that the grouting process awakened some dormant sinkhole condition under the neighboring property. If you, the neighbor, have sinkhole coverage then reporting a claim to your carrier is a good place to start. If you do not have sinkhole insurance yourself then you must look to the contractor and engineer doing the work next door. Keep in mind that this stuff does happen and just because it did happen doesn’t mean the contractor was negligent. To win you would need to prove some negligence in which the contractor did the work next door. We have been successful in these types of claims in the past but it requires special attention to detail and is not a case that can just be rushed into blindly.

Is Doing the Wrong Investigation Negligence?

Is doing the wrong investigation negligence?

We asked this question in a recent lawsuit. Our client has filed a sinkhole claim with their insurance company. The company then paid a professional engineer approximately $10,000 to investigate whether or not sinkhole activity could be found in the home.

The engineer did find sinkhole activity and estimated that repairs would amount to almost $50,000. As per Florida law, the insurance company then filed the report with the County, which makes this damage public record in order to educate present and future homeowners regarding the risk of a sinkhole in any given region.

The insurance company’s negligence

After the engineer reported these findings and they were made public, the insurance company then notified the homeowner that they did not actually have sinkhole insurance on their insurance policy, therefore making the findings irrelevant to them.

This means that the insurance company did not even validate the details of the homeowner’s policy before pushing forward with the claim, which should be the first step in any insurance claim. Both the insurance company and the homeowner wasted time and money on a claim that can’t even be brought to fruition, but that’s not even the worst part.

How this affected our client

Besides the time wasted on both sides and the money wasted by the insurance company on a claim that cannot even exist, the homeowner was put in a terrible position that they can no longer get out of.

With the sinkhole being reported to the state, the property value of their home sinks dramatically. Not only do they lose property value, but they do not have sinkhole insurance, nor will they be likely to have insurance in the future, as any insurance company knows better than to cover a home with known, unrepaired damage.

In the worst case scenario, if the homeowner decides that the only financially viable action is to sell the home, it may prove impossible to sell the home even as is, considering the fact that the home needs $50,000 worth of repairs is public record.

Therefore, our position was that the insurance company was negligent for completing testing and submitting the tests to public records for an insured that wasn’t even covered for sinkholes.

The judge’s decision

Unfortunately, when this case was brought to a judge, it was decided that our case was completely ridiculous. The judge strongly sided with the carrier and stated that the insurance company did nothing wrong, that the sinkhole report could not impact the value of their home.

After two years of litigation and one month before trial, the judge threw out the case. Fortunately, the homeowners have decided to appeal this decision. Only time will tell what a second opinion will decide, but we will update you with the results of that appeal.

If you are going to file a sinkhole claim don’t wait

One common issue we run into is the timing of sinkhole damage and the timeliness of when a homeowner reports the problems to their carrier. While most sinkhole damage appears gradually and gradually worsens over time and most homeowners don’t inspect their house all day every day, homeowners are still expected and required to give their insurance company prompt notice of their claim. In the legal world prompt is very vague and the courts have generally interpreted it loosely. Still, the late or untimely reporting of a claim can be problematic.

Lets look at an example using these facts: You the homeowner see cracks to your walls in January. Your policy expires in June and renews with a new company. You call the claim in to your old carrier in December. The worst case is your new policy that came about in June doesn’t have sinkhole coverage. Now you call your old carrier who has long forgotten you existed and tell them you want to report a claim from a year ago yet you have no proof that the damages were actually there a year ago. Your insurance company will say too late and we can’t go back in time to tell you whether you had a claim back then or not and your new carrier doesn’t even cover sinkhole. Under another scenario you still have sinkhole insurance with the new carrier. You could a) call it in to the new carrier who will say call your old carrier if the damages occurred back then and deny you as pre-existing damage or b) call your old carrier and they tell you the same as a above, too late. The point is pay attention to when your policy expires and/or renews and make that a good time to check the house out for any issues. If you fear you have sinkhole damages then waiting to report the claim only causes more problems for you.

Why forced placed coverage is so horrible

I have posted numerous times on this but I can’t get enough of it and apparently no one listens to me. Forced placed policies are policies purchased by your mortgage company when you fail to buy a policy on your own. Forced placed policies often go hand in hand with homeowners that are in foreclosure or having trouble paying their mortgage. When the bank buys the policy several bad things happen for the homeowner. 1) The bank is only going to buy enough coverage to cover the mortgage. Typically policies will be enough to cover the cost of rebuilding the home should it be demolished to the ground. The mortgage amount rarely matches up with what it costs to rebuild the house. 2) Because the bank is only worried about covering its own money it usually means it cares very little about the policy coverages. Usually what the policy covers as far as causes of damage are limited and any coverages for your personal belongings inside the home will be minimal to none at all. The bank doesn’t care about your stuff. 3) The policy will be taken in the banks name, meaning you the homeowner play second fiddle and the bank gets to run the show and collect all the money first should you have an insurance claim. 4) If you are listed secondarily as a borrower on the forced placed policy you may not even have legal rights to recover attorney fees if you have to sue to recover insurance benefits. This is because the law protects insureds and reimburses insureds for their legal fees if they have to sue, and win, their insurance company. When you are a borrower and not an insured, many courts have taken the position that your lawyer doesn’t get paid. This makes it harder to find a lawyer who may potentially work for free and also makes it harder to settle your case because the insurance company has less risk in going to trial. Please, if you can, get away from a forced placed policy asap.