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The Florida Supreme Court has overruled prior precedent and dominated towards appraisers charging a contingent payment or having a contingent curiosity within the end result of an appraisal.1 This case will instantly impression all ongoing and future value determinations. If you might be in an appraisal with a contingent appraiser, you should instantly search authorized recommendation about your subsequent steps.
The holding is easy:
[A]n appraiser can’t be ‘disinterested’ if she or he, or a agency during which she or he has an curiosity, is to be compensated for providers as a public adjuster with a contingency payment.
The Florida Supreme Court went to lengths to explain the monetary curiosity of the appraiser and the contingent payment of the general public adjusting agency:
The contingency payment association agreed to between Mr. Parrish and KCC offers Mr. Keys, as president of KCC, a pecuniary curiosity in Mr. Parrish’s declare. As a ‘member of a limited liability company’—on this case KCC—Mr. Keys is by definition an ‘interest holder’ in it. See § 605.0102(31)(f), Fla. Stat. (2022). And right here, Mr. Keys’s curiosity is of a pecuniary, or monetary, nature. See Financial Interest, Black’s Law Dictionary (eleventh ed. 2019) (defining ‘financial interest’ as ‘[a]n interest involving money or its equivalent’). Put merely, the extra Mr. Parrish recovers, the extra KCC collects; and the extra KCC collects, the likelier it’s that Mr. Keys will himself be ready to be paid, or that his curiosity in KCC will likely be invaluable. Mr. Keys’s pecuniary curiosity in evaluating Mr. Parrish’s loss such that Mr. Parrish recovers as a lot as potential means Mr. Keys will not be “disinterested.” To the opposite, the entire level of the contingency payment settlement is to align Mr. Keys’s financial pursuits with Mr. Parrish’s.
While I can admire this reasoning supporting the choice, the Court made quite a few gaffs different members of Merlin Law Group highlighted to me. The largest was the next:
[P]arties to a contract select their phrases on function, and we respect these decisions once we can discern them.
When did the insured get to agree to simply accept a standardized wording scheme between insurance coverage firms? Every legislation college pupil taking a primary insurance coverage legislation class is taught that the policyholder has no capacity to comply with boilerplate language discovered within the overwhelming majority of insurance coverage insurance policies. The coverage is an adhesion contract. How justices missed this primary authorized contract idea famous in legions of different insurance coverage coverage interpretation instances is disappointing.
For the advantage of these wishing to learn the briefs of the events, I connect them within the footnotes.
Thought For The Day
To enhance is to alter; to be good is to alter usually.
—Winston Churchill
1 Parrish v. State Farm Florida Ins. Co., No. SC21-172 (Fla. Feb. 9, 2023).