Kelly N. Hallisey | Phelps Dunbar
A Florida appellate court held that under a named perils policy, an insurer need not plead a policy exclusion as an affirmative defense in order to present evidence that an insured’s damage was the result of a non-covered cause of loss. Citizen’s Prop. Ins. Corp. v. Kings Creek South Condo, Inc., No. 3D18-661, 2020 Fla. App. LEXIS 3493 (Fla. 3d DCA Mar. 18, 2020).
An insured made a claim for wind damage to its property under a named perils insurance policy. The insurer denied the claim as the damage was not caused by wind but was instead a result of multiple causes of loss not covered by the policy. The insured filed a breach of contract action. During the trial, the insurer attempted to present evidence that the damage was caused by improper maintenance, but the insurer objected, arguing that the insurer was relying on the policy’s Existing Damage Exclusion, which the insurer did not plead as an affirmative defense. The trial court agreed and granted a directed verdict in favor of the insured. The insurer appealed.
The appellate court focused on the definition of affirmative defense and the fact that the insured’s policy was a named perils policy. The appellate court explained that when an insurer presents an affirmative defense, it is advising that there would be coverage if not for the pled exclusion. The appellate court held that the insured had the burden to prove that a covered cause of loss caused damage to its property under the named perils insurance policy, so the insurer was simply presenting evidence that the damage was caused by non-covered causes of loss to rebut the insured’s evidence of a covered cause of loss. Accordingly, the appellate court reversed and remanded, finding that the insurer did not need to plead the exclusion as an affirmative defense.