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Navigating the Complexities of Homeowner’s Insurance Post-Hurricane Irma: What the Florida Supreme Court Says about “Disinterested Appraisers”

February 9, 2023. May the president of a homeowner’s public adjusting firm, which is to be compensated on a contingency basis for its adjusting services, subsequently serve as a “disinterested” appraiser under the language of an insurance policy?

Jon Parrish was insured under a policy issued by State Farm Florida Insurance Company (State Farm). Hurricane Irma damaged his home. Mr. Parrish filed a claim and hired Keys Claims Consultants, Inc. (KCC) to provide public adjusting services. Parrish demanded the appraisal process in the State Farm policy be invoked. Under the appraisal process, the homeowner and the State Farm each hire its own disinterested appraiser and an umpire to resolve the disputed claim.

Parrish hired the President of KCC, George Keys, as his disinterested appraiser. State Farm objected to Mr. Keys, claiming Mr. Keys could not be considered a “disinterested” appraiser since his firm was already serving as Mr. Parrish’s public adjuster. The Florida Supreme Court said the only issue it must determine is what “disinterested” means in the context of the State Farm insurance policy. The policy did not define “disinterested.” The Court held, “When a term in an insurance policy is undefined, it should be given its plain and ordinary meaning . . . .” (quoting Botee v. S. Fid. Ins. Co., 162 So. 3d 183, 186 (Fla. 5th DCA 2015). Then it reasoned that courts may look to legal and non-legal dictionary definitions to determine the “plain and ordinary meaning” of a term undefined in an insurance contract.) (quoting Botee, 162 So. 3d at 186). Black’s Law Dictionary defined “disinterested” as “[f]ree from bias, prejudice, or partiality and therefore able to judge the situation fairly; not having a pecuniary interest in the matter at hand.” Disinterested, Black’s Law Dictionary (10th ed. 2014).

Webster’s dictionary defined it as “1: lacking or revealing lack of interest . . . apathetic . . . 2: not influenced by regard to personal advantage: free from selfish motive: not biased or prejudiced.” Disinterested, Webster’s Third New International Dictionary (1986). The Court reasoned that the contingency fee arrangement agreed to between Mr. Parrish and KCC gives Mr. Keys, as president of KCC, a pecuniary interest in Mr. Parrish’s claim. As a “member of a limited liability company”—in this case KCC—Mr. Keys is by definition an “interest holder” in it. See § 605.0102(31)(f), Fla. Stat. (2022). And here, Mr. Keys’s interest is of a pecuniary, or financial, nature.

Put simply, the more Mr. Parrish recovers, the more KCC collects; and the more KCC collects, the likelier it is that Mr. Keys will himself be in a position to be paid, or that his interest in KCC will be valuable. Mr. Keys’s pecuniary interest in evaluating Mr. Parrish’s loss such that Mr. Parrish recovers as much as possible means Mr. Keys is not “disinterested.”

To the contrary, the whole point of the contingency fee agreement is to align Mr. Keys’s economic interests with Mr. Parrish’s. The Court agreed with State Farm because Mr. Keys’s company, KCC, is to be compensated via contingency fee, he has a pecuniary interest in the outcome of the claim and cannot qualify as a “disinterested” appraiser.

To view the Supreme Court’s opinion in its entirety, click HERE.

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