ISTRICT

OURT

PPEAL

TATE

LORIDA

OURTH

ISTRICT

JulyTerm 2009

THE FLORIDA INSURANCE GUARANTY ASSOCIATION, INC.,

Appellant,v.

DEVON NEIGHBORHOOD ASSOCIATION INC.

d/b/a

DEVONNEIGHBORHOOD & CONDOMINIUMS A-J ASSOCATION, INC.,

Appellee.No. 4D09-377[December 2, 2009]W

ARNER

,J.Florida Insurance Guaranty Association (“FIGA”) appeals a non-finalorder denying its motion to compel an appraisal of property damage tocondominium association property owned by the Devon NeighborhoodAssociation, Inc. (“Devon”). Devon claimed that FIGA had waived itsright to an appraisal by participating in the lawsuit and also by failing tocomply with section 627.7015, Florida Statutes. We hold that FIGA isprecluded from asserting its right to compel the appraisal process byfailing to provide the notice required by the statute, the application of which does not violate the impairment of contracts clause of theconstitution. We affirm.Devontimely filed a claim with its insurer, Southern Family Insurance(“Southern”), after the condominium association property sustaineddamage when Hurricane Wilma struck in October 2005. Devonsubmitted its first sworn proof of loss claim in February 2006. Southernbecame insolvent and was placed into receivershipin April 2006. Byoperation of law, FIGA assumed responsibility for Devon’s claim. Threedays later, Devon submitted a second sworn proof of loss statement,increasing the claimed amount ofloss. It is undisputed that beforebecoming insolvent, Southern paid Devon approximately $2.5 million.FIGA paid Devon an additional $1.7 million for a total payment of $4.2million. In December 2007, a contracting company hired by Devonestimated additional damage in the amount of $4.8 or $5 million. Theadditional claims involve three roofs and replacing all the glass sliders

and windows. Devon submitted the report with the $4.8 million inadditional claims to FIGA on January 30, 2008, and FIGA refused to pay.On February 11, 2008, Devon filed a two-count complaint againstFIGA. Count I alleged breach of contractual and statutory duties infailing to fully compensate it for all losses covered under the policy.Count II sought a declaration of the validity of the insurance contract, adetermination of Devon’s rights and obligations under the policy, adetermination of whether the damages and losses were covered claims,and a declaration that the deductible provisions were void. FIGAanswered, alleging various affirmative defenses, and demanding anappraisal ofthe damages pursuant to the terms of the Southern policy.FIGA moved to compel an appraisal. Devon objected, both because itcontended that FIGA had waived its right by participating in the lawsuitand because both Southern and FIGA had failed to complywith section627.7015(2), Florida Statutes (2005), by not notifying Devon of thestatutory mediation process available to it. Failure to do so preventedthe insurer from insisting on the appraisal process as a precondition tolegal action, in accordance with the statute. Ultimately, the trial courtdenied the motion to compel the appraisal, prompting this appealpursuant to Florida Rule of Appellate Procedure 9.130(a)(3)(C)(iv).FIGA claims that it is not bound by the notice provisions of section627.7015(2), as the amendment which would have applied the statute tothe insurance contract in this case was enacted after the policy went intoeffect. It contends that to apply it to the contract would amount to anunconstitutional impairment of contract. Because these issuesare onesof constitutional and statutory interpretation,our review is de novo.

Fla.Hosp. Waterman, Inc. v. Buster

, 984 So. 2d 478, 485 (Fla. 2008).Balancing the nature and extent of the impairment of contract with thestate’s objective goals, we conclude that the statutory amendment isconstitutionally permissible.

See Pomponio v. Claridge of Pompano Condo., Inc.

,378 So. 2d 774 (Fla. 1979).Section 627.7015 establishes a mediation alternative for the handlingof property insuranceclaims. The legislatively approved purposeprovided: There is a particular need for an informal, nonthreateningforum for helping parties who elect this procedure to resolvetheir claims disputes because most homeowner’s andcommercial residential insurance policies obligate insuredsto participate in a potentially expensive and time-consuming

adversarial appraisal process prior to litigation. Theprocedure set forth in this section is designed to bring theparties together for a mediated claims settlement conference without any of the trappings or drawbacks of an adversarialprocess. Before resorting to these procedures, insureds andinsurers are encouraged to resolve claims as quickly andfairly as possible.§ 627.7015(1), Fla. Stat. (2005). Upon receiving a claim, the insurermustnotify the claimant of its right to mediation. § 627.7015(2), Fla.Stat.(2005). The version of the statute in effect when the policy in this casebecame effective provided for mediation for homeowners’ residentialpolicies only. The legislature amended the statute, effective July 1, 2005,extending the mediation alternative to “commercial residential insurancepolicies.” Included within the statutory definition for such policies iscoverage provided by condominium associations for common elements.

See

627.4025, Fla. Stat.(2005). The policy in this case constituted acommercial residential policy. The amended statute also added a penalty for the insurer’s failure tocomply with the notice requirements: “[T]he insured shall not be requiredto submit to or participate in any contractual loss appraisal process of the property loss damage as a precondition to legal action for breach of contract against the insurer for its failure to pay the policyholder’s claimscovered by the policy.” § 627.7015(7), Fla. Stat. (2005).It is undisputed that the notice provisions of section 627.7015(2) werenot complied with in this case. FIGA, however, contends that theprovisions of the amended statute cannot be applied retroactivelybecause the insurance contract was executed prior to the date of thestatutory amendment, even though the loss occurred and the claim wassubmitted after theenactmentof the amendment. The prior version of the statute, which was in effect at the time theparties entered into the contract, did not apply to condominiumassociations nor did it provide a penalty for failing to notify the claimantof its right to mediation.Similar to the federal constitutional contract clause, Article I, Section10 of the Florida Constitution, prohibits the enactment of any “lawimpairing the obligation of contracts.” In

Pomponio

, after reviewing theevolution of contract clause analysis by the United States Supreme Court