One of Florida’s largest property insurers won a major victory Wednesday from an appeals court, which found that a jury’s $335,000 award in a claims dispute over plumbing damages was far out of line with the evidence.
“The verdict was several times higher than the only admitted valuation evidence, so it does not bear a reasonable relation to the damages proved,” Fl
orida’s 1st District Court of Appeals wrote in Karmo vs. Universal Property & Casualty Insurance. “And because the amounts awarded cannot be logically derived from the evidence, the verdict is not supported by it.”
The appellate court sent the case back to the Circuit Court judge in Okaloosa County to determine the proper amount of damages due to the homeowner.
The litigation started with a reportedly backed-up cast-iron drainage system in the home of Pamelo and Armah Karmo in the Florida Panhandle in 2019. The
homeowner filed a claim with Universal, contending that the sewage backup affected the washing machine, dishwasher and other drains. The entire drain system requi
red replacing, a job that would require breaking up the concrete slab of the home and extensive restoration work, the Karmos argued.
A restoration company estimated that the work would cost $79,680 in replacement value (RCV) or $50,220 in actual cash value. Universal’s plumber said the pipes were clogged but could be repaired without
extensive disruption. The insurer estimated the covered water damage was just over $12,000
in value. After depreciation and the policy’s deductible, Universal paid about $7,000 in actual cash value, the appellate court explained.
But the dispute went to trial and the jury found in favor of the homeowner, awarding six-figure amounts that Universal’s lawyers found to be head-scratching.
“Somehow, the jury returned a verdict awarding plaintiff $335,000 in RCV damages and $305,000 in ACV damages,” Universal’s attorney, Paulo Lima, wrote in his appeals brief.
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Even the trial judge in Okaloosa County was surprised. “I didn’t know how the jury came up with t
hat amount. I thought I missed something,” the judge said during a hearing after the trial, according to Lima’s brief.
Despite the trial judge’s concerns, he declined to reduce the jury’s award to less than the polic
y limits—$140,374, plus pre-trial interest. He noted that the jury had been instructed to awar
d an amount that would “fairly and adequately” compensate the plaintiff.
But even the policy limit amount was not supported by evidence introduced in the trial, the 1st District Court of Appeals panel decided.
“On remand … the court must determine whether RCV or ACV is the proper measure of damages under the policy and order remittitur in an amount consistent with that determination and the evidence,” the appellate judges wrote.
