The Fourth District Court of Appeal reversed a jury verdict for an insured in an action on a homeowner’s insurance policy in Citizens Prop. Ins. Co. v. Mendoza (Fla. 4th DCA Jul. 5, 2018). The insured sued his insurer for breach of contract arising from a water heater leak. The insurer denied the claim, arguing that coverage was excluded under an exclusion for constant or repeated seepage or leakage of water.

The trial court erred by improperly instructing the jury about the insurer’s duty to adjust the claim. This instruction improperly “transformed the case into a referendum on the quality of the adjuster’s performance,” instead of requiring the jury to decide the factual issue of whether the loss was excluded under the policy.

The jury instructions and closing arguments focused on whether the insurance adjuster properly investigated the loss, rather than the facts of the loss. Thus, the jury could have decided the case against the insurer because it felt the adjuster did not “do a good job” adjusting the loss, regardless of whether the incident fell within the policy exclusion.

Such arguments are improper in a breach of contract case, where the jury’s focus must be on whether the facts of the loss required payment from the insurer under the language of the policy. Allegations that the insurance company failed to properly adjust a claim must be made in a separate action for bad faith. In a breach of contract action, an insured can criticize an adjuster’s conclusions, but cannot argue that the adjuster breached a duty or obligation to them. Thus, even “if an adjuster makes a mockery of the code of ethics, but the insurance company correctly denies a claim, there is no action for breach of contract.”

The Fourth DCA therefore ordered a new trial on the breach of contract action.