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Homeowners and public adjusters may now feel a little more emboldened to record an insurance adjuster’s inspection of a home, after a Florida appeals court ruled in favor of the practice last week – the third such ruling in as many years.
The 4th District Court of Appeal, in West Palm Beach, held that because the American Strategic Insurance Corp. policy does not address the question of video and audio recording of an inspection, the case should be remanded and reconsidered. The court reversed a Palm Beach County trial court’s 2021 ruling in favor of the insurer, which found that the insurance policy did not authorize the filming of the insurer’s inspector.
“We conclude that nothing on this record precludes an insured from recording an insurance adjuster’s inspection while in the insured’s own home,” 3rd DCA Judge Martha Warner wrote in the opinion. “The trial court erred in entering declaratory judgment for the insurer.”
American Strategic, a Progressive Insurance Co. subsidiary based in St. Petersburg, argued that the HO policy did not permit the recording of its inspector. But the appellate court found that the policy did not forbid it, either. The judges noted that courts have consistently held that any ambiguity in a policy must be strictly construed in favor of the insured “and strictly against the insurer.”
An oft-quoted 1976 opinion from the 4th DCA said: “Where a contract is simply silent as to a particular matter, that is, its language neither expressly nor by reasonable implication indicates that the parties intended to contract with respect to the matter, the court should not, under the guise of construction, impose contractual rights and duties on the parties which they themselves omitted.”
More recent rulings from the 4th DCA and the 3rd DCA have found that an insurance adjuster has no legitimate expectation of privacy while in an insured’s home. In Silversmith vs. State Farm Insurance, the 4th District found in 2021 that Florida law, which prohibits audio recordings unless both parties agree, does not apply to an insurance inspection scenario. A year earlier, the 3rd District Court of Appeals declined to review a trial court order that allowed a recording of an inspection.
Those rulings rested in part on a 1994 Florida Supreme Court decision that persons objecting to being recorded in most cases must state “an actual subjective expectation of privacy,” and a societal recognition that the expection is reasonable.
In the American Strategic case, homeowners Ryan and Andrea Gesten suffered damage to their home from a plumbing problem in 2019, the court explained. Ryan Gesten, himself a trial attorney experienced in insurance claims litigation, hired a public adjuster to assist in the claim. The claim totaled $81,000.
The public adjuster informed the insurer that he would be recording the carrier’s home inspection.
“This is being done for the benefit of transparency and accountability for both parties,” the public adjuster wrote to the insurance company.
American Strategic objected to the audio recording. On the day of the planned inspection, ASI’s attorney, its adjuster and an independent expert showed up at the property. The public adjuster had a camera strapped on. The ASI lawyer objected and the parties could not come to terms. The inspection was never completed, the court explained.
ASI then petitioned the trial court to bar the audio recording. The Gestens sued for breach of contract. The Palm Beach court granted summary judgment in favor of the insurance carrier, and the appeal followed.
The court opinion and the original suit filed by ASI explain that ASI argued that the recording would violate the policy and state law, and that the insurer had no way to record the public adjuster’s inspection. And because ASI’s lawyer was present, that would create an attorney-client communications that should not be filmed, the complaint said.
“Finally, there is a genuine concern (over) what the public adjuster may do with the images and audio tape of these individuals,” ASI’s petition reads.
There’s also the fact that the homeowners’ public adjuster was Scott David Thomas, a man who has become notorious in the Florida insurance industry for making things difficult for insurance company adjusters and experts in recent years. The state Department of Financial Services, which regulates agents and adjusters, in March of this year filed an administrative complaint against Thomas, charging him with repeatedly stonewalling insurance company adjusters on property inspections.
In some instances, Thomas became belligerent and disparaging toward Citizens Property Insurance adusters and other adjusters, refused to answer questions, demanded proof of the other inspectors’ workers’ compensation insurance, requested background checks on inspectors, often changed agreed-on inspection dates and refused to meet except on Saturdays. Thomas could ultimately lose his license if an administrative ruling goes against him.
The appeals court decision in the ASI case may not settle the audio-recording question completely. Samuel Alexander, the appeals lawyer for the homeowners who was also the attorney in the 2021 Silversmith case, pointed out that the concurring-but-dissenting opinion by 4th DCA Judge Mark Klingensmith took issue with his colleagues’ reliance on the Silversmith decision.
The Silversmith opinion “is in direct conflict not only with the statute with our prior decisions” in two other cases, Klingensmith wrote. Florida law’s prohibition on recording without a subject’s consent “prohibits what the appellees want to do,” and provides no exception for business interactions or for when an adjuster is in someone’s home.
That could crack the door open for further litigation on the issue in coming years, partly because American Strategic’s lawyers did not raise some issues at the trial court level.
“Because our opinion here does not explicitly rest on Silversmith as controlling precedent, we do not need to revisit Silversmith for the purposes of deciding this matter,” Klingensmith wrote. “However, in the future, I would consider doing so in an appropriate case.”