Florida Federal Judge Delays Ruling on Insurance Coverage Due to State Court Split

FORT MYERS (LN) — U.S. District Judge Kenneth Condon on Tuesday paused Steadfast Insurance Company’s motion for summary judgment, directing the parties to address how a recent Florida Sixth District Court of Appeal decision impacts the interpretation of their insurance policy’s replacement cost provisions.

The dispute centers on whether Riva Del Lago Condominium Association, Inc. is entitled to replacement cost and ordinance or law coverage for property damage that has not yet been repaired or replaced.

Steadfast argued in its summary judgment motion that the plaintiff is not entitled to such coverage because it has not completed repairs. The insurer contended that since the repairs are unfinished, the potential recovery is limited to the actual cash value of the lost or damaged property.

The question of what damages are allowed under the parties’ insurance policy is a matter of Florida law. Federal courts are bound to adhere to decisions of the state’s intermediate appellate courts unless there is persuasive indication that the state’s highest court would decide otherwise.

State courts appear split on the consequence of contractual language that limits an insurer’s liability for replacement cost coverage until damaged items have been repaired.

The judge noted a conflict between the Second District Court of Appeal’s decision in Brito v. Citizens Property Insurance Corp. and the Fourth District Court of Appeal’s ruling in Universal Property & Casualty Insurance Co. v. Qureshi.

Since Steadfast filed its summary judgment motion, the Sixth District Court of Appeal, which covers the geographic area of this court, has weighed in on the issue.

In Universal Property & Casualty Insurance Co. v. Rodriguez, the Sixth District Court of Appeal ruled that in an action precipitated by a denial of coverage that allegedly breached the insurance contract, the fact that the insurance contract makes such replacement cost payments contingent on costs having already been incurred does not foreclose adjudication of what those replacement costs would be had the insurer complied with the policy.

The judge ordered the parties to file supplemental briefing on or before May 28, 2026, addressing the applicability of Rodriguez to the policy and facts in this case.