       DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

            STATE FARM FLORIDA INSURANCE COMPANY,
                           Appellant,

                                     v.

                         JOSEPH VALENTI, JR.,
                              Appellee.

                               No. 4D19-205

                           [December 11, 2019]

   Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; William W. Haury, Jr., Judge; L.T. Case No. CACE-18-
004015.

   Kara Berard Rockenbach, David A. Noel, and Daniel M. Schwarz of Link
& Rockenbach, PA, West Palm Beach, for appellant.

  Matthew G. Struble and Christine D. Skubala of Struble, P.A., Fort
Lauderdale, for appellee

PER CURIAM.

   An insurer appeals a final judgment entered against it in favor of its
insured. The sole issue on appeal relates to the meaning of “disinterested
appraiser” in the insurance policy’s appraisal clause. Can an insured’s
public adjuster later be appointed the insured’s disinterested appraiser?
The circuit court found that the public adjuster could. On the facts here,
we disagree and reverse the circuit court’s judgment.

   A leak in the insured’s home caused water damage. Two weeks later,
the insured signed an agreement with a public adjuster. As part of the
agreement, the insured assigned 20% of any recovery from the insurance
company to the public adjuster. The agreement stated that “[a]s security
for payment of policyholder’s obligations to the [public adjuster]. . . , the
Policyholder hereby assigns the [public adjuster] that portion of the
insurance proceeds sufficient to pay the [public adjuster]’s fees . . . .”

   After the insured retained the public adjuster, the public adjuster
contacted the insurer about the claim, attended the property inspection,
and sent follow-up correspondence about the inspection to the insurer.
Ultimately, the insurer sent payment for its valuation of the loss and
demanded appraisal to resolve any remaining dispute about the valuation.
The appraisal clause in the insurance policy controls the process and
states in part:

         Each party will select a qualified, disinterested
         appraiser and notify the other of the appraiser’s identity
         within 20 days of receipt of the written demand. Each
         party shall be responsible for the compensation of their
         selected appraiser. The two appraisers shall then select a
         qualified, disinterested umpire. If the two appraisers are
         unable to agree upon an umpire within 15 days, you or we
         can ask a judge of a court of record in the state where the
         residence premises is located to select an umpire. Reasonable
         expenses of the appraisal and the reasonable compensation of
         the umpire shall be paid equally by you and us.

(emphasis added).

   After the demand for appraisal, the public adjuster sent a letter to the
insurer naming himself the insured’s appraiser. The insurer objected to
the public adjuster’s appointment of himself, arguing that the
appointment of the public adjuster violated the policy’s requirement that
the parties select a “qualified, disinterested appraiser.” The insured
disagreed and filed an action for declaratory relief in the circuit court.

   After a hearing, the circuit court entered summary judgment in the
insured’s favor, finding “as a matter of law that [the insured’s] public
adjuster can be his ‘disinterested’ appraiser.” That conclusion was
generally based on two opinions from the Third District with now-
questionable futures—Rios v. Tri-State Insurance Co., 714 So. 2d 547 (Fla.
3d DCA 1998), and Galvis v. Allstate Insurance Co., 721 So. 2d 421 (Fla.
3d DCA 1998). See State Farm Fla. Ins. Co. v. Sanders, 44 Fla. L. Weekly
D1901 (Fla. 3d DCA July 24, 2019) (finding the insured’s public adjuster
could not act as a disinterested appraiser under the insurance policy
where the public adjuster, by separate contract, would receive 10% of any
insurance recovery). 1

  The insurer asks that we conclude, as a matter of law, that an insured’s
public adjuster cannot later be appointed the insured’s disinterested
appraiser where there is a contingency-fee arrangement. But we can

1
    A motion for rehearing en banc remains pending in Sanders.

                                        2
resolve this issue on narrower grounds: the actions of the insured’s
appraiser combined with his financial interest.

   Here, the insured signed a contract with the public adjuster entitling
the public adjuster to a portion of any recovery from the insurer and
assigning a portion of the claim to the public adjuster. Next, the public
adjuster inspected the property and submitted the claim to the insurance
company. Later, the public adjuster sent a letter appointing himself the
appraiser.

   On the facts of this case, we easily conclude the public adjuster was
not “disinterested” and reverse the circuit court’s judgment. On remand,
the circuit court should enter judgment for the insurer on the issue of this
specific public adjuster’s ability to serve as the disinterested appraiser for
this insured.

   Reversed and remanded.

CONNER, KLINGENSMITH and KUNTZ, JJ., concur.
KUNTZ, J., concurs specially with opinion.
CONNER, J., concurs specially with opinion.

KUNTZ, J., concurring specially.

   I join the Court’s opinion in full. But I would also directly address the
broader—and simple—question the insurer raises: Is a person
disinterested in an insurance claim if the person is entitled to a percentage
of the recovery from the same insurance claim? The answer, like the
question, is simple: No. This conclusion is supported by the policy’s plain
language as well as case law assessing an appraiser’s disinterest.

                              I.    Appraisal

   Appraisal is a contractual process controlled by the terms of an
insurance policy. Fla. Ins. Guar. Ass’n v. Branco, 148 So. 3d 488, 491 (Fla.
5th DCA 2014) (citation omitted); see also Allstate Ins. Co. v. Suarez, 833
So. 2d 762, 766 (Fla. 2002).

    Typically, those terms are in the insurance policy’s appraisal clause.
“Appraisal clauses are preferred, as they provide a mechanism for prompt
resolution of claims and discourage the filing of needless lawsuits.” Fla.
Ins. Guar. Ass’n v. Olympus Ass’n, 34 So. 3d 791, 794 (Fla. 4th DCA 2010)
(citation omitted). The appraisal process determines “the amount of a loss”
but leaves questions of coverage for the court. State Farm Fire & Cas. Co.

                                      3
v. Licea, 685 So. 2d 1285, 1287-88 (Fla. 1996); see also Olympus Ass’n,
34 So. 3d at 796.

                     II.    Disinterested Appraisers

i.    Disinterested Defined

   The insurance policy in this case requires the appointment of a
qualified and disinterested appraiser. But the word disinterested is not
defined in the policy. When a word in an insurance policy is not defined,
“the first step towards discerning the plain meaning of the [word] is to
‘consult references [that are] commonly relied upon to supply the accepted
meaning of [the] word[].’” Penzer v. Transp. Ins. Co., 29 So. 3d 1000, 1005
(Fla. 2010) (second and third alterations in original) (quoting Garcia v. Fed.
Ins. Co., 969 So. 2d 288, 292 (Fla. 2007)).

   “Indeed, in construing terms appearing in insurance policies, Florida
courts commonly adopt the plain meaning of words contained in legal and
non-legal dictionaries.” Barcelona Hotel, LLC v. Nova Cas. Co., 57 So. 3d
228, 231 (Fla. 3d DCA 2011) (internal quotation marks and citation
omitted); see also Gov’t Emps. Ins. Co. v. Macedo, 228 So. 3d 1111, 1113
(Fla. 2017).

   Turning to legal and non-legal dictionaries, the term disinterested is
defined as “not having the mind or feelings engaged,” “no longer
interested,” and “free from selfish motive or interest.” Disinterested,
Merriam-Webster’s Collegiate Dictionary 358 (11th ed. 2003).                The
American Heritage Dictionary of the English Language defines
disinterested as “[f]ree of bias and self-interest; impartial,” and, in a usage
note, elaborates that “[t]raditionally, disinterested can only mean ‘having
no stake in an outcome[.]’ . . .” Disinterested, The American Heritage
Dictionary of the English Language 518 (5th ed. 2016) (emphasis removed).

   Similarly, Garner’s Modern English Usage explains that “[a]
disinterested observer is not merely ‘impartial’ but has nothing to gain
from taking a stand on the issue in question.” Bryan A. Garner, Garner’s
Modern English Usage 290 (4th ed. 2016). That matches the meaning in
legal dictionaries, which define disinterested as “not having a pecuniary
interest in the matter at hand.” Disinterested, Black’s Law Dictionary
(11th ed. 2019).

   These sources are clear that the plain and ordinary meaning of
disinterested includes free of self-interest or pecuniary interest. When an


                                      4
appraiser has a direct financial interest in the outcome of the appraisal,
the appraiser is not disinterested.

ii.   Caselaw Analyzing the Disinterested Appraiser

   In addition to the policy’s plain meaning, opinions analyzing the ability
of a person to serve as a disinterested appraiser support my conclusion
that a person entitled to a percentage of any recovery is not disinterested.

   Although “appraisers do not violate their commitment [to the process]
by acting as advocates for their respective selecting parties,” appraisers
“should be in a position to act fairly and be free from suspicion or unknown
interest.” Cent. Life Ins. Co. v. Aetna Cas. & Sur. Co., 466 N.W.2d 257, 261
(Iowa 1991). In Central Life Insurance Co., the Iowa Supreme Court held
that “[d]ue to the contingent fee arrangement, Central’s appraiser was
interested because he had a direct financial interest in the dispute.” Id.

    In reaching a contrary conclusion, the circuit court in this case cited
two decisions from the Third District: Rios v. Tri-State Insurance Co., 714
So. 2d 547 (Fla. 3d DCA 1998), and a one-paragraph decision, Galvis v.
Allstate Insurance Co., 721 So. 2d 421 (Fla. 3d DCA 1998). In Rios, the
insurance policy required the selection of a “competent, independent
appraiser.” 714 So. 2d at 548 (emphasis removed). The threshold
question before the court was “how to interpret the term ‘independent
appraiser’ as used in the insurance policy.” Id. at 549. Turning to the
dictionary definition of “independent,” the court concluded that
“independent appraiser” meant “that a party cannot appoint himself,
herself, or itself, . . . nor can a party appoint the party’s employee.” Id.
(internal citation omitted).

   There, like in this case, the insurer asked the court to conclude that an
appraiser “whose pay is based, in whole or in part, on a contingent fee
percentage of the award” cannot be independent. Id. The Third District
declined to do so, relying on the then-current version of the Code of Ethics
for Arbitrators in Commercial Disputes, “promulgated jointly” by the
American Arbitration Association and American Bar Association. Id. at
550. The court concluded the Code of Ethics required disclosure of an
interest in the outcome and held that an appraiser was not impartial if the
interest was properly disclosed. Id.

   In Galvis, the Third District cited Rios and concluded an appraiser is
not disinterested simply because of a contingency-fee agreement. 721 So.
2d at 421. That decision provided little analysis and failed to explain why
a change in the wording of the policy to require a “competent and

                                     5
disinterested appraiser” was irrelevant to the conclusion. But in a later
case, Judge Cope, the author of the Rios opinion, stated that if an insurer
wants neutral appraisers, the insurer should amend the policy language.
Citizens Prop. Ins. Corp. v. M.A. & F.H. Props., Ltd., 948 So. 2d 1017, 1021
(Fla. 3d DCA 2007) (Cope, C.J., concurring). Judge Cope was correct, and
it seems amending the policy language is what the insurer did here. The
policy language should resolve this issue and, in this case, the policy
requires a disinterested appraiser.

    Regardless, “Rios was largely premised on the then-existing version” of
the arbitrators’ Code of Ethics. Shores at Coco Plum Condo. Ass’n v.
Westchester      Surplus    Lines     Ins.   Co.,    No.     18-23910-Civ-
COOKE/GOODMAN, 2019 WL 2223172, at *2 (S.D. Fla. Apr. 29, 2019)
(citing Branco, 148 So. 3d at 495). Since Rios, the Florida Supreme Court
has held that appraisal is not arbitration and that “the formal procedures
of the Arbitration Code” do not govern an appraisal. Suarez, 833 So. 2d
at 766.

   I believe the Rios and Galvis decisions are distinguishable based on
their reliance on the arbitration code. If they are not distinguishable, I
believe they were incorrectly decided.

    So too might the Third District, based on in its decision in State Farm
Florida Insurance Co. v. Sanders, 44 Fla. L. Weekly D1901 (Fla. 3d DCA
July 24, 2019). There, the insurer petitioned to quash a circuit court order
allowing the insureds’ public adjuster to serve as their disinterested
appraiser. Id. The public adjuster was also the insureds’ agent under a
contract allowing “the agent and representative, under the insurance
contract by State Farm Insurance . . . to adjust, appraise, advise, and
assist in the settlement of the loss.” Id.

    For at least three reasons, the Third District found the public adjuster
was interested. Id. (citing Branco, 148 So. 3d at 491). First, the court
relied on the contract between the insureds and the public adjuster. Id.
Second, the court noted that Florida law regulates public adjusters, see §
626.854, Fla. Stat. (2018), and requires public adjusters to “put the honest
treatment of the claimant above the adjuster’s own interests in every
instance,” Sanders, 44 Fla. L. Weekly D1901 (quoting Fla. Admin. Code R.
69B-220-201(3) (2015)). Third, the court determined that the public
adjuster’s contingency fee disqualified him. Id.

   The Sanders court also relied, in large part, on the Fifth District’s
decision in Branco. In Branco, the insured suffered sinkhole damages and
reported a claim to the insurer. 148 So. 3d at 490. Once the Florida

                                     6
Insurance Guaranty Association assumed responsibility for the claim, it
acknowledged coverage, and the insureds demanded appraisal. Id. That
appraisal clause required each party to select a “competent and
disinterested appraiser.” Id. at 491 (emphasis removed). Despite the
policy language, the insureds chose their attorney to serve as their
disinterested appraiser. Id. at 494.

   The Fifth District concluded the insureds’ attorney could not serve as
their disinterested appraiser. Id. at 496. The court distinguished Rios on
the basis that it “was in large part premised on, and extensively quoted
from, the then-existing version of the Code of Ethics for Arbitrators in
Commercial Disputes . . . .” Id. at 495 (citing Rios, 714 So. 2d at 550).
But the Branco court noted:

      That version of the Code of Ethics did not explicitly address
      the neutrality of arbitrators, but simply required disclosure of
      any direct or indirect financial interest in the outcome of the
      proceeding. However, the revised Code of Ethics adopted by
      AAA and ABA, effective since March 1, 2004, changes the
      landscape considerably, thus, undercutting the continued
      viability of the holding in Rios.

Id.    The court held that “[t]he policy provision, which requires a
‘disinterested appraiser,’ expresses the parties’ clear intention to restrict
appraisers to people who are, in fact, disinterested.” Id. at 496. Based on
the duty of loyalty an attorney owes to her client, that attorney cannot
serve as a disinterested appraiser. Id. (footnote and citations omitted).

   I agree with the portions of the opinions in Branco and Sanders
discussed above. It is simple: A person with a direct financial interest in
the outcome is not disinterested.

    We need not limit our review to those few Florida state court decisions.
The policy at issue in Verneus v. Axis Surplus Insurance Co. required the
selection of a competent appraiser, but when the court ordered appraisal,
it required the selection of a competent and impartial appraiser. No. 16-
21863-CIV-MARTINEZ/GOODMAN, 2018 WL 3417905, at *2,*4,*5 (S.D.
Fla. July 13, 2018). The insurance company challenged the insured’s
selected appraiser because the appraiser had acted as an adjuster for the
insured and even submitted the claim. Id. at *6. In addition, the appraiser
owned the adjusting firm, and there was an extensive history between the
appraiser and the insured’s counsel. Id. at *7. Based on these and other
factors, the court concluded the appraiser was not impartial. Id.


                                     7
   In another case, the court reached the same conclusion when applying
a policy that required the appointment of a competent and impartial
appraiser. See Shores at Coco Plum, 2019 WL 2223172, at *2. The court
held that “[i]t is well-settled that an appraiser with a financial interest in
the outcome of an appraisal is not impartial”:

      Simply put, Mr. Downs is not an impartial appraiser. Here,
      Coco Plum admits that it intends that Mr. Downs be
      compensated on a contingency fee basis. Further, Coco Plum
      does not dispute that Mr. Downs has already prepared an
      estimate of the Property. By virtue of the contingency
      compensation plan, Mr. Downs has a vested interest in
      appraising the Property at the highest possible recovery
      because his compensation will be a percentage of the
      appraisal.

Id. at *2 (citations omitted).

   Similarly, in Landmark American Insurance Co. v. H. Anton Richardt,
DDS, PA, the court explained that a “pecuniary interest in the outcome is
by definition a personal interest that favors one side over the other.” No.
2:18-cv-600-FtM-29UAM, 2019 WL 2462865, at *3 (M.D. Fla. June 13,
2019). As a result, the court held that a person with a contingency fee
agreement could not serve as the impartial appraiser. Id.

   The court in Harris v. American Modern Homes Insurance Co. explained
that “an appraiser becomes interested or biased by having a direct or
indirect financial interest in the outcome of the appraisal.” 571 F. Supp.
2d 1066, 1078 (E.D. Mo. 2008) (citation omitted). That court held
“appraisers are not required to be entirely impartial.” Id. (citation omitted).
But “[w]hile an appraiser may receive a flat or hourly fee, he may not
receive a contingent fee; the appraiser’s fee may not be based on a
percentage of the settled loss.” Id. (citations omitted). In Harris, the
appraiser’s fee was $300 plus 15% of the final appraised value. Id. at
1079. The court held that the contingent fee gave the appraiser “a direct
financial interest in the ultimate appraisal award, a fee that would increase
as the appraisal amount increased.” Id. The appraiser’s contingent fee
rendered him interested and ineligible to serve as a disinterested
appraiser. Id.

    I recognize that there is some disagreement on this issue beyond the
language found in Rios. But, as in Rios, much of the disagreement turns
on the specific contractual language in the policy or on facts that are not
like those in this case. See, e.g., Hatter v. Guardian Ins. Co., No. 1:18-cv-

                                      8
00041, 2019 WL 1509995, at *2-3 (D.V.I. Apr. 5, 2019); Prien Props., LLC
v. Allstate Ins. Co., No. 07 CV 845, 2008 WL 1733591, at *3, *4 (W.D. La.
Apr. 14, 2008); Dawes v. Cont’l Ins. Co. of City of N.Y., 1 F. Supp. 603, 605
(E.D. La. 1932); Hozlock v. Donegal Cos./Donegal Mut. Ins. Co., 745 A.2d
1261, 1265 (Pa. Super. Ct. 2000).

   With minimal exception, these cases discuss a prior relationship
between the parties. That, in my opinion, differs from a person with a
direct financial interest in the insurance recovery. I find the authority
concluding that a party with a financial interest cannot be disinterested to
be more persuasive. When a person receives more money based on the
amount of the award, the person has a direct interest in the outcome.
While that person might be a competent appraiser, he is not a disinterested
appraiser.

                             III.   Conclusion

   I would hold that a person with a direct financial interest in the amount
recovered from an insurance claim cannot be disinterested. But, because
the panel’s opinion reaches the same result, and on grounds that I also
agree with, I join the panel’s opinion reversing the circuit court’s judgment.

CONNER, J., concurring specially.

    I agree with much of the analysis presented by Judge Kuntz’s special
concurrence. But I am not so sure the question of whether a contingency
fee makes an appraiser “interested,” instead of “disinterested,” is as simple
as Judge Kuntz suggests.

    For me, there are two factors which establish the insured’s public
adjuster in this case was not “disinterested.” First, the partial assignment
of the claim puts the public adjuster to some extent in the shoes of the
insured, and for me there is no doubt that a party to the claim is not
“disinterested.” Thus, it is significant that the public adjuster picked
himself to be one of the appraisers to resolve the claim. Second, the fact
that the compensation paid to the public adjuster for his work is keyed to
a percentage of the recovery by the insured leads me to conclude the public
adjuster is not “disinterested,” because his fee arrangement arguably gives
him a financial incentive to be less objective.

   But the interplay between financial interest in the claim and the status
of being “disinterested” is a bit complicated. One of the problems in this
case is that on appeal, the insured raised policy arguments about the
contingency fee arrangement that were not addressed in the summary

                                      9
judgment. More specifically, the insured argued, particularly at oral
argument, that if this Court takes a categorical position and declares that
a contingency fee arrangement with an appraiser disqualifies the appraiser
for not being “disinterested,” insureds will have a difficult time hiring
appraisers. In addition to the trial court not addressing the argument,
there was no summary judgment evidence to support the argument. For
that reason, I am hesitant to take a categorical position on the issue of a
contingency fee being a disqualifier. To me, it is better to wait for another
case to decide that issue where the record is better developed.

   Additionally, I struggle with the notion that a contingency fee
arrangement categorically makes one more financially interested in the
outcome of the case than a flat fee arrangement. Just as it is frequently
the case in personal injury cases that experts are hired more often by one
side or the other, I suspect the same is true with appraisers for property
insurance claims. Is an appraiser that seeks to be hired regularly by one
side more objective than the appraiser who is hired on a contingency fee
arrangement?

   In addition to the two factors discussed above which persuade me to
conclude that the public adjuster in this case was not “disinterested,”
there is an additional reason for my conclusion. The insurance policy
provides that the appraisal process can be invoked only after there is a
disagreement between the parties on the amount to be paid for the loss.
That would typically mean that someone on each side has evaluated and
determined an estimated value for the loss, after reviewing the premises
and determining what needs to be replaced or repaired. Under the
appraisal process, the timing of the sequence of events leads me to
conclude that the intent of the parties, in agreeing that “disinterested”
appraisers are to be selected, was for the selected appraisers to provide a
fresh set of eyes or new perspective to evaluate the value of the claim.
Aside from the fact that the public adjuster in this case picked himself to
be an appraiser, it is clear from the record that the public adjuster would
not have provided a fresh set of eyes or new perspective to the valuation
process.

   For the reasons expressed above, I agree the public appraiser in this
case could not properly serve as a “disinterested” appraiser and concur
with the majority opinion.

                            *        *         *

   Not final until disposition of timely filed motion for rehearing.


                                     10
