                                                                                   [PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS
                                                                                FILED
                            FOR THE ELEVENTH CIRCUIT                  U.S. COURT OF APPEALS
                             _________________________                  ELEVENTH CIRCUIT
                                                                             JAN 04 2001
                                Nos. 99-4301and 99-10529                 THOMAS K. KAHN
                              _________________________                        CLERK


                          D. C. Docket No. 97-01485-CV-DLG

FLOYD JACOBS, RUTH JACOBS, his wife,

                                                 Plaintiffs-Counter-Defendants-Appellees,

       versus

NATIONWIDE MUTUAL FIRE INSURANCE COMPANY,

                                                  Defendant-Counter-Claimant-Appellant.


                            ____________________________

                      Appeals from the United States District Court
                          for the Southern District of Florida
                          ____________________________

                                      (January 4, 2001)


Before MARCUS, WILSON and MAGILL*, Circuit Judges.

______________________________________________
*Honorable Frank J. Magill, U.S. Circuit Judge for the Eighth Circuit, sitting by designation.
MAGILL, Circuit Judge:

      Floyd and Ruth Jacobs filed suit against Nationwide Mutual Fire Insurance

Company ("Nationwide") in Florida state court, seeking appraisal under the terms

of their Florida insurance contract. Nationwide removed the action to federal

district court based on diversity jurisdiction. The district court granted the Jacobs'

motion for summary judgment, compelling appraisal, and granted the Jacobs'

motion for attorney fees. Nationwide appeals both orders. The line of Florida

cases upon which the district court relied in reaching its decision has since been

overruled by the Third District Court of Appeal in United States Fidelity &

Guaranty Co. v. Romay, 744 So.2d 467 (Fla. 3d DCA 1999), which holds that

insureds must fulfill all of their post-loss obligations before seeking appraisal.

Accordingly, we vacate the order of the district court and remand for further

proceedings consistent with this opinion.

                                            I.

      On August 24, 1992, Hurricane Andrew caused substantial damage to the

home of Floyd and Ruth Jacobs. A homeowners' insurance policy issued by

Nationwide covered the Jacobs' property. After the Jacobs notified Nationwide of

the damage, Nationwide investigated their claim, adjusted the loss, and paid the

Jacobs approximately $37,000 in 1992.


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      In late 1996, the Jacobs hired East Coast Appraisers, Inc. ("East Coast") to

assess the damage to their home and make a supplemental claim on their behalf.

As a result of East Coast's appraisal, the Jacobs served Nationwide with a demand

letter on November 9, 1996, stating that Hurricane Andrew had caused damage to

their home totaling $104,120.27. The letter also stated that the failure to pay the

demand within five days would constitute a disagreement as to the amount of the

loss, entitling the Jacobs to appraisal under the insurance contract, which provided

that if the Jacobs and Nationwide:

      fail to agree on the amount of loss, either can demand that the amount
      be set by appraisal. If either makes a written demand for appraisal,
      each will select a competent, independent appraiser and notify the
      other of the appraiser's identity within 20 days of receipt of the written
      demand. The two appraisers will then select a competent, impartial
      umpire. If the appraisers cannot agree upon an umpire within 15 days,
      [the Jacobs or Nationwide] can ask a judge of a court of record in the
      state where the residence premises is located to select an umpire. The
      appraisers will then set the amount of the loss. If the appraisers
      submit a written report of an agreement to [Nationwide], the amount
      agreed upon will be the amount of the loss. If the appraisers fail to
      agree within a reasonable time, they will submit their differences to
      the umpire. Written agreement signed by any two of these three will
      set the amount of the loss.

      On November 25, 1996, Nationwide responded to the Jacobs' demand by

requesting a sworn proof of loss and other documentation of the claim. After the

Jacobs failed to comply with Nationwide's request, Nationwide repeated its request

on January 2, 1997, and also asked that the Jacobs submit to examinations under

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oath, as required by the insurance contract. The Jacobs failed to appear at

scheduled examinations on February 7, 1997 and February 27, 1997, but

eventually submitted to the examinations under oath on March 26, 1997.

      The parties disagree about what transpired at the examinations. Nationwide

contends that the Jacobs refused to submit a sworn proof of loss, produce requested

documents, or answer questions about their finances. Nationwide further contends

that the Jacobs deferred to their appraiser, East Coast, on a number of issues, but

refused to make East Coast available for examination under oath. The Jacobs

assert that they "submitted to approximately four (4) hours of interrogation . . . and

produced all of the documents requested by Nationwide, which the Jacobs had in

their possession, other than personal financial records, which the Jacobs objected

to." The Jacobs also claim that they answered Nationwide's questions to the best of

their ability and that the only Nationwide requests with which they failed to

comply were: (1) questions and document requests concerning their personal

finances; and (2) the request for a sworn proof of loss.

      After the examinations, the Jacobs filed suit in Florida state court, seeking to

compel arbitration under the appraisal provision in their insurance contract.

Nationwide removed the action to federal district court based on diversity

jurisdiction, and filed a third amended answer, affirmative defenses, and a


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counterclaim. Nationwide alleged, inter alia, that the Jacobs had failed to meet

their post-loss duties under the insurance contract. The relevant portion of the

contract states:

      2. Your Duties after Loss. In case of a loss, you must:
         a. give immediate notice to us or our agent . . . .
         b. protect the property from further damage. You must make repairs
            required to protect the property; also, keep a record of repair expenses.
         c. prepare a list of damaged personal property showing in detail the
            quantity, description, actual cash value, and amount of loss. Attach all
            bills and receipts that support the figures.
         d. as often as we reasonably require:
            (1) exhibit the damaged property;
            (2) submit to an examination under oath; and
            (3) provide records and documents we request and permit us to make
            copies.
         e. submit to us, within 60 days after we request, your signed, sworn
            proof of loss which sets forth, to the best of your knowledge and
            belief:
            (1) the time and cause of loss.
            (2) interest of the insured and all others in the property involved and
            all liens on the property.
            (3) other insurance that may cover the loss.
            (4) changes in title or occupancy of the property during the term of
            the policy.
            (5) detailed estimates for repair of damage.
            (6) a list of damaged personal property described in 2c.
            (7) receipts for additional living expenses and records supporting the
            fair rental value loss . . . .

As a result of their failure to fulfill their post-loss duties, Nationwide asserted that

the Jacobs had breached the insurance policy, that the policy was void, and that the

Jacobs had forfeited their right to appraisal or recovery under the policy.


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      On January 21, 1998, Nationwide moved for summary judgment on its

affirmative defenses. The Jacobs responded and moved for summary judgment on

both their application to compel arbitration and Nationwide's affirmative defenses.

On May 19, 1998, the district court granted the Jacobs' motion for summary

judgment on the application to compel arbitration, and denied both motions for

summary judgment on Nationwide's affirmative defenses. Nationwide then moved

for reconsideration of the district court's order.

      On February 13, 1999, the district court granted Nationwide's motion for

reconsideration in part, holding that under Allstate Insurance Co. v. Sierra, 705

So.2d 119 (Fla. 3d DCA 1998), and its progeny, the Jacobs were required to file a

sworn proof of loss to be entitled to appraisal. The court thus ordered the Jacobs to

submit a proof of loss prior to appraisal. On February 17, 1999, Nationwide

moved for clarification of the district court's order. On November 19, 1999, the

court denied Nationwide's motion, stating that its February 13 order was a final

determination regarding the Jacobs' application to compel arbitration and denying

as moot Nationwide's defenses and counterclaims.

      The Jacobs moved for attorney fees on February 24, 1999, and filed a sworn

proof of loss on March 5, 1999. The magistrate judge granted the Jacobs' motion

for fees on March 23, 1999. On April 5, 1999, the district court overruled


                                            6
Nationwide's objections and approved the magistrate's order. Nationwide filed two

notices of appeal, one from the district court's order compelling arbitration and

another from the award of attorney fees, and moved for a stay of appraisal pending

appeal. The district court granted Nationwide's motion for a stay, but required

posting of a $150,000 bond as a condition of the stay.

                                           II.

      The district court granted the Jacobs' application to compel appraisal,

conditioned only upon their filing of a sworn proof of loss statement. We review

this decision de novo. See Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10

F.3d 753, 756 (11th Cir. 1993).

      Nationwide asserts that the district court erred in ordering appraisal before

the Jacobs had satisfied all their post-loss obligations under the contract. In

reaching its decision, the district court relied on a line of Florida Third District

Court of Appeal cases holding that submission of a sworn proof of loss statement

is the sole condition that an insured must fulfill prior to invoking its right to

appraisal. See Allstate Ins. Co. v. Sierra, 705 So.2d 119 (Fla. 3d DCA 1998);

Llaguno v. ARI Mut. Ins. Co., 719 So.2d 311 (Fla. 3d DCA 1998).

      On August 25, 1999, after Nationwide filed both of its notices of appeal, the

Third District Court of Appeal, sitting en banc, overruled Allstate Insurance


                                            7
Company v. Sierra and its progeny. See United States Fidelity & Guar. Co. v.

Romay, 744 So.2d 467 (Fla. 3d DCA 1999).1 As in this case, the policy at issue in

Romay required the insureds to perform certain prerequisites before the appraisal

clause was triggered, such as: "submit a sworn proof of loss and supporting

documents; submit to an examination under oath; and make the property available

for inspection." Id. at 469. The insureds in Romay had failed to meet any of the

post-loss obligations other than submission of the sworn proof of loss. Id. The

trial court granted their petition to compel arbitration because, under Sierra, filing

of a sworn proof of loss was the only precondition to appraisal. The insurer

appealed, and the Third District altered its position that an insured need only

submit a sworn proof of loss to be entitled to appraisal, instead holding that the

insured must meet all post-loss obligations imposed by the insurance policy in

question before appraisal may be compelled. See id. at 468.

       Romay requires the Jacobs to fulfill all of their post-loss obligations under

the insurance policy with Nationwide before invoking their right of appraisal.

These obligations include: (1) providing immediate notice to the insurer; (2)

protecting the property from further damage; (3) exhibiting the damaged property;



       1
          Although Romay was decided after the district court rendered summary judgment in
this case, both parties agree that it governs the result in this case.

                                              8
(4)   submitting to examination under oath; and (5) providing records and

documents requested by the insurance company. Accordingly, we must reverse the

district court's order holding that submission of a sworn proof of loss is the sole

precondition to appraisal.

                                         III.

      Nationwide asserts that the Jacobs have failed to fulfill their post-loss

obligations, and that, as a result, this court must remand with directions to enter

judgment for Nationwide. Nationwide also contends that the district court erred in

failing to adjudicate its affirmative defenses. The Jacobs respond that they have

fully satisfied Romay by complying with their post-loss obligations, and that the

district court fully adjudicated Nationwide's defenses in its February 13, 1999 and

November 19, 1999 orders. Accordingly, the Jacobs contend, they should be

permitted to immediately invoke their right to appraisal.

      The insurance contract between the parties requires the Jacobs to fulfill

several post-loss duties, including: (1) submitting to an examination under oath;

and (2) supplying Nationwide with records and documents at its request.

Nationwide conducted examinations of the Jacobs under oath on April 4, 1997. At

their examinations under oath, the Jacobs answered some questions but refused, or

were unable, to answer others. Also on April 4, the Jacobs provided Nationwide


                                           9
with some of the documents it had requested but objected to the production of

others.

      Thus, there remain genuine issues of material fact regarding whether, by

responding to some, but not all, of Nationwide's questions and document requests,

the Jacobs have fulfilled their post-loss duties and thus satisfied the requirements

of Romay. Accordingly, we must remand to the district court to determine whether

the Jacobs have fulfilled their post-loss obligations, and whether the Jacobs are

entitled to appraisal.

      In addition, it appears that as a result of its conclusion that submission of a

sworn proof of loss was the only precondition to appraisal, the district court

summarily denied as moot Nationwide's affirmative defenses, which arose from the

Jacobs' failure to fulfill their other post-loss obligations. Based on the foregoing,

we must reverse this denial and remand to the district court with instructions to

fully adjudicate Nationwide's affirmative defenses.

                                          IV.

      In granting the Jacobs' motion for attorney fees, the court found that because

the Jacobs obtained a declaratory judgment compelling appraisal, they were

prevailing parties and thus entitled to attorney fees. Under the new standard

announced in Romay, the Jacobs may not have fulfilled the preconditions to


                                          10
appraisal, and thus may no longer be prevailing parties. Accordingly, we must

vacate the district court's award of attorney fees, pending its determination of

whether the Jacobs have satisfied the requirements of Romay.

                                          V.

      For the foregoing reasons, we REVERSE the judgment of the district court

and REMAND for further proceedings consistent with this opinion.




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