               NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
                      MOTION AND, IF FILED, DETERMINED


                                             IN THE DISTRICT COURT OF APPEAL
                                             OF FLORIDA
                                             SECOND DISTRICT




THE CINCINNATI INSURANCE                     )
COMPANY, a foreign corporation doing         )
business in the State of Florida,            )
                                             )
              Appellant,                     )
                                             )
v.                                           )      Case No. 2D14-827
                                             )
CANNON RANCH PARTNERS, INC.,                 )
a Florida corporation,                       )
                                             )
              Appellee.                      )
                                             )

Opinion filed October 17, 2014.

Appeal pursuant to Fla. R. App. P. 9.130
from the Circuit Court for Hillsborough
County; Sam D. Pendino, Judge.

Guy E. Burnette, Jr., of Guy E. Burnette, Jr.,
P.A., Tallahassee, for Appellant.

John J. Thresher and Kimberly D. Thresher
of Thresher and Thresher, P.A., Tampa, for
Appellee.



VILLANTI, Judge.
             The Cincinnati Insurance Company seeks review of the order denying its

motion to compel appraisal and abate litigation.1 Because the matter in dispute is one

subject to appraisal, we reverse and remand for further proceedings.

             Cincinnati Insurance insures a piece of commercial real property owned

by Cannon Ranch Partners, Inc. The Cannon Ranch policy includes coverage for

sinkhole damage. On August 14, 2012, Cannon Ranch discovered structural damage

on its property and subsequently filed a claim with Cincinnati Insurance. Cincinnati

Insurance sent a letter to Cannon Ranch confirming the receipt of the claim and

advising that an investigator would inspect Cannon Ranch's property to determine the

cause of the damage. The investigator hired by Cincinnati Insurance, AMEC

Environmental and Infrastructure, determined that the damage was caused by a

sinkhole. AMEC recommended that perimeter compaction grout and shallow chemical

grout be applied to remediate the sinkhole activity at a cost of roughly $220,000. AMEC

further determined that underpinning was not necessary to repair Cannon Ranch's

property.

             Cincinnati Insurance provided AMEC's report to Cannon Ranch. After

reviewing AMEC's report, Cannon Ranch contacted Cincinnati Insurance to express

concern that AMEC did not include underpinning in its repair recommendation and that

AMEC was biased in its investigation because it had been hired by Cincinnati

Insurance. In response, Cincinnati Insurance offered Cannon Ranch the opportunity to

nominate a list of five investigators, one of which would be chosen by Cincinnati

Insurance to conduct a second investigation. Using this method, C.E. Odell &



             1
                 We have jurisdiction. See Fla. R. Civ. P. 9.130(a)(3)(C)(iv).


                                             -2-
Associates was hired to reinspect Cannon Ranch's premises. C.E. Odell conducted a

survey and determined that underpinning was necessary in addition to the grouting

procedure recommended by AMEC, and it estimated that the repairs would cost

approximately $495,945.

              At Cincinnati Insurance's insistence, a third company, Geohazards,

conducted a peer review of the reports from both AMEC and C.E. Odell. Geohazards

determined that underpinning was not necessary and furthermore that AMEC's testing

was insufficient to establish that even shallow chemical grout was required to restore

the property to its pre-sinkhole state.

              Following its receipt of these divergent reports, Cannon Ranch entered

into a contract with RAB Foundation Repair LLC to perform repairs, including

underpinning, on the property consistent with the recommendations of C.E. Odell at an

estimated cost of $566,755. However, according to its terms, the contract was

contingent on Cincinnati Insurance's approval. Not unexpectedly, Cincinnati Insurance

refused to approve the contract because the repairs were not based on the

recommendations of AMEC or Geohazards. Instead, Cincinnati Insurance sent a letter

to Cannon Ranch demanding an appraisal of the damage and citing the following

provision from paragraph 2, Section D of the insurance policy:

              If we and you disagree on the value of the property, the
              amount of Net Income and operating expense, or the
              amount of "loss," either may make written demand for an
              appraisal of the "loss." In this event, each party will select a
              competent and impartial appraiser. The two appraisers will
              select an umpire. If they cannot agree, either may request
              that selection be made by a judge of a court having
              jurisdiction. The appraisers will state separately the value of
              the property, the amount of Net Income and operating
              expense, and amount of "loss." If they fail to agree, they will



                                            -3-
              submit their differences to the umpire. A decision agreed to
              by any two will be binding. Each party will:

              a. Pay its chosen appraiser; and

              b. Bear the other expenses of the appraisal and umpire
                 equally.

              If there is an appraisal, we still retain our right to deny the
              claim.

(Emphasis added.) Cannon Ranch refused to participate in the appraisal process and

brought suit against Cincinnati Insurance for breach of contract. Cincinnati Insurance

subsequently filed its motion to abate the litigation and compel appraisal.

              At the hearing on the motion, Cincinnati Insurance argued that the

disagreement on the appropriate method of repair and the estimated costs of restoration

was a dispute over the amount of "loss" that was subject to appraisal under the terms of

the insurance policy. In response, Cannon Ranch argued that the method of repair was

a matter of coverage, which is exclusively a judicial question. Cannon Ranch also

argued that Cincinnati Insurance had no right to appraisal under the policy because

disputes over coverage do not trigger the appraisal clause found in paragraph 2,

Section D of the insurance policy. The court denied the motion, finding that appraisal

was not mandatory under the terms of the insurance policy. Cincinnati Insurance now

appeals, arguing that the trial court erred in finding that appraisal was not mandatory

due to the language of the insurance policy and that there was no right to an appraisal

because the issue in dispute is one of the amount of loss and not one of coverage. We

agree on both points.

              First, the trial court erred in finding that appraisal was not mandatory

under the language of the insurance policy. In its oral ruling, the trial court found that



                                             -4-
Cincinnati Insurance could not demand appraisal because the insurance policy's

appraisal clause allowed Cincinnati Insurance to retain the right to deny the claim

following a proper appraisal. While the trial court did not expound on the reasoning

behind its decision, it could not have found the appraisal clause to be unenforceable

unless the clause violated either statutory law or public policy. See Green v. Life &

Health of Am., 704 So. 2d 1386, 1390-91 (Fla. 1998). Cannon Ranch points to no

statutes or public policy considerations that are violated by this "retained rights"

provision. Moreover, controlling Florida law permits "retained rights" provisions, and

these provisions do not render the appraisal clause unenforceable. See State Farm

Fire & Cas. Co. v. Licea, 685 So. 2d 1285, 1288 (Fla. 1996). Hence, the trial court

erred to the extent it found that Cincinnati Insurance could not demand an appraisal due

to the language of the appraisal clause being unenforceable as inconsistent or violative

of public policy.

              Second, the trial court erred in finding that there was no right to an

appraisal because the issue in dispute is in fact one of the amount of loss and not one

of coverage. In Florida, "[a] challenge of [c]overage is exclusively a [j]udicial question."

Midwest Mut. Ins. Co. v. Santiesteban, 287 So. 2d 665, 667 (Fla. 1973). However,

"when the insurer admits that there is a covered loss," any dispute on the amount of

loss suffered is appropriate for appraisal. Johnson v. Nationwide Mut. Ins. Co., 828 So.

2d 1021, 1025 (Fla. 2002) (quoting Gonzalez v. State Farm Fire & Cas. Co., 805 So. 2d

814, 816-17 (Fla. 3d DCA 2000)). Notably, in evaluating the amount of loss, an

appraiser is necessarily tasked with determining both the extent of covered damage and

the amount to be paid for repairs. Id. Thus, the question of what repairs are needed to




                                            -5-
restore a piece of covered property is a question relating to the amount of "loss" and not

coverage. Ipso facto, the scope of damage to a property would necessarily dictate the

amount and type of repairs needed to return the property to its original state, and an

estimate on the value to be paid for those repairs would depend on the repair methods

to be utilized. The method of repair required to return the covered property to its

original state is thus an integral part of the appraisal, separate and apart from any

coverage question. Because there is no dispute between the parties that the cause of

the damage to Cannon Ranch's property is covered under the insurance policy, the

remaining dispute concerning the scope of the necessary repairs is not exclusively a

judicial decision. Instead, this dispute falls squarely within the scope of the appraisal

process—a function of the insurance policy and not of the judicial system. Therefore,

Cincinnati Insurance acted within its rights when it demanded an appraisal, and the trial

court erred in denying the motion on this basis.

               Accordingly, we reverse the order denying the motion to compel appraisal

and abate litigation and remand for the entry of an order compelling arbitration and

abating the litigation.

               Reversed and remanded with directions.


SILBERMAN and KELLY, JJ., Concur.




                                            -6-
