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


                                             IN THE DISTRICT COURT OF APPEAL
                                             OF FLORIDA
                                             SECOND DISTRICT



CITIZENS PROPERTY INSURANCE                  )
CORPORATION,                                 )
                                             )
              Appellant,                     )
                                             )
v.                                           )         Case No. 2D14-939
                                             )
DANIEL BLAHA and CLYNDON                     )
BLAHA,                                       )
                                             )
              Appellees.                     )
                                             )

Opinion filed April 8, 2016.

Appeal from the Circuit Court for Pasco
County; Stanley R. Mills, Judge.

Kara Berard Rockenbach of Methe &
Rockenbach, West Palm Beach, for
Appellant.

George A. Vaka and Nancy A. Lauten of
Vaka Law Group, Tampa; and Kenneth
C. Thomas, Jr., and Barbara M.
Hernando of Marshall Thomas, Tampa,
for Appellees.


WALLACE, Judge.

              Citizens Property Insurance Corporation (Citizens) appeals a final

judgment for money damages entered in favor of Daniel Blaha and Clyndon Blaha (the

Blahas) following a jury trial. The parties' dispute concerned the Blahas' claim under
their policy of homeowners insurance with Citizens for damages caused by a sinkhole

under the Blahas' residence. On appeal, Citizens makes multiple arguments. We affirm

in part and reverse in part.

                I. THE FACTUAL AND PROCEDURAL BACKGROUND

              The Blahas entered into a contract for homeowners insurance with

Citizens for the period of August 25, 2010, to August 25, 2011. The policy provided the

Blahas with sinkhole coverage by endorsement. The endorsement provided for the

repair of and payment of the cost of repair to the Blahas' home in pertinent part as

follows:

              SECTION I – PERILS INSURED AGAINST

                     ....

              Sinkhole Loss

              1.     We insure for direct physical loss to property covered
                     under Section I caused by the peril of "sinkhole loss,"
                     including the costs incurred to:

                     a. Stabilize the land and building; and

                     b. Repair the foundation;

                     In accordance with the recommendations of the
                     professional engineer who verifies the presence of a
                     "sinkhole loss" in compliance with Florida sinkhole
                     testing standards and in consultation with you.

                     The professional engineer must be selected or
                     approved by us.

                     ....

              SECTION I – CONDITIONS

                     ....




                                           -2-
              (5) In event of "sinkhole loss":

                     ....

                     (b) We will pay no more than the actual cash value of
                     the damaged property; not including underpinning or
                     grouting or any other repair technique performed
                     below the existing foundation of the building, until you
                     enter into a contract for the performance of building
                     stabilization or foundation repairs.

                     (c) Once you enter into such contract, we will pay the
                     amounts necessary to begin and perform such repairs
                     as the work is performed and as the expenses are
                     incurred.

              On March 8, 2011, the Blahas reported to Citizens that there were

damages to their home, including cracks in the floors, walls, and ceilings. Citizens hired

Andreyev Engineering, Inc. (AEI) to evaluate the damage. On May 2, 2011, AEI issued

a report stating that sinkhole activity could not be ruled out as a cause of some of the

damage to the Blahas' home. AEI recommended stabilizing the home through

compaction grouting at forty-two injection points with an estimated 200 to 300 cubic

yards of cement grout and 1890 lineal feet of pipe.1 However in its report, AEI

acknowledged that the grout "estimate is very approximate and may vary considerably

depending on the actual subsurface conditions encountered." In addition, Raymond

Jones, the engineer who prepared the report for AEI, testified that the estimate of 1890

lineal feet of pipe would vary because the depth to which they would need to fill with

grout ranged from thirty to fifty feet. AEI's estimated cost for compaction grouting was

$77,880. Citizens' field adjuster prepared an estimate for above-ground or cosmetic


              1The   contractor performs compaction grouting by drilling into the ground at
different injection points and inserting pipe or steel casing, which is used to transfer
grout into the ground underneath the house.



                                            -3-
repairs to the Blahas' home in the amount of $23,158.13, and Citizens tendered a check

to the Blahas for $20,658.13, the amount of the cosmetic repair estimate less their

$2500 sinkhole deductible.

              The Blahas decided to obtain a peer review of AEI's report and

recommendations from Bay Area Sinkhole & Civil Engineering (B.A.S.I.C.). On October

7, 2011, B.A.S.I.C. issued its report based upon AEI's geotechnical engineering study

and field work performed by B.A.S.I.C. In accordance with the testing performed by

AEI, B.A.S.I.C. agreed that the Blahas' home was being adversely impacted by sinkhole

activity. B.A.S.I.C. also recommended subsurface compaction grouting at forty-two

injection points with an estimated 300 to 350 cubic yards of grout and 1260 to 2100

lineal feet of pipe. Similar to AEI, B.A.S.I.C. noted that the recommended quantity of

grout was "an estimate and [that] a more accurate quantity may be determined after the

completion of grouting 2 or 3 grout points." B.A.S.I.C. further recommended shallow

chemical grouting "to densify and stabilize the very loose to medium dense shallow

soils, encountered in the SPT test borings by AEI, and to complement the compaction

grouting program around the exterior of the home." It recommended the use of

approximately fifty pounds of chemical grout at each of sixty-one injection points. It

estimated the cost of the compaction and chemical grouting to be from $127,570 to

$150,350. The Blahas obtained a cosmetic repair estimate from Triad Consulting

Group in the amount of $45,149.91.2



              2Dennis James, the owner of Triad, testified at trial and explained the
differences between Citizen's cosmetic repair estimate and the one that Triad prepared.
Neither estimate included the cost to repair additional damage that was anticipated to
result from the subsurface repairs, although Triad included the cost to repair the lanai
and driveway where the contractor was expected to drill in accordance with AEI's report.


                                           -4-
              Thereafter, the Blahas obtained and executed a grout installation proposal

prepared by Champion Foundation Repair Systems based upon the report provided by

B.A.S.I.C. The Champion proposal only included performance of compaction grouting

and not chemical grouting because the Blahas wanted to enter into a contract that was

in line with AEI's proposed repair. Champion estimated the cost for compaction

grouting at the forty-two injection points located by B.A.S.I.C. with a projected 300 to

350 cubic yards of grout and 1260 to 2100 lineal feet of pipe to be from $79,280 to

$103,000. On November 21, 2011, the Blahas presented Citizens with a signed

contract from Champion, subject to the insurance carrier's approval, to commence the

repair protocols set forth in B.A.S.I.C.'s report. Champion's bid expired after thirty days.

The Blahas requested Citizens to execute the contract and to issue payment for the

initial draw set forth in Champion's payment schedule. In addition, they requested

Citizens to authorize the additional chemical grouting recommended by B.A.S.I.C.

              Citizens did not approve the Champion contract or authorize chemical

grouting at that time. In fact, Mr. Blaha testified that Citizens simply never responded to

their request for approval of the Champion contract. According to the testimony of

Citizens' stabilization adjuster at trial, the reason that Citizens did not approve the

Champion contract was because the proposed amounts of grout and pipe did not

exactly match AEI's recommendations. The adjuster acknowledged that AEI's estimate

of 1890 lineal feet of pipe fell within the range of 1260 to 2100 lineal feet of pipe set out

in the Champion contract. However, it did not "match the engineer's record." Similarly,


In addition, Mr. James identified at trial new damages that had occurred since Triad
issued its report in 2011. He estimated the cost to repair the new damage to be from
$10,000 to $14,000.



                                             -5-
the 300 to 350 cubic yards of grout did "not fall in line with what [AEI] was

recommending" even though under AEI's report the "quantities [of grout could] vary,

depending on what the ground is going to take." On December 29, 2011, the Blahas

filed a complaint for breach of contract against Citizens. The Blahas alleged that

Citizens' "refusal to authorize and approve the contract executed by [them] constitute[d]

a breach of the policy."

              While suit was pending, Citizens invoked the neutral evaluation procedure

under section 627.7074, Florida Statutes (2012), and litigation was stayed pending

neutral evaluation. On April 30, 2013, the neutral evaluator, Pinnacle Engineering and

Consulting, issued its report. Pinnacle agreed that sinkhole conditions may exist under

the Blahas' home and may be affecting the residence. It also agreed with the use of

compaction grouting at forty-two injection points using an estimated 250 to 300 cubic

yards of grout. In addition, Pinnacle found that subsurface testing indicated the

presence of loose to very loose shallow soil strength that may have developed as a

result of the sinkhole activity and "may contribute to minor settlement-related distress

after the completion of the compaction grout injection program." Accordingly, Pinnacle

recommended shallow chemical grout injection to redensify the shallow soils. Pinnacle

recommended the use of twenty-five pounds of chemical grout at fifty-one injection

sites. Pinnacle projected the cost of compaction and chemical grouting would be from

$101,000 to $118,000. Pinnacle selected W.A. Neumann Construction LLC to prepare

a neutral estimate for the cost of the above-ground repairs, which Neumann

Construction projected would be $24,519.34.




                                            -6-
              On May 13, 2013, Citizens advised the Blahas that it would comply with

the recommendations of the neutral evaluator, including paying "to stabilize the land and

building and repair the foundation in accordance with the reported recommendations of"

AEI and the neutral evaluator at a cost of $101,000 to $118,000. Citizens advised the

Blahas that they could "select any licensed contractor to perform the stabilization and

repairs" and that Citizens would "make payments in accordance with the policy once

[the Blahas] have entered into a contract for the building stabilization and foundation

repair in accordance with the recommendations of" AEI and the neutral evaluator. The

estimate for cosmetic repairs was still under review. The Blahas did not accept Citizens'

offer and asked the trial court to permit them to continue with the litigation.

              The trial court held a jury trial between September 23 and 25, 2013. The

jury was asked to determine whether "Citizens breached the policy of insurance by

failing to authorize and pay for the original contract for building stabilization and

foundation repairs submitted by the [Blahas]" (the Champion contract) and whether

"Citizens breached the policy of insurance by failing to initially authorize necessary,

shallow chemical grouting repairs to the Plaintiff's property."

              At the conclusion of the Blahas' case, Citizens moved for a directed

verdict, arguing that as a matter of law, the Champion proposal submitted to Citizens by

the Blahas was not in accordance with the recommendations of AEI and did not trigger

Citizens' obligation to pay for subsurface repairs. The trial court denied the motion,

agreeing with the Blahas' argument that they were only required to show substantial

compliance with the policy requirement that they enter into a repair contract to trigger




                                             -7-
Citizens' duty to pay. It found that a factual issue existed as to whether Champion's

proposal substantially complied with AEI's recommendations.

              The trial court also found that the Blahas were entitled to seek money

damages against Citizens if they established that Citizens had breached the policy. The

jury was asked to determine (in the event it found a breach) the total amount of money

that would fairly compensate the Blahas for compaction grouting, chemical grouting,

and above-ground repairs. The jury returned a verdict finding that Citizens had

breached the insurance policy by failing to authorize and pay for the Champion contract

but not by failing to initially authorize chemical grouting. The jury found that the Blahas

would be fairly compensated for the repairs in the following amounts: $105,000 for

compaction grouting; $25,000 for chemical grouting; and $65,000 for cosmetic repairs.

              After denying Citizens' renewed motion for directed verdict and motion for

new trial, the trial court entered a final judgment in favor of the Blahas for $217,186.79.

The award included the total amount of damages reflected by the verdict, $195,000,

plus $22,186.79 in prejudgment interest calculated from the date Citizens

acknowledged receipt of the Blahas' claim through the date of the jury's verdict.

Citizens thereafter initiated the subject appeal.

                                     II. DISCUSSION

A. The Motion for Directed Verdict

              On appeal, Citizens raises three points. First, Citizens contends that the

trial court erred in denying its motion for directed verdict because Citizens fully complied

with its policy and the sinkhole statute. We disagree. The record shows that the parties

had a bona fide dispute about the method and means necessary to perform the




                                            -8-
subsurface repairs. The trial court properly submitted that dispute to the jury for

determination. We find no error in the trial court's refusal to grant Citizens' motion for

directed verdict. Cf. Sanchez v. Royal Palm Ins. Co., 166 So. 3d 212, 213 (Fla. 2d DCA

2015) (reversing in part a final judgment in favor of the insurer); Roker v. Tower Hill

Preferred Ins. Co., 164 So. 3d 690, 694 (Fla. 2d DCA 2015) (same).

B. The Necessity of a Contract for the Subsurface Repairs

              Second, Citizens contends that the trial court erred in entering a money

judgment in favor of the Blahas for the full amount of the subsurface repairs without first

requiring them to enter into a contract for those repairs. The Blahas respond that

"[o]nce Citizens breached the insurance policy, the Blahas' further obligations under the

policy were discharged." According to the Blahas, Citizens cannot now rely on the

provisions of the insurance contract to withhold payment until the Blahas enter into a

contract for the subsurface repairs.

              We reject the Blahas' argument on this point. Notwithstanding any breach

by Citizens, the provisions regarding withholding payment for the subsurface repairs

remained in effect, much the same as the provisions for deductibles and policy limits.

Under the provisions of the contract, Citizens is not obligated to pay anything for

subsurface repair until the Blahas "enter into a contract for performance of building

stabilization or foundation repairs." Once the Blahas enter into such a contract,

Citizens' contractual obligation is to "pay the amounts necessary to begin and perform

such repairs as the work is performed and as the expenses are incurred." Citizens'

earlier refusal to pay did not change the scope of the coverage that it contracted to

provide. See Gordon v. 21st Century Ins. Co., Nos. B160115, B163835, 2004 WL




                                            -9-
1682130, at *7 (Cal. Ct. App. July 28, 2004) ("A claim denial can excuse an insured[']s

obligation to perform an act required by the policy, but it does not expand the scope of

coverage." (footnote omitted)); see also Six L's Packing Co. v. Fla. Farm Bureau Mut.

Ins. Co., 268 So. 2d 560, 563 (Fla. 4th DCA 1972) ("The general rule is well established

that the doctrine of waiver and estoppel based upon the conduct or action of the insurer

(or his agent) is not applicable to matters of coverage as distinguished from grounds for

forfeiture."). For this reason, the trial court erred in entering a money judgment that did

not authorize Citizens to withhold payment for the subsurface repairs until the Blahas

enter into a contract for those repairs.3 See Tower Hill Select Ins. Co. v. McKee, 151

So. 3d 2, 4 (Fla. 2d DCA 2014); State Farm Fla. Ins. Co. v. Phillips, 134 So. 3d 505, 508

(Fla. 5th DCA 2014).

C. Prejudgment Interest

              Third, Citizens argues in the alternative that the trial court erred in

awarding the Blahas prejudgment interest from the date of their claim rather than from

the date the proceeds would have been due under the policy. Because no payment is

due until the Blahas enter into a contract for the subsurface repair, they were not

entitled to an award of prejudgment interest on the amounts that the jury awarded for

compaction grouting and for chemical grouting. See McKee, 151 So. 3d at 4; see also

Citizens Prop. Ins. Corp. v. Alvarez, 40 Fla. L. Weekly D2428, D2429 (Fla. 2d DCA Oct.

30, 2015) (holding that the insureds were not entitled to an award of prejudgment




              3This
                  court recently reached a similar result in Citizens Prop. Ins. Corp. v.
Amat, 41 Fla. L. Weekly D448, D450 (Fla. 2d DCA Feb. 19, 2016).



                                            - 10 -
interest where "[t]here was [a] dispute as to the cost of the repair, and the jury resolved

that dispute and liquidated the claim as of the date of the verdict").

              We also conclude that the trial court erred in awarding the Blahas

prejudgment interest on the cosmetic damage award. The record reflects that when the

Blahas filed suit, the only credible estimate that Citizen's had for the cosmetic damage

to the Blahas' home was the $23,158.13 estimate prepared by its adjuster, which

Citizens tendered to the Blahas on July 28, 2011, less their deductible in the amount of

$2500.4 Moreover, the jury was not asked to determine whether Citizens breached its

policy by failing to tender any additional amount for cosmetic damages based upon its

receipt of the estimate prepared by Triad or by the neutral evaluator after suit was filed.

"Nothing in the record . . . supports a theory that the jury was determining [the] cost [for

cosmetic damages] for a date other than the date of the verdict." Alvarez, 40 Fla. L.

Weekly at D2429. Accordingly, the Blahas were not entitled to an award of prejudgment

interest on the cosmetic damage award.

                                    III. CONCLUSION

              For the foregoing reasons, we reverse the final judgment to the extent that

it awarded money damages payable to the Blahas without recognizing Citizens' right to

withhold payment for the cost of the subsurface repairs until the Blahas enter into a

contract for those repairs. We also reverse the award of prejudgment interest. In all

other respects, the final judgment is affirmed. On remand, the trial court shall enter an




              4The final judgment states that the Blahas "have returned the original stale
cosmetic check in the amount of $20,658.13 to [Citizens]."



                                           - 11 -
amended final judgment in accordance with this opinion and the provisions of the

sinkhole endorsement to the policy.

             Affirmed in part, reversed in part, and remanded.



KELLY and SALARIO, JJ., Concur.




                                         - 12 -
