WESTCHESTER SURPLUS LINES INSURANCE COMPANY v. PORTOFINO MASTER HOMEOWNERS ASSOCIATION INC

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF FLORIDA

PENSACOLA DIVISION

WESTCHESTER SURPLUS LINES

INSURANCE COMPANY, et al.,

Plaintiffs,

v. CASE NO. 3:23cv00453-MCR-HTC

PORTOFINO MASTER

HOMEOWNERS ASSOCIATION,

INC, et al.,

Defendants.

_________________________________/

ORDER

This action arises from Hurricane Sally, which slammed into the Gulf Coast

on September 16, 2020. At the center of this dispute is a $187 million insurance

appraisal award ostensibly reflecting the storm damage sustained by a collection of

Pensacola Beach condominiums, colloquially known as the Portofino Towers.

Plaintiffs, thirteen commercial property insurers (collectively, the “Insurers”),1

broadly request that the Court either declare the award invalid and unenforceable

1 The Plaintiffs are Arch Specialty Insurance Company (“Arch”), Aspen Specialty

Insurance Company (“Aspen”), AXIS Surplus Insurance Company (“AXIS”), Colony Insurance

Company (“Colony”), Evanston Insurance Company (“Evanston”), Homeland Insurance

Company of New York (“Homeland”), Independent Specialty Insurance Company

(“Independent”), Interstate Fire & Casualty Company (“Interstate”), James River Insurance

Company (“James River”), Lloyd’s of London (Consortium #9226) (“Lloyd’s”), Landmark

American Insurance Company (“Landmark”), Maxum Indemnity Company (“Maxum”), and

Westchester Surplus Lines Insurance Company (“Westchester”).

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under the terms of their respective polices, see 28 U.S.C. §§ 2201, 2202, or vacate

the award under Florida’s Arbitration Code, Fla. Stat. § 682.13. Defendants, the

homeowners’ associations holding the insurance policies (collectively,

“Portofino”),2 fiercely defend the award and bring counterclaims against the Insurers

for breach of contract based on the Insurers’ refusal to abide by it. This has

culminated in twenty-two motions presently before the Court, accompanied by

hundreds of pages of briefing and thousands of pages of exhibits,3 and a two-day

evidentiary hearing on a motion to vacate the appraisal award, where the Court heard

hours of witness testimony and attorney argument. Ultimately, the Court concludes

that the appraisal award cannot stand because it is undisputed that Portofino’s

appointed appraiser, George Keys, did not fulfill his raison d’être: he never stated

2 Defendants named in this action are Portofino Tower One Homeowners Association at

Pensacola Beach, Inc., Portofino Tower Two Homeowners Association at Pensacola Beach, Inc.,

Portofino Tower Three Homeowners Association at Pensacola Beach, Inc., Portofino Tower Four

Homeowners Association at Pensacola Beach, Inc., Portofino Tower Five Homeowners

Association at Pensacola Beach, Inc., and Portofino Master Homeowners Association at Pensacola

Beach, Inc.

3 Specifically, the Insurers filed numerous motions for summary judgment on a variety of

issues, ECF Nos. 236, 241, 245, 248, 251, 266; several Daubert motions, ECF Nos. 238, 239, 240;

a renewed motion to vacate pursuant to Fla. Stat. § 682.13, ECF No. 257; and certain Insurers filed

individual notices of joinder to some of those motions, ECF Nos. 258, 259, 260, 263, 264.

Likewise, Portofino filed its own motions for summary judgment, ECF Nos. 246, 250, 255, 261,

262, 265; Daubert motions, ECF No. 232, 252, 253, 254, 256; and, most recently, a motion to

strike certain testimony offered at the evidentiary hearing on the renewed motion to vacate, ECF

No. 347. The Court has given careful and due consideration to each motion.

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the “amount of loss” to Portofino’s property caused by Hurricane Sally as required

by the applicable insurance policy provisions.4 The Court will therefore grant the

Insurers’ motion for summary judgment on this score, the appraisal award will be

declared invalid under the terms of the policies, and the parties will be ordered to

conduct a new appraisal before a new panel. See ECF Nos. 251, 260, 263.5

I. Background6

When Hurricane Sally made landfall, Portofino insured its five condominium

towers and other neighboring structures through the Insurers and other non-parties.

See generally ECF No. 222; see also ECF No. 104-1.7 After the storm subsided,

Portofino submitted a claim for the damage to its insured properties, and the parties

4 In the long run, this may be a pyrrhic victory for the Insurers, as they acknowledge that

Portofino’s claim for the damage caused by Hurricane Sally will survive notwithstanding the

Court’s decision, but it is the result the law compels, nonetheless. See ECF No. 352.

5 As discussed in more detail below, the Court alternatively grounds its decision in Fla.

Stat. § 682.13(1)(b)(3) and vacates the award.

6 Given the length and complexity of the factual and procedural history, and because the

Court writes primarily for the parties, the background provided here is abbreviated to cover only

those facts necessary to resolve the issue at hand and any obligatory context. The below facts are

undisputed and viewed in the light most favorable to the nonmovants, Portofino.

7 The non-parties are three other insurers, Princeton Excess Surplus Lines Insurance

Company, Endurance American Specialty Insurance Company, and Everest Indemnity Insurance

Company, who were originally parties to this action, but dismissed their claims without prejudice

pursuant to Rule 41 of the Federal Rules of Civil Procedure. See ECF Nos. 84, 85, 86. Recently,

Evanston and Portofino notified the Court of a “settlement of all claims by and between” them.

See ECF No. 366. To date, however, neither party has moved for or stipulated to a dismissal of

their claims.

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proceeded to appraisal in accordance with the policies when they were unable to

agree as to the “amount of loss” caused by Sally. See ECF No. 246-4; ECF No. 246-

5; ECF No. 251-4.8 Subject to a few exceptions, which are not material for present

purposes, the operative appraisal provisions state:

APPRAISAL - If the Insured and this Company fail to agree on the

amount of loss, each, upon the written demand either of the Insured or

of this Company made within 60 days after receipt of proof of loss by

the Company, shall select a competent and disinterested appraiser. The

appraisers shall then select a competent and disinterested umpire. If

they should fail for 15 days to agree upon such umpire, then upon the

request of the Insured or of this Company, such umpire shall be selected

by a judge of a court of record in the county and state in which such

appraisal is pending. Then, at a reasonable time and place, the

appraisers shall appraise the loss, stating separately the value at the

time of loss and the amount of loss. If the appraisers fail to agree, they

shall submit their differences to the umpire. An award in writing by

any two shall determine the amount of loss. The Insured and this

Company shall each pay his or its chosen appraiser and shall bear

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

See ECF No. 104-1 at 33 (emphasis added).9 Each side appointed an appraiser who

they believed to be “competent and disinterested.” The Insurers appointed Patrick

8 A number of the pending motions address “notice” and “participation” issues with respect

to the appraisal process. See, e.g., ECF Nos. 248, 251, 255. Today’s decision does not reach those

arguments.

9 The applicable Landmark, Homeland, and Evanston policies each contain diverging

appraisal clauses. Those differences are not material for the matter at hand, however, because

these policies still require the appraisers appointed by the parties to “state separately the value of

the property and amount of loss,” and, if they are unable to agree, submit their differences to a

mutually selected umpire. See ECF No. 104-1 at 265–66 (Evanston), 578 (Landmark), 594

(Homeland).

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Lewis as their appraiser, see ECF 251-9 at 4, and Portofino ultimately selected

George Keys to serve as its appraiser, see ECF No. 262-5.

The appraisal provisions demanded fairly little of the two appraisers. Their

delegated responsibilities fell into four discrete categories, which track the phases of

the appraisal process outlined by the policy language:

Umpire Appointment. The appraisers were required, if possible, to jointly

designate a “competent and disinterested umpire.”10

Separate Appraisal of Loss. Then, the appraisers were to earn their namesake

and “appraise the loss.” To do so, each appraiser was required to state the value of

Portofino’s insured property “at the time of the loss” as well as the “amount of loss”

to Portofino’s property caused by Hurricane Sally.

Agreement or Submission of Differences. Next, the appraisers were tasked

with conferring as to whether they could agree as to the “amount of loss.” If unable

to agree, the appraisers were instructed to “submit” their dispute to the umpire, who

would be tasked with breaking the deadlock.

Award. Finally, if the two appraisers were able to agree as to the “amount of

loss,” then they would issue an award in writing. Otherwise, one appraiser would

10 Keys and Lewis agreed to select Jon Doan as the umpire. See ECF No. 246-17.

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join the umpire in doing the same. Regardless of the combination, an award in

writing by any two panel members would “determine the amount of loss ” to

Portofino’s property caused by Hurricane Sally.11

Lewis appraised the loss attributable to Hurricane Sally at approximately $18

million. See ECF No. 247-1 at 210:24. Though Portofino preliminarily claimed

around $13 million in damages, Keys ultimately submitted a document entitled

“Statement of Loss” in the amount of $233 million. See ECF No. 230-9; see also

ECF No. 251-11 at 3–4. That document, by Keys’ own admission, did not reflect

“the amount of money required to repair the damages associated with Hurricane

Sally.” See ECF No. 225-1 at 341:2–21. According to Keys and his team, it was

instead a “starting point,” id. at 342:1–2, which largely provided the umpire with a

“price list” that he could use when fashioning the ultimate appraisal award, see ECF

No. 230-1 at 123:12. Keys’ appraisal team ultimately deferred to the umpire to

determine the extent of damages produced by the storm—and therefore the “amount

of loss” to Portofino’s property. Id. at 58:11–14 (“A. [W]hat we were tasked with

[was] producing à la carte pricing so that later on once the scope was determined and

awarded by the umpire, he had the pricing in front of him . . . .” (citation modified)).

11 Less likely still, the appraisal panel could reach impasse and no award would issue.

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Indeed, Portofino admits in its summary judgment briefing that Keys’ appraisal team

never “computed a final number” reflecting the “amount of loss” to Portofino’s

property caused by Hurricane Sally. See ECF No. 301 at 5–6 (citation modified).

The appraisal panel met for a two-week hearing in August 2022. See ECF

No. 225-1 at 47:4–18. After the hearing, the umpire scheduled another meeting in

early October 2022 with Lance McCallister, the expert Keys tasked with pricing the

repair work, and Kevin Bryant, the expert Lewis charged with doing the same. See

ECF No. 246-3 at ¶ 9. The umpire requested during that meeting for each side to

submit “information regarding pricing sources” for verification as well as

“competing cost estimates” to repair each tower individually. See id. The appraisal

panel met for closing statements in late November 2022. See ECF No. 225-1 at

57:11–19. On a rolling basis between February and July 2023, the $187 million

appraisal award issued in seven parts. Compare ECF No. 104 at ¶¶ 140–149 with

ECF No. 108 at 40–41, ¶¶ 140–149.12 The umpire and Keys signed each portion of

12 The Insurers filed the instant declaratory judgment action before any portion of the award

was announced. See ECF No. 1. After the first part of the award issued, the Insurers filed an

emergency motion requesting the Court to stay the appraisal during the pendency of this lawsuit.

See ECF No. 57. The Court denied that emergency relief, permitting the appraisal process to play

out. See ECF No. 78. Then, following the issuance of the last part of the appraisal award, the

Insurers filed a motion to vacate the award pursuant to Fla. Stat. § 682.13. See ECF Nos. 116,

117, 118, 119. The parties jointly requested to stay resolution of the motion to vacate pending the

completion of discovery. See ECF No. 136. The Court recognized the “good sense” in granting

the requested stay, but for docket management reasons, denied the motion to vacate without

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the award; Lewis refused to sign all but one. See ECF No. 257-24.13

The Insurers’ operative pleading (and subsequent motions for summary

judgment) attack the appraisal award from nearly every angle, alleging, among other

things, that the award was procured by fraud, issued without the requisite notice and

participation, and otherwise produced by a process that did not comply with the

appraisal provisions in the policies, including because Portofino’s chosen appraiser,

Keys, was not “disinterested” in the appraisal’s outcome. See ECF No. 104. The

Insurers primarily request a declaratory judgment that they “do not have any

obligation to pay the appraisal award because Portofino failed to comply with the

appraisal provision.” Id. at ¶ 152 (citation modified). The Insurers’ motion to vacate

sings a similar tune. See ECF Nos. 257, 258, 259, 264. That motion argues, under

Fla. Stat. § 682.13, that the appraisal award must be vacated because it was procured

by “corruption, fraud, or undue means,” Keys committed “misconduct” throughout

the appraisal that prejudiced the Insurers’ rights, and the umpire erred by failing to

prejudice and with leave to renew the motion after the close of discovery. See ECF No. 141. The

renewed motion to vacate was filed in compliance with the Court’s earlier instruction. See ECF

Nos. 257, 258, 259, 264.

13 Lewis signed the portion of the appraisal award covering costs that Portofino had already

incurred repairing its property after Hurricane Sally. ECF No. 257-24 at 2–3; see also ECF No.

247-1 at 15:17–16:1.

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postpone the appraisal hearings after Keys orchestrated a “last-minute document

dump.” See ECF No. 351.14

As previewed, the discussion that follows is limited to the Insurers’ argument

that they are entitled to summary judgment because Keys’ failure to state the

“amount of loss” renders the appraisal award invalid under the policies, see ECF

Nos. 251, 260, 263, and, alternatively, that this failure amounted to “misconduct”

such that the award must be vacated under Fla. Stat. § 682.13(1)(b)(3). The Court

need not, and therefore does not, address the multitude of other issues raised by the

pending motions.

II. Legal Standard

Summary judgment is appropriate where the record reflects that there are no

genuine disputes of material fact and the moving party is entitled to judgment as a

matter of law. See Fed. R. Civ. P. 56; see also Celotex Corp. v. Catrett, 477 U.S.

317, 322–23 (1986). A fact is “material” if, under the applicable substantive law, it

might affect the outcome of the case. Hickson Corp. v. N. Crossarm Co., 357 F.3d

1256, 1259 (11th Cir. 2004). A dispute of fact is “genuine” if “the evidence is such

14 The Court held a two-day evidentiary hearing on the renewed motion to vacate, see ECF

Nos. 345, 346, and ordered additional briefing on the interplay between the Insurers’ statutory and

contractual arguments, ECF No. 336. See ECF Nos. 352, 359.

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that a reasonable jury could return a verdict for the nonmoving party.” Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

The moving party bears the initial burden of “informing the court of the basis

for its motion and of identifying those materials that demonstrate the absence of a

genuine issue of material fact.” Rice-Lamar v. City of Fort Lauderdale, 232 F.3d

836, 840 (11th Cir. 2000) (citing Celotex, 477 U.S. at 323). Once that burden is met,

the nonmoving party must “go beyond the pleadings” and present competent record

evidence showing the existence of a genuine, material factual dispute for trial.

Celotex, 477 U.S. at 324. The nonmoving party “must do more than simply show

that there is some metaphysical doubt as to the material facts.” Matsushita Elec.

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The evidence and

factual inferences drawn therefrom are viewed in the light most favorable to the non-

moving party. See Liberty Lobby, 477 U.S. at 255.

III. Discussion

A federal court sitting in diversity applies the substantive law of the forum

state. See Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). The parties agree that

Florida law applies to the present dispute. The Court is accordingly required to

decide this matter “as would the Florida Supreme Court,” and is bound by the

decisions of “Florida’s District Courts of Appeal absent some indication that the

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Florida Supreme Court would hold otherwise.” ECB USA, Inc. v. Savencia Cheese

USA, LLC, 148 F.4th 1332, 1340 (11th Cir. 2025) (internal marks and citations

omitted).

“Under Florida law, insurance contracts are construed according to their plain

meaning.” Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So.2d 528, 532 (Fla.

2005). Where “a policy provision is clear and unambiguous, it should be enforced

according to its terms whether it is a basic policy provision or an exclusionary

provision.” Id. (internal marks and citations omitted). “Courts may not rewrite

contracts, add meaning that is not present, or otherwise reach results contrary to the

intentions of the parties.” Id. (citation modified); see also Gulf Tampa Drydock Co.

v. Great Atl. Ins. Co., 757 F.2d 1172, 1174 (11th Cir. 1985) (interpretation of an

insurance contract is a question of law to be decided by courts).

“Appraisals are creatures of contract and the subject or scope of appraisal

depends on the contract provision.” Fla. Ins. Guar. Ass’n v. Branco, 148 So.3d 488,

491 (Fla. 5th DCA 2014). In Florida, appraisals are designed “for a limited

purpose—the determination of ‘the amount of the loss.’” Positano Place at Naples

I Condo. Ass’n, Inc. v. Empire Indem. Ins. Co., 84 F.4th 1241, 1248 (11th Cir. 2023)

(quoting Citizens Prop. Ins. v. Mango Hill #6 Condo. Ass’n, 117 So.3d 1226, 1230

(Fla. 3d DCA 2013)); see also Am. Coastal Ins. Co. v. San Marco Villas Condo.

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Ass’n, Inc., 379 So.3d 1099, 1102 (Fla. 2024) (portraying appraisal as “an informal

out-of-court dispute resolution process . . . . where there is a disagreement as to the

‘amount of loss’”); State Farm Fla. Ins. Co. v. Crispin, 290 So.3d 150, 151 (Fla. 5th

DCA 2020) (describing appraisal as “an insurance contract’s alternative dispute

resolution process” for a “disputed amount of loss”). “All issues other than those

contractually assigned to the appraisal panel are reserved for determination in a

plenary action.” Positano Place, 84 F.4th at 1248 (citation modified); see also San

Marco Villas, 379 So.3d at 1104 (“All other disputes—including those involving

coverage or legal matters—are beyond the scope of appraisal and must be decided

in court.”). Simply put, “while an agreement to arbitrate ordinarily encompasses the

disposition of the entire controversy between the parties, an agreement for appraisal

extends merely to the resolution of the . . . ‘amount of loss.’” Mango Hill, 117 So.3d

at 1229 (citation modified).

For that reason, “appraisal is—by its nature—a different process than

arbitration.” NCI, LLC v. Progressive Select Ins. Co., 350 So.3d 801, 807 (Fla. 5th

DCA 2022). The Florida Supreme Court describes appraisal as “informal,” and

distinct from the “quasi-judicial” nature of arbitration. See Allstate Ins. v. Suarez,

833 So.2d 762, 764–65 (Fla. 2002). But although appraisals lack the same

procedural safeguards as arbitration, it isn’t a free-for-all: “Once a party to an

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insurance contract properly invokes appraisal, the parties should conduct those

proceedings in accord with the agreed-on policy provisions.” NCI, 350 So.3d at 808.

To downright tedium, state and federal courts in Florida have repeatedly

stated that mere errors of fact or law by an appraiser are not enough to set aside an

appraisal award. See, e.g., Biscayne Beach Club Condo. Ass’n, Inc. v. Westchester

Surplus Lines Ins. Co., 2022 WL 18776152, at *7 (S.D. Fla. Mar. 1, 2022), aff’d,

111 F.4th 1182 (11th Cir. 2024); Karsel Holdings, L.L.C. v. Scottsdale Ins. Co., 2023

WL 2087935, at *6 (S.D. Fla. Jan. 18, 2023), appeal dismissed sub nom. Karsel

Holdings, LLC v. Scottsdale Ins. Co., 2023 WL 4058290 (11th Cir. May 2, 2023);

A.L. Gary & Assocs., Inc. v. Travelers Indem. Co. of Conn., 2008 WL 11333729, at

*7 (S.D. Fla. Aug. 27, 2008). For appraisal to be a meaningful alternative to

litigation on “amount of loss” issues, interests in finality weigh heavily in favor of

letting sleeping dogs lie. See State Farm Fire & Cas. Co. v. Middleton, 648 So.2d

1200, 1201–02 (Fla. 3d DCA 1995) (noting that appraisal evokes the “general, even

overwhelming, preference in Florida for the resolution of conflicts through any

extra-judicial means, . . . for which the parties have themselves contracted”).15 So,

15 By the same token, “a post-appraisal submission of increased costs is not a legally

sufficient basis for re-opening the existing appraisal or conducting a new one.” Noa v. Fla. Ins.

Guar. Ass’n, 215 So.3d 141, 142 (Fla. 3d DCA 2017).

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when parties run to the courts following an appraisal and complain that an award is

supernaturally high or riddled with duplicative costs, judges generally react with a

shoulder shrug—after all, this is the process the parties knowingly bargained for,

and appraisers are often better equipped to measure these sorts of damages. See

Citizens Prop. Ins. Corp. v. River Manor Condo. Ass’n, Inc., 125 So.3d 846, 854

(Fla. 4th DCA 2013) (holding that it is “not the trial court’s duty to ascertain whether

the amounts awarded were in fact duplicative,” and “an alleged mistake of that

nature raises an issue directly related to the ‘amount of loss’ sustained to the

particular property—an issue solely within the province of the appraisers” (citation

modified)); First Protective Ins. Co. v. Hess, 81 So.3d 482, 485 (Fla. 1st DCA 2011)

(“After the parties have gone through the appraisal process, the trial court may not

consider evidence beyond the face of the appraisal award.”); see also Karsel

Holdings, 2023 WL 2087935, at *6 (courts cannot “second guess the appraisers” on

the “amount of the loss”).

The present case, though, is different. And it’s different because Portofino’s

appraiser, George Keys, concedes that he never stated the “amount of loss” as

required by the applicable appraisal provisions in the policies. See ECF No. 225-1

at 341:2–7 (“Q. But isn’t it true that you submitted those numbers . . . as the amount

of money required to repair the damages associated with Hurricane Sally? . . . .

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A. Not true.”), 341:18–21 (“Q. [D]idn’t you submit those estimates as the cost of

repairs to put the property back in its pre-Sally condition? A. No, sir.”).16 Keys

testified that the $233 million presented as the “statement of loss” incurred by

Portofino’s property due to Hurricane Sally was instead just a “starting point,” and

was not reflective of the “real world” money needed to restore the property. Id. at

334:4–342:20. The reason, according to Keys, was the estimate prepared by his

pricing expert, Larry McCallister. Id. at 35:15–16. About $217 million, or

approximately 93% of the total “statement of loss” submitted by Keys, was

attributable to the pricing estimate prepared by McCallister. See ECF No. 230-9.

But what McCallister provided, in his words, was a “price list,” ECF No. 230-1 at

123:12, that was not reflective of any “market price” to restore Portofino’s property.

See id. at 43:8–16 (“Q. Would anyone pay $217 million to do the work proposed in

these estimates? A. I don’t think that anyone would select that methodology. There

16 Counsel for Portofino objected to the form of these questions posed to Keys. See ECF

No. 225-1 at 341:6, 341:22–23. Portofino has not argued in its subsequent briefing that Keys’

testimony is inadmissible, however. Cf. Henderson v. B & B Precast & Pipe, LLC, 2014 WL

4063673, at *1 (M.D. Ga. Aug. 14, 2014) (“Simply stating ‘objection to form’ does not necessarily

preserve the objection. When ‘objection to form’ does not indicate what is wrong with the form so

that the questioner can correct the problem, it becomes nothing more than a statement that the

objector finds the question ‘objectionable.’”). To the extent those objections are still live, they are

overruled. Even so, the Court may consider inadmissible evidence at this stage if it may be

presented in an admissible form at trial. See Celotex Corp., 477 U.S. at 324. That bar is likewise

cleared.

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are cheaper ways to do it.”).17 Oddly enough, the best analogy for Portofino’s

appraisal team’s submission is food. According to McCallister, he merely supplied

“à la carte pricing” for the project. Id. at 65:11–12 (citation modified). He testified

that no “thinking person” would use his “price list” as a stand in for the total dollar

value of the damage caused by Hurricane Sally for the same reason that “most people

wouldn’t eat all the food” on “a menu for an entire restaurant” just because the option

is (at least in theory) available. Id. at 47:18–19, 122:21–23; see also id. at 125:1–3

(“A. [I]f you go to Subway and you look at all their sandwiches, you’re not going to

order all their sandwiches.”).18 The issue, in other words, is that Keys never

17 McCallister testified that he prepared the “price list,” not only for the appraisal process,

but also to potentially secure a role in the future repair work. See ECF No. 230-1 at 108:18–20

(“A. I didn’t solely put this together with the only possible theory of it being used for an insurance

claim. I put this together so that I could get awarded the work.”); see also id. at 110:13–24 (“Q.

[I]t’s your hope that you get awarded the contract as a result of this estimate; correct? A. It’s my

hope that I get awarded a contract.”).

18 McCallister further explained his approach using a hypothetical roof replacement

project. There are two replacement options in McCallister’s hypothetical: “Option A” is a shingle

roof and “Option B” is a metal roof. See ECF No. 230-1 at 104:20–25. Although no homeowner

would ultimately install both a metal and shingle roof, an estimate might include price points for

each alternative for the homeowner to choose from—though, the homeowner will only pay for the

roof they select. By McCallister’s telling, the estimate he prepared for the damage to Portofino,

across the board, included the cost for both the hypothetical metal and shingle roofs, which

naturally resulted in an estimate that is “higher than what the actual cost would be” to make the

repairs. See id. at 112:2–23. No one associated with Portofino’s appointed appraisal team played

the role of the hypothetical homeowner by selecting amongst the alternates provided—so Keys

never supplied a dollars to donuts statement of the “amount of loss” caused by Hurricane Sally.

Keys and McCallister left that to the umpire in contravention of the insurance policies. See id. at

58:11–14.

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established a final scope for the proposed repair work before he submitted the $233

million “statement of loss” for the damage caused by Hurricane Sally—or ever. Cf.

Cincinnati Ins. Co. v. Cannon Ranch Partners, Inc., 162 So.3d 140, 143 (Fla. 2d

DCA 2014) (noting that “the scope of damage to a property . . . necessarily dictates

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

(citation modified)).19 Determining the scope was instead outsourced to the umpire,

meaning that, in Portofino’s words, “Keys’ appraisal team did not compute a final

number” reflecting the “amount of loss” as required by the appraisal provisions. See

19 McCallister testified that he “never had a full scope” and never received one from Keys

or the umpire. See ECF No. 230-1 at 45:4–7, 48:5–16; see also id. at 121:18–23 (“A. At this point,

we did not have a scope, so we just put together pricing.”), 158:21–23 (“Q. Have you ever seen

anything where [the umpire] prepared a scope of what he determined the damages to be? A. No.”).

This is not to say that McCallister had no marching orders whatsoever as to scope. He knew, for

example, that other experts on Portofino’s appointed appraisal team believed that “windows, doors,

and roofs were all damaged by the hurricane and needed to be replaced.” See ECF No. 246-3 at

¶¶ 5–6. However, McCallister’s “price list” did not actually calculate the true cost of replacing all

those things (e.g., the construction work), because he believed that the scope and project duration

were ultimately a question for the umpire. Id. at ¶ 13. Under Florida law, the term “amount of

loss” is understood to encompass more than the cost of a damaged item, such as a broken window;

it also includes the cost of replacing or repairing that item, such as labor, equipment rentals, and

the like. See State Farm Fire & Cas. Co. v. Licea, 685 So.2d 1285, 1288 (Fla. 1996) (“We interpret

the appraisal clause to require an assessment of the amount of a loss. This necessarily includes

determinations as to the cost of repair or replacement . . . .”); Cannon Ranch Partners, 162 So.3d

at 143 (“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.” (citation modified)); River

Manor, 125 So.3d at 854 (“The appraisers determine the amount of the loss, which includes

calculating the cost of repair or replacement of property damaged . . . .”). In a project as large and

complex as this, those costs are in the millions. That, too, is another reason why Portofino and its

appointed appraisal team have been forced to concede that their side never stated the “amount of

loss.”

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ECF No. 301 at 5–6; cf. First Acceptance Ins. Co., Inc. v. At Home Auto Glass, LLC,

365 So.3d 1278, 1281 (Fla. 6th DCA 2023) (interpreting analogous appraisal

provision and observing that it reflects a “need” for the appraiser “to place a

monetary value on the amount of a loss”).

These concessions, quite simply, are the death knells to Portofino’s cause.

Appraisals, under Florida law, are undoubtedly “preferred, as they provide a

mechanism for prompt resolution of claims and discourage the filing of needless

lawsuits.” Fla. Ins. Guar. Ass’n, Inc. v. Olympus Ass’n, Inc., 34 So.3d 791, 794 (Fla.

4th DCA 2010). But appraisals must—and there is no wiggle room here—still be

conducted “in accord with the agreed-on policy provisions.” NCI, 350 So.3d at 808;

see Suarez, 833 So.2d at 765 (holding that while appraisal may be less formal than

arbitration, its proceedings should still be conducted pursuant to the contract

provisions). Here, it is undisputed that Portofino’s appraiser, by failing to state the

“amount of loss,” did not comply with the most basic—and fundamental—aspect of

the process set forth in the appraisal provisions. Cf. Liberty Mut. Fire Ins. Co. v.

Hernandez, 735 So.2d 587, 589 (Fla. 3d DCA 1999) (evaluating similar policy

language and concluding “the clause contemplates . . . valuation by each appraiser

individually, not a trial-type hearing.”). The award produced by this flawed process

is therefore invalid and cannot be enforced against the Insurers. See A.L. Gary &

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Assocs., 2008 WL 11333729, at *8 (concluding that appraisal award “must be

vacated because it was entered in violation of the clear and unambiguous terms of

the Policy”).20

The arguments that Portofino lobs to avoid this result smack of desperation.

Initially, Portofino urges the Court not to indulge in a cumbersome post-mortem of

the appraisal award, because the “amount of loss” is a question exclusively for the

appraisal panel and “the law is clear in that the Court may not substitute its judgment

for that of the panel.” Mont Claire at Pelican Marsh Condo. Ass’n, Inc. v. Empire

Indem. Ins. Co., 2021 WL 3476406, at *6 (M.D. Fla. May 24, 2021), report and

recommendation adopted, 2021 WL 3205694 (M.D. Fla. July 29, 2021) (citation

modified). This is beside the point. Even by Portofino’s telling, the Court’s role is

limited to determining whether the appointed appraisers “did the job they were told

20 This distinguishes the instant case from Three Palms Pointe, Inc. v. State Farm Fire &

Cas. Co., 362 F.3d 1317 (11th Cir. 2004). There, the Eleventh Circuit observed that, under Florida

law, “if an insurer and an insured party go to appraisal, the insurer can only dispute coverage for

the “‘loss as a whole.’” Id. at 1319 (quoting Licea, 685 So.2d at 1288). Thus, “once an award has

been made, the only defenses that remain for the insurer to assert are lack of coverage for the entire

claim, or violation of one of the standard policy conditions (fraud, lack of notice, failure to

cooperate, etc.).” Id.; but see Baptist Coll. of Fla., Inc. v. Church Mut. Ins. Co., SI, 656 F.Supp.3d

1290, 1294 (N.D. Fla. 2023) (noting that “a significant number of Florida’s intermediate appellate

courts have determined that the Eleventh Circuit misinterpreted [Florida law] in Three Palms

Pointe”). In Three Palms Pointe, however, there was no question that the appraisal award was

issued pursuant to the process set forth in the parties’ agreement—a fact that was “central” to the

Eleventh Circuit’s analysis. See 362 F.3d at 1318 (citation modified). The defendant simply

disputed that certain expenses included in the award (namely, relocation costs for residents) were

recoverable under the insurance policy. Id. at 1319.

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to do—not whether they did it well, or correctly, or reasonably, but simply whether

they did it.” ECF No. 298 at 11. Yet, it is undisputed that Keys did not accomplish

the task Portofino appointed him to perform and the policies required—he admitted

as much. See ECF No. 225-1 at 341:18–21.21 This does not require the Court to

“rehear, reweigh, or reevaluate” the evidence that ostensibly supplied the basis of

the ultimate appraisal award, ECF No. 326 at 21 (citation modified), or otherwise

probe “the accuracy of the panel’s process,” Mont Claire at Pelican Marsh Condo.

Ass’n, Inc. v. Empire Indem. Ins. Co., 2024 WL 4635575, at *3 (11th Cir. Oct. 31,

2024); the Court only needs to take Portofino’s appraiser at his word.22 To be sure,

21 Perhaps sensing the walls closing in, Portofino makes a curious argument: “The Keys

appraisal team developed and presented the two component parts of establishing an amount of

loss; i.e., the scope of damages, and the price of repairing or replacing the damaged building

components.” ECF No. 301 at 11. Those mental gymnastics, however, are without citation to the

record and even that bare argument implicitly concedes that Portofino’s chosen appraiser never

stated the “amount of loss” as required by the policies.

22 Portofino repeatedly characterizes the aforementioned deposition testimony from Keys

and McCallister as cherry-picked and misleading and argues that the Insurers’ false portrayal is

“soundly rebutted” by Keys’ later-filed sworn declaration. ECF No. 301 at 9. The Court reviewed

both transcripts in their entirety and found the excerpts cited by the Insurers to be entirely

consistent with both Keys’ and McCallister’s broader testimony. Curiously, Portofino did not call

Keys, who ostensibly resides outside of the Court’s subpoena power, as a live witness at the

evidentiary hearing on the motion to vacate to expound on his prior testimony. And noticeably

absent from Keys’ newly filed declaration is any averment that he stated the “amount of loss”

caused by Hurricane Sally. See ECF No. 298-1. Likewise, the later-filed affidavit by McCallister

doubles down on his earlier testimony by claiming any “final estimates had to be determined by

the Umpire based on his conclusions as to scope.” ECF No. 246-3 at ¶ 13 (emphasis added); cf.

ECF No. 230-1 at 127:9–14 (“A. I put together pricing. It was not our task to put together scope.

The umpire put together the scope. Once he put together the scope, he applied our pricing or

whoever he agreed with, mine or the other side, and then he issued the award.”).

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the same policy concerns that animate the general rule barring courts from looking

under the hood of an appraisal or second guessing its outcome—namely, Florida’s

“overwhelming” preference for extra-judicial conflict resolution—weigh strongly in

favor of finding the appraisal award invalid here. See Middleton, 648 So.2d at 1201–

02. If appraisal is to be a viable alternative for resolving “amount of loss” issues,

rather than the first step on the long road of litigation, parties must be able to trust

that awards produced by the agreed-upon process will be binding and that one side

cannot rip up the rules (however limited they might be) of that process by fiat. See

Suarez, 833 So.2d at 765.23

Notably, Portofino has not identified any policy language or provision that

supports its appraiser’s actions. Rather, Portofino insinuates that the appraisal panel

agreed to modify the applicable policy language such that Keys was not required to

state the amount of loss and could instead submit a “price list” for the umpire to use

23 Perhaps what is most striking about Keys’ and McCallister’s respective testimony is the

obstinance with which each insisted that, for one excuse or another, they were somehow not

required to state the “amount of loss” to Portofino’s property caused by Hurricane Sally. They

both conceded that they knew the $233 million estimate did not reflect what it would cost to restore

Portofino’s property. Each concededly knew the à la carte pricing list could never serve as a

“market price” for the repairs. ECF No. 230-1 at 43:8–16. Yet they submitted it anyway—as a

“starting point.” ECF No. 225-1 at 342:1–2. Not only did this forsake Keys’ core function under

the appraisal provisions, but it also torched any chance of an agreement with the Insurers’

appraiser, as contemplated by the policy language. How could Lewis agree that an amorphous

catalogue of prices represented a true calculation of the hurricane damage incurred by Portofino’s

property? Keys and McCallister didn’t even buy that.

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when determining the appraisal award. Portofino, though, does not venture to

articulate how the appraisers (or the umpire for that matter) possessed the power or

authority to modify the appraisal provisions bargained for and agreed to by the

parties. In fact, the evidence cuts decisively the opposite way; Portofino’s

engagement agreement with Keys states that he was to serve as “an independent

appraiser and not an employee or agent” of Portofino. See ECF No. 262-5 at 1; see

also ECF No. 291-1 at ¶ 32 (averring that neither Keys nor his experts “were under

Portofino’s control or direction”). There is, in other words, no indication that even

Portofino’s appointed appraiser was authorized to negotiate contractual

modifications on its behalf.24

In a final effort, Portofino argues that the exclusive grounds for setting aside

an appraisal award are enumerated in Florida’s Arbitration Code, specifically, Fla.

Stat. § 682.13. Keys’ noncompliance with the appraisal provisions, so the argument

goes, does not fit within any of the statutory bases for vacatur and is therefore not

24 This argument also hinges on revisionist history. True, following the appraisal panel

hearings in August 2022, the umpire requested that both Keys and Lewis submit pricing

information. See ECF No. 246-3 at ¶ 9. But it is undisputed that Keys presented an à la carte

“price list” as the “statement of loss” to Portofino’s properties before that was ever requested by

the umpire. See ECF No. 230-1 at 130:4–25 (McCallister testifying that he was given the “exact

same instructions” by Keys and the umpire “at different times”).

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remediable.25 Portofino contends that the Florida Supreme Court’s decision in

Visiting Nurse Ass’n of Fla., Inc. v. Jupiter Med. Ctr., Inc., 154 So.3d 1115 (Fla.

2014) settles the issue. This, too, is easily dispelled. In Visiting Nurse, the Florida

Supreme Court held that Fla. Stat. § 682.13 “sets forth the only grounds upon which

an award of an arbitrator may be vacated.” Id. at 1134. However, Visiting Nurse

dealt with neither a property insurance dispute nor an appraisal—which, again, the

Florida Supreme Court has stressed is fundamentally different than arbitration due

to its relative informality and because it ordinarily resolves only the “amount of loss”

question, rather than the entirety of the dispute. See Suarez, 833 So.2d at 765;

Mango Hill, 117 So.3d at 1229; see also San Marco Villas, 379 So.3d at 1103

(rejecting caselaw as inapposite because it “had nothing to do with appraisal or

interpretation of an insurance policy”). Indeed, in a case concerning an insurance

appraisal decided just last year, the Florida Supreme Court took as a given that “a

judge or jury” would decide whether a policyholder “made misrepresentations

sufficient to warrant voiding the policy” under its terms. See San Marco Villas, 379

So.3d at 1104. Florida’s high court made no mention of the statutory grounds for

vacating an arbitration award (which includes a section covering fraud, see Fla. Stat.

25 Portofino has hardly been consistent on this score. It previously asserted that Florida’s

Arbitration Code doesn’t even apply to appraisal awards. See ECF No. 345 at 22:9–19.

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§ 682.13(1)(a)) and instead premised its discussion on the contractual provisions in

the underlying policy itself. Id.; see also Parrish v. State Farm Fla. Ins. Co., 356

So.3d 771, 774 (Fla. 2023) (looking to the “text of the insurance policy” to resolve

dispute over appraisal process).26 It therefore seems quite clear that, under Florida

law, the Insurers’ attacks on the appraisal award are not confined to Fla. Stat. §

682.13. See McMahan v. Toto, 311 F.3d 1077, 1079 (11th Cir. 2002) (“When

[federal courts] write to a state law issue, we write in faint and disappearing ink.”

(citation modified)); see also Towne Realty, Inc. v. Safeco Ins. Co. of Am., 854 F.2d

1264, 1269 n.5 (11th Cir. 1988) (federal courts are duty-bound to decide diversity

cases the way that it appears a state’s highest court would and may properly consider

dicta in so doing).27 But even if they were so confined, the Court alternatively

concludes that the award must be vacated because Keys committed “misconduct”

that prejudiced the Insurers’ rights in the appraisal proceeding. See Fla. Stat.

26 The Court is, of course, mindful that the discussion in San Marco Villas concerned

whether a “coverage defense” like fraud must be adjudicated before the parties proceeded to an

appraisal. See 379 So.3d at 1104.

27 To be sure, the Court has not identified any Florida court case expressly holding that

attacks on appraisal awards must be made under Fla. Stat. § 682.13. If anything, courts apply Fla.

Stat. § 682.13 with some hesitance to appraisal awards. And, more to the point, counsel for

Portofino conceded at the evidentiary hearing that the Insurers could pursue both contractual and

statutory attacks on the appraisal award (albeit maintaining that those arguments should rise and

fall together). See ECF No. 346 at 251:23–252:8.

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§ 682.13(1)(b)(3).28 Admittedly, a precise definition of “misconduct” under

Florida’s Arbitration Code has yet to take shape in the caselaw. The place to start is

the text of the statute. See Lab’y Corp. of Am. v. Davis, 339 So.3d 318, 323 (Fla.

2022). “The words of a statute are to be taken in their natural and ordinary

signification and import; and if technical words are used, they are to be taken in a

technical sense.” Id. (internal marks and citation omitted). Black’s Law Dictionary

defines “misconduct” as “a dereliction of duty; unlawful, dishonest, or improper

behavior, especially by someone in a position of authority or trust.” Misconduct,

BLACK’S LAW DICTIONARY (12th ed. 2024) (citation modified); see Raymond James

28 Years after the initial motion to vacate was filed, hundreds of pages of briefing, and a

two-day evidentiary hearing, Portofino presses for the first time in its closing statement that the

majority of the Insurers’ arguments under Fla. Stat. § 682.13 are untimely. See ECF No. 360 at

5–12; but see ECF No. 108 at 94, ¶ 28 (listing as an affirmative defense that “any allegations

related to vacating the appraisal awards pursuant to Florida Statutes § 682.13 fail to the extent they

were not timely pursued” (citation modified)). Portofino does so—again, for the first time—by

portraying the $187 million appraisal award as six distinct awards issued on separate dates. See

ECF No. 360 at 5–12. As Portofino now tells it, the motion to vacate under Fla. Stat. § 682.13

was made outside of the mandated 90-day window for all but one of the six awards. Id. at 7. But

Portofino can’t outrun its earlier admissions. In its Answer to the Amended Complaint, Portofino

admitted—without qualification—that there was one, singular appraisal award that issued “in

seven parts.” Compare ECF No. 104 at ¶¶ 140–149 with ECF No. 108 at 40–41, ¶¶ 140–149.

Absent amendment, “a party is bound by the admissions in his pleadings,” and Portofino cannot

spin a brand-new narrative that runs counter to its prior factual admissions moments before the

clock strikes midnight. Best Canvas Prods. & Supplies, Inc. v. Ploof Trust Lines, Inc., 713 F.2d

618, 621 (11th Cir. 1983). “Indeed, facts judicially admitted are facts established not only beyond

the need of evidence to prove them, but beyond the power of evidence to controvert them.” Cooper

v. Meridian Yachts, Ltd., 575 F.3d 1151, 1178 (11th Cir. 2009) (quoting Hill v. Federal Trade

Comm’n, 124 F.2d 104, 106 (5th Cir. 1941)). And the Court would be remiss if it did not note that

Portofino previously agreed to stay consideration of the original motion to vacate, filed nearly two

years ago, without so much as a peep about its timeliness (or lack thereof). See ECF No. 136.

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Fin. Servs., Inc. v. Phillips, 126 So.3d 186, 191 (Fla. 2013) (looking to Black’s Law

Dictionary to determine plain meaning of undefined statutory term). Portofino does

not quibble with that definition and the few Florida decisions on the subject closely

align. See Ferraro L. Firm, P.A. v. Royal Merch. Holdings, LLC, 394 So.3d 672,

675 (Fla. 3d DCA 2024) (arbitrator committed misconduct by basing award on

unpleaded claim); Quesada v. City of Tampa, 96 So.3d 924, 926 (Fla. 2d DCA 2012)

(arbitrator committed misconduct by conducting independent research beyond the

evidence presented at arbitration hearing). Keys’ intentional decision to submit a

$233 million “starting point,” which punted the scope of repairs question to the

umpire, in lieu of stating the “amount of loss” caused by Hurricane Sally easily

qualifies as a dereliction of the duty ascribed to him under the appraisal provisions.29

29 Portofino does not seriously dispute that Keys’ actions qualify as “misconduct” in its

closing statement on the renewed motion to vacate. See ECF No. 360. Instead, Portofino contends

that (i) the Insurers are attempting to improperly “repackage” an unpleaded argument that Keys

“exceeded his authority” under Fla. Stat. § 682.13(1)(d), which the Court indicated at the hearing

that it would not consider; and (ii) the Court ruled out any possibility that Keys’ actions could

amount to “misconduct” when it excluded the expert testimony of William Klein at the evidentiary

hearing. See id. at 28, 45. Not so. As to the former, the renewed motion to vacate expressly stated

that it was seeking vacatur, in part, because Keys’ estimate “did not actually represent the amount

of loss caused by Hurricane Sally” and identified “misconduct” under Fla. Stat. § 682.13(1)(b)(3)

as one of the statutory grounds for relief. ECF No. 257 at 24 (emphasis omitted). Plus, Keys’

failure to discharge the task he was appointed by Portofino to do—state the amount of loss

attributable to Hurricane Sally—fits more neatly within misconduct; to be sure, it’s difficult to

characterize someone not doing their job as exceeding the authority granted to them. As to the

latter, the Court’s evidentiary ruling swept no further than striking Mr. Klein’s testimony. Mr.

Klein’s testimony invited the Court to engage in a granular, after-the-fact analysis of Keys’

submission to purportedly demonstrate that specific figures were inflated and that Keys’

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And the prejudice flowing from Keys’ misconduct is evident: It almost immediately

derailed the appraisal process prescribed by the policies, triggering a domino effect

that frustrated any possibility that the appointed appraisers could reach an agreement

on the “amount of loss” and effectively required the umpire to formulate his own

estimate rather than resolve the differences between the appraisers, as contemplated

by the policy language.30 It was, in many ways, the original sin.31 As such, vacatur

under Fla. Stat. § 682.13 is likewise appropriate.

methodology departed from industry standards. Going down that rabbit hole is not sanctioned by

Fla. Stat. § 682.13. Critically, however, doing so is unnecessary in this case, where Keys admitted

(and Portofino concedes) that he never stated the “amount of loss.”

30 Indeed, under the agreed-upon appraisal process set forth in the policies, the umpire only

enters the picture if the appraisers disagree as to the “amount of loss.” See ECF No. 104-1 at 33,

265–66, 578, 594.

31 The Court has other, grave concerns with Keys’ actions throughout the appraisal. The

Court needn’t dwell on them, since this matter is neatly resolved on the narrower grounds discussed

above. Though, the Court will offer one modest observation: The facts here are eerily similar to

and coincide with the other cases, of which there are several, where Keys was found to have an

improper interest in the outcome of an appraisal. See, e.g., Parrish, 356 So.3d at 779 (“Because

[Keys] is to be compensated via contingency fee, he has a pecuniary interest in the outcome of the

claim and cannot qualify as a ‘disinterested’ appraiser.”); Auto-Owners Ins. Co. v. Summit Park

Townhome Ass’n, 886 F.3d 852, 857 (10th Cir. 2018) (affirming district court’s order disqualifying

Keys and finding appraisal award was “invalid under the terms of the insurance policy”);

Creekside Crossing Condo. Ass’n v. Empire Indem. Ins. Co., 2022 WL 962743 (M.D. Fla. Jan. 31,

2022) (disqualifying Keys); Copper Oaks Master Home Owners Ass’n v. Am. Family Mut. Ins.

Co., 2018 WL 3536324, at *5–*6 (D. Colo. July 23, 2018) (noting that Keys’ billing arrangement

bore none of the “traditional indicia of an hourly rate agreement,” and “Keys’ billing of clerical

time at inflated rates,” as well as “Keys’ own lackadaisical reaction to questions at trial about his

lax timekeeping also suggest . . . that Keys’ ‘hourly’ billings were simply a facade intended to

conceal what was, in reality, a standard contingent fee”; “the fact that Keys eventually submitted

an error-riddled, sometimes inflated invoice that just happened to amount to [a preset percentage]

of the value of the appraisal award was no coincidence” (citation modified)).

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At the end of the day, the appraisal award was produced by a process that

neither the Insurers nor Portofino bargained for or agreed to. The policies placed

very few guardrails on the two appraisers—it did not mandate they follow a specific

methodology, perform particular tests on the damaged property, or substantiate their

work—it simply required that they each state separately the “amount of loss.” Keys

never did. Accordingly, the Insurers’ motion for summary judgment on this issue is

GRANTED and the appraisal award is DECLARED invalid pursuant to 28 U.S.C.

§ 2201. Alternatively, the award is VACATED pursuant to Fla. Stat.

§ 682.13(1)(b)(3). The parties are ORDERED to conduct a new appraisal before a

new panel. The Clerk is directed to enter judgment in favor of the Insurers, tax and

costs against Portofino, and close the file.32

DONE AND ORDERED this 22nd day of September 2025.

M. Casey Rodgers

M. CASEY RODGERS

UNITED STATES DISTRICT JUDGE

32 Portofino’s counterclaims for breach of contract sink or swim with the validity of the

appraisal award. Because the appraisal award is not valid, Portofino’s counterclaims necessarily

fail.

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