In People’s Tr. Ins. Co. v. Marzouka, 320 So. 3d 945 (Fla. 3d DCA 2021), the Third District considered the issue of when a trial court should dismiss an insured’s”s breach of contract claim and compel appraisal. In Marzouka, the complaint sought a declaratory judgment in addition to stating a breach of contract claim. People’s Trust sought appraisal.

The insureds alleged that People’s Trust’s infamous “preferred contractor endorsement” was unconscionable or otherwise unenforceable because: (1) “the insured has no choice but to accept [the insurer’s] contractor,” “cannot choose the materials used,” and the insureds were not provided with the contractor’s insurance information, licensure, or qualifications; (2) it does not specify how the repairs would take place and is void of basic information; and (3) it is unclear whether the repair option provision is material to the policy.

The Third District decided:

Because these are challenges targeting the enforceability of the appraisal and other policy provisions themselves, the trial court could not have granted the motion to compel appraisal as to the breach of contract claim without improperly and prematurely adjudicating these issues with regard to the declaratory judgment claims. Cf. Express Damage Restoration, LLC v. First Cmty. Ins. Co., 314 So.3d 532, 534 (Fla. 3d DCA Dec. 9, 2020) (“[T]o the extent that the trial court decided the very question of construction that was the subject of the declaratory action, the assignee is correct that the court procedurally erred in failing to deny the motion [to dismiss and compel appraisal].”) (citing Royal Selections, Inc. v. Fla. Dep’t of Revenue, 687 So. 2d 893, 894 (Fla. 4th DCA 1997) (holding that, “[i]n determining that the appellant did not state a cause of action, the trial court actually construed the various ordinances and administrative rules [at issue],” which “is the very question sought to be answered in the declaratory action,” and that “the trial court cannot dispose of it on a motion to dismiss”); and Travelers Ins. Co. v. Emery, 579 So. 2d 798, 799 (Fla. 1st DCA 1991)(reversing final judgment denying declaratory relief and remanding for trial court to determine coverage issue requiring construction of insurance policy)).

The fact that, reasoned the Third District, the insureds raised those same enforceability issues in response to the motion to dismiss and compel appraisal would not have changed the premature nature of the trial court’s grant of the insurer’s motion. Cf. Mills v. Ball, 344 So. 2d 635, 638 (Fla. 1st DCA 1977) (“In spite of the fact that appellant, in his motion to dismiss, raised an issue on the merits, a ruling by the trial court on the merits at that time was premature.”). Such an order would have been, as argued by the insureds, the functional equivalent of summary judgment on those issues for purposes of the declaratory counts. See Wrightson v. ITT Fin. Servs., 617 So. 2d 334, 336 (Fla. 1st DCA 1993)(reversing order compelling arbitration, in part, because trial court erred in finding that no substantial issues of fact regarding validity of arbitration agreements existed and such issues were not amenable to resolution as matter of law at that stage).