Lawyers who specialize in “first-party property insurance litigation” know that Citizens Property Insurance Corporation’s corporate representatives–used by Citizens to testify both at depositions and at trial–have no personal knowledge regarding anything relevant to the case. It is not that they forgot; they never had any personal knowledge. They are never a person who was involved in adjusting the claim or having any involvement in reviewing the claim or inspecting the property, at all, presuit. Rather, after a lawsuit is filed, they review a cold file (a paper file), don’t speak to the field adjuster or anyone else other than Citizens’ lawyers, and essentially study the paper file to prepare for their deposition testimony in the way a college student might study for a test. Some come to the deposition more prepared to talk about the case than others. What happens, then, is that Citizens gets away with having “corporate representatives”–who are supposed to be able to present the position of the defendant in the lawsuit, including Citizens’ positions on the “ultimate issues” to be decided by the jury–show up to testify while being wholly unprepared and not properly prepared to testify under the requirements of Florida Rule of Civil Procedure 1.310(b)(6).

Coupled with Citizens’ lawyers often making inappropriate and misplaced objections and even wrongly instructing the witness not to answer based on a misunderstanding of the law about “general claims handling practices,” when a “privilege” is not at stake, it is very difficult for a homeowners’ lawyer to get anything useful out of a deposition of a Citizens corporate representative.

A recent appellate decision shows that Citizens can get itself into trouble when it tries to solely rely on such uninformed and uninvolved witnesses at trial. In Mesa v. Citizens Property Ins. Corp., 358 So. 3d 452 (Fla. 3d DCA 2023), the Third District confronted such a case.

In Mesa, appellants Maria Mesa and Roxana De Leon (“Insureds”), the plaintiffs in the trial court case, appealed a final judgment for appellee Citizens Property Insurance Corporation (“Citizens”), the defendant in the trial court case, rendered after a jury found that rainwater damage suffered by Insureds’ home was not covered under Insureds’ property insurance policy with Citizens. Underlying the jury’s verdict was a policy provision excluding coverage for a loss caused by rainwater unless a covered peril first damaged the home causing an opening in the home’s roof through which the rainwater entered. Because Citizens’ primary rebuttal evidence supporting the jury’s verdict on this pivotal fact issue was the inadmissible hearsay testimony from Citizens’ corporate representative who, admittedly, had no personal knowledge of the facts about which she was allowed to testify, and because the court was unable to conclude that such error was harmless, the appellate court reversed the judgment and remanded for a new trial.

The Third District reviewed the background facts. Citizens issued a property insurance policy for Insureds’ home for the policy period between June 24, 2017, and June 24, 2018. The policy provided coverage for a physical loss to the dwelling but, as relevant here, excluded coverage for “loss . . . [c]aused by . . . [r]ain . . . unless a covered peril first damages the building causing an opening in a roof . . . and the rain. . . enters through this opening.” On July 16, 2017, Insureds’ home was damaged when rainwater entered through the home’s roof and damaged the home’s interior.

Insureds reported the loss to Citizens and, on August 1, 2017, Citizens’ field adjuster inspected the property. The field adjuster took photographs of the roof and prepared a report that documented the field adjuster’s findings. Based solely on the field adjuster’s documentation of wear and tear, and the field adjuster’s determination that there was no wind-created opening in the roof, Citizens denied coverage for the claim on August 14, 2017.

On November 9, 2017, Insureds filed a first-party action against Citizens in the Miami-Dade County circuit court seeking coverage for their loss. Citizens’ amended answer and affirmative defenses denied that there was coverage, in part, based on the above referenced policy exclusion. The trial court held a three-day jury trial on November 1-3, 2021. The primary issue at trial was whether, on July 16, 2017, wind (the covered peril) had created an opening in the insured home’s roof through which the rainwater then entered.

To this end, both sides presented expert testimony from a meteorologist and an engineer. Insureds also presented the testimony of their public adjuster, who had inspected the property on November 21, 2019, nearly two years after the loss. Importantly, Citizens’ field adjuster did not testify at trial. Nor did Citizens seek to introduce the field adjuster’s report into evidence as a business record.

Rather, Citizens presented the testimony of Alicia Wright, who identified herself as “the corporate representative for Citizens.” Wright testified that she had reviewed the claim file and, as “the voice of Citizens,” had “come to advise [the jury] what happened throughout the claim.”

*** As an aside, this is what Citizens does. They think they deserve what is known to lawyers as “Chevron deference.” Sure, Citizens does not articulate their view in that express manner, but that is what they ask judges and juries to give them. They want deference as a sophisticated entity with “expertise,” and they bring their people to court to “explain” to the jury “what happened,” with a strong hint that what Citizens concludes cannot be challenged. In Mesa, Citizens’ corporate representative was “the voice of Citizens” who was there to merely “advise” the jury on how to think about what had happened. In a recent case I tried against Citizens a few weeks ago, they used the term “historian.” The corporate representative was merely a “historian” who was there–for the jury’s convenience, of course–to “explain” to the jury what to think and how to view the contested issues in the case. The “historian”–who admittedly had no personal knowledge about any of the facts of the case–was there merely to “walk [the jury] through” the proper analysis of the case. As I told the jury during my closing argument, Citizens’ attitude in these cases reminds me of a silly t-shirt I saw someone wearing the other day. It said, “I’m not arguing; I’m simply explaining why I’m right.” That’s the attitude Citizens takes in roof leak cases, from day one and continuing through trial ***

But back to the Mesa decision. Over Insureds’ counsel’s objection that “the witness does not have personal knowledge,” the trial court permitted Wright to testify as to the contents of the field adjuster’s report. Specifically, Wright testified that, after viewing the field adjuster’s photos (that were admitted at trial) and the field adjuster’s “documented . . . findings within the file” — including documentation of “wear and tear, prior repairs to the roof, deteriorated areas on the roof[,] . . . water pooling on the roof” and “no evidence of wind damage to the roof” — Citizens had agreed with the field adjuster’s determination that “during his inspection, he didn’t find any covered loss to the roof.”

At the close of the evidence and consistent with the subject policy exclusion, the trial court instructed the jury that “Plaintiffs have the burden of proof by the greater weight of the evidence that their property incurred a direct physical loss for a covered peril on July 16, 2017 and that a covered peril caused an opening in the roof which allowed rain to enter and that opening caused damage to the interior of the property.” The jury returned a verdict in favor of Citizens. Insureds thereafter filed a motion for new trial arguing, among other things, that a new trial was warranted because the trial court erred in permitting Wright, over the objection that Wright lacked personal knowledge, to testify as to the contents of, and relay to the jury the opinions contained within, the field adjuster’s report. The trial court denied the motion for new trial and entered the challenged judgment that Insureds appealed.

On appeal, the Third District agreed with Insureds that the trial court abused its discretion by permitting what was clearly inadmissible hearsay testimony from Citizens’ corporate representative, Alicia Wright. See §90.604, Fla. Stat. (2021) (“Except as otherwise provided in s. 90.702, a witness may not testify to a matter unless evidence is introduced which is sufficient to support a finding that the witness has personal knowledge of the matter.”); § 90.801(1)(c), Fla. Stat. (2021) (“`Hearsay’ is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.”). Indeed, the court noted, in its answer brief, Citizens seemed to concede the error, citing as authority for the testimony only Florida Rule of Civil Procedure 1.310(b)(6). (This is the rule of civil procedure that governs “corporate representative depositions.)

The court noted that while this rule permits a corporation to designate an individual to appear at a deposition to “testify about matters known or reasonably available to the organization,” Id., Citizens cited to no authority that this discovery rule is tantamount to a trial hearsay exception. (And, of course, it is not.) In fact, reasoned the court:

… it is well established that a trial court reversibly errs by allowing a witness to testify as to the contents of a business record when the business record itself is not entered into evidence. See Mace v. M&T Bank, 292 So. 3d 1215, 1220 (Fla. 2d DCA 2020) (“[T]he Bank did not present any testimony by a witness with personal knowledge that the [default] letter was mailed. . . . [Rather,] any information she did have came from conversations she had with someone . . . and her review of Bank records that were not offered or admitted into evidence. It should go without saying (1) that testimony by a witness without personal knowledge is inadmissible, and (2) that testimony based on what other people or documents say, when offered for the truth of the matter, is hearsay and, when unaccompanied by any showing that an exception to the hearsay rule applies, is inadmissible.”) (citations omitted); Roberts v. Direct Gen. Ins. Co., 337 So. 3d 889, 891 (Fla. 2d DCA 2022) (“But `[w]hile the business-records exception . . . allows the admission of `[a] memorandum, report, record, or data compilation,’ it does not authorize hearsay testimony concerning the contents of business records which have not been admitted into evidence.” (quoting Thompson v. State, 705 So. 2d 1046, 1048 (Fla. 4th DCA 1998))).

Absent Citizens’ introduction of its field adjuster’s report at trial as a business record, held the court, Wright was only competent to testify from her personal knowledge of the condition of the home’s roof. Citizens had not sought to establish that Wright possessed such personal knowledge at trial, nor did Wright’s testimony reveal that she was testifying based on personal knowledge. The Third District concluded that, therefore, the trial court had erred by permitting Wright’s testimony as to the contents of, and opinions contained within, the field adjuster’s report.

The appellate court further held that the trial court’s error had not been harmless. The court ended its opinion with a concise summary of what had happened:

Insureds’ property incurred water damage on July 16, 2017. Citizens’ field adjuster inspected the roof on August 1, 2017. Citizens denied the claim on August 14, 2017. According to Wright’s testimony, Citizens denied the claim based solely on the field adjuster’s determination that the roof had wear and tear and that wind did not create an opening in the roof that allowed the rainwater to enter the property’s interior. While Citizens did present expert witnesses at trial to support its argument that there was no wind-created opening in the roof, those experts did not have the opportunity to inspect the roof near the time that Insureds made their claim and their expert opinions did not have an impact on Citizens’ decision to deny the claim. On this record, Citizens failed to prove that there is no reasonable possibility that Wright’s hearsay testimony contributed to the jury verdict in Citizens’ favor. See Hamilton, 316 So. 3d at 342-43 (concluding that the erroneous admission of hearsay testimony was not harmless because, “considering the strong evidentiary value of Mrs. Hamilton’s statement, it cannot be said there is no reasonable possibility that the error contributed to the verdict”).

The court, therefore, felt compelled to reverse the final judgment for Citizens and remand for a new trial.