Late-Notice Presumption Rebutted by Insurer’s Own Investigation Evidence Creates a Jury Question Under Florida Property Insurance Law

1. Introduction

A storm struck Winter Springs, Florida in April 2021. The insured condominium association, Baytree, waited nine months—until January 2022—to notify its insurer, Clear Blue Specialty Insurance Company, of alleged wind and hail roof damage across four buildings. Clear Blue investigated under reservation of rights, found limited covered shingle damage on three buildings, estimated repairs below the deductible, and offered appraisal only as to the covered line items. Baytree sued for (i) a declaratory judgment compelling appraisal of the “entire claim,” and (ii) breach of the insurance policy for failure to indemnify.

The litigation split into two phases: Baytree first sought summary judgment compelling appraisal; later, Clear Blue sought summary judgment on both claims based on late notice (a post-loss condition). During phase two, the district court also excluded an untimely “supplemental” meteorology opinion offered by Baytree after discovery closed.

The Eleventh Circuit affirmed the denial of Baytree’s appraisal-focused summary judgment and affirmed exclusion of the untimely supplemental expert opinion, but reversed summary judgment for Clear Blue because Baytree produced evidence creating a jury question on whether late notice actually prejudiced Clear Blue’s investigation.

2. Summary of the Opinion

• Appraisal (Phase One): Appraisal was not compelled because compliance with the policy’s prompt notice provision remained a live coverage issue. Clear Blue did not waive its notice defense where it issued prompt reservation-of-rights letters and did not “unconditionally” accept liability.
• Expert evidence (Phase Two): The district court did not abuse its discretion in excluding Baytree’s late “supplemental” expert opinion under Federal Rules of Civil Procedure 26 and 37 because the new opinion expanded the temporal scope (asserting no intervening storms for nine months), came after discovery, and prejudiced Clear Blue.
• Late notice / prejudice (Phase Two): Even though Baytree’s nine-month delay was untimely (triggering a presumption of prejudice), Baytree rebutted that presumption sufficiently to reach a jury by pointing to testimony from Clear Blue’s own engineer, field adjuster, and final adjuster that the delay did not prevent determining cause, scope, or repair cost.

3. Analysis

A. Precedents Cited

1) Appraisal availability: amount-of-loss vs. coverage disputes

• Johnson v. Nationwide Mut. Ins. Co., 828 So. 2d 1021 (Fla. 2002): The foundational Florida rule that appraisal is appropriate when the parties agree a loss is covered but disagree on the amount of loss. The Eleventh Circuit treated Johnson as the controlling divider between appraisal-eligible valuation disputes and appraisal-ineligible coverage disputes.
• State Farm Fla. Ins. Co. v. Hernandez, 172 So. 3d 473 (Fla. Dist. Ct. App. 2015): Critical to the court’s appraisal analysis. Hernandez frames compliance with an “immediate notice” requirement as a post-loss obligation raising “a question of liability,” thus precluding compelled appraisal while notice compliance is disputed. The Eleventh Circuit used Hernandez to reject Baytree’s effort to force appraisal while late notice remained unresolved.

2) Waiver of notice defenses and the effect of reservation-of-rights conduct

• Laird v. Chi. Ins. Co., 227 So. 2d 230 (Fla. Dist. Ct. App. 1969): Cited for the proposition that notice requirements can be waived by insurer conduct.
• Sec. First Ins. Co. v. Visca, 387 So. 3d 313 (Fla. Dist. Ct. App. 2024) (citing Am. Somax Ventures v. Touma, 547 So. 2d 1266 (Fla. Dist. Ct. App. 1989)): Supplies the operative waiver standard: the insurer must “clearly demonstrate an intent” to relinquish the contractual right. The Eleventh Circuit held Clear Blue’s repeated reservations of rights negated any “clear” intent to waive prompt notice.
• Nu-Air Mfg. Co. v. Frank B. Hall & Co. of N.Y., 822 F.2d 987 (11th Cir. 1987) (citing Wegener v. Int'l Bankers Ins. Co., 494 So. 2d 259 (Fla. Dist. Ct. App. 1986); Hartford Accident & Indem. Co. v. Phelps, 294 So. 2d 362 (Fla. Dist. Ct. App. 1974); Am. Ins. Co. of Newark v. Burson, 213 F.2d 487 (5th Cir. 1954)): Used to illustrate waiver by unconditional denial of liability. The panel contrasted that category with Clear Blue’s conditional conduct—investigation under reservation and explicitly non-waiving communications.
• Axis Surplus Insurance Co. v. Caribbean Beach Club Ass'n, 164 So. 3d 684 (Fla. Dist. Ct. App. 2014): Baytree relied on Axis Surplus to argue reservation-of-rights letters do not prevent waiver. The Eleventh Circuit distinguished it on timing and conduct: Axis Surplus involved over two years of adjustment before the insurer raised a policy requirement; here Clear Blue raised late-reporting concerns almost immediately and repeated its reservation after investigation.

3) Federal expert disclosure and exclusion (Rules 26/37)

• Guevara v. NCL (Bahamas) Ltd., 920 F.3d 710 (11th Cir. 2019) (citing Corwin v. Walt Disney Co., 475 F.3d 1239 (11th Cir. 2007)): The primary authority for excluding untimely expert opinions and for rejecting “supplements” that actually “bolster a defective or problematic” report after discovery. The panel treated Baytree’s post-deadline “no intervening storms” opinion as analogous to the improper bolstering in Guevara.

4) Late notice and the presumption-of-prejudice burden shift under Florida law

• Perez v. Citizens Prop. Ins. Corp., 343 So. 3d 140 (Fla. Dist. Ct. App. 2022): Cited for the purpose of notice provisions—timely investigation, evaluation of rights/liabilities, and fraud prevention.
• Bensen v. Privilege Underwriters Reciprocal Exch., 401 So. 3d 390 (Fla. Dist. Ct. App. 2023) (citing Bankers Ins. Co. v. Macias, 475 So. 2d 1216 (Fla. 1985); LoBello v. State Farm Fla. Ins. Co., 152 So. 3d 595 (Fla. Dist. Ct. App. 2014)): Supplies the “two-step process”: (1) insurer proves untimely notice; (2) prejudice is presumed and the insured may rebut.
• 1500 Coral Towers Condo. Ass'n v. Citizens Prop. Ins. Corp., 112 So. 3d 541 (Fla. Dist. Ct. App. 2013) (citing Soronson v. State Farm Fla. Ins. Co., 96 So. 3d 949 (Fla Dist. Ct. App. 2012)): Used for burden allocation at step two: once prejudice is presumed, the insured must show lack of prejudice.

5) What evidence creates (or defeats) a jury question on prejudice

• Stark v. State Farm Florida Insurance Co., 95 So. 3d 285 (Fla. Dist. Ct. App. 2012): A key comparator. Where the insurer’s investigator could still determine storm damage, the presumption of prejudice became a fact issue for the jury.
• Shapiro v. First Protective Insurance Co., 359 So. 3d 777 (Fla. Dist. Ct. App. 2023): Another comparator. Expert testimony that damage remained observable and causation determinable despite delay was enough to reach the jury.
• Navarro v. Citizens Property Insurance Corp., 353 So. 3d 1276 (Fla. Dist. Ct. App. 2023); Hope v. Citizens Property Insurance Corp., 114 So. 3d 457 (Fla. Dist. Ct. App. 2013); Perez v. Citizens Prop. Ins. Corp., 343 So. 3d 140 (Fla. Dist. Ct. App. 2022); 1500 Coral Towers Condo. Ass'n v. Citizens Prop. Ins. Corp., 112 So. 3d 541 (Fla. Dist. Ct. App. 2013); Bouchard v. Citizens Property Insurance Corp., 406 So. 3d 311 (Fla. Dist. Ct. App. 2025): These cases illustrate the opposite pattern—record evidence that delay prevented attribution to a covered cause or otherwise impaired adjustment. The Eleventh Circuit distinguished them because Clear Blue’s own witnesses here testified that the late notice did not hinder investigation or coverage determination.
• Sotolongo v. Safepoint Insurance Co., 404 So. 3d 487 (Fla. Dist. Ct. App. 2 02 4): Identified as a per curiam affirmance without facts, and thus not meaningful for comparison.

6) Appellate standards and issue preservation

• Jurich v. Compass Marine, Inc., 764 F.3d 1302 (11th Cir. 2014); Bussinger v. City of New Smyrna Beach, 50 F.3d 922 (11th Cir. 1995): Stated standards for reviewing summary judgment grants/denials.
• CSX Transp., Inc. v. Gen. Mills, Inc., 846 F.3d 1333 (11th Cir. 2017): Used to reject Baytree’s attempt to revive a waiver argument on appeal that it did not raise at phase two in response to summary judgment.

B. Legal Reasoning

1) Why appraisal was denied (and why waiver failed)

The court treated appraisal as procedurally downstream of coverage. Under Johnson v. Nationwide Mut. Ins. Co., appraisal resolves valuation, not whether contractual conditions precedent to coverage (like prompt notice) were satisfied. Citing State Farm Fla. Ins. Co. v. Hernandez, the panel held that compliance with the notice provision is a “question of liability” and therefore blocks compelled appraisal while unresolved.

Baytree’s strategy was to bypass that obstacle by arguing Clear Blue waived the notice defense by adjusting the claim and agreeing to some appraisal. The court rejected waiver because waiver requires a “clear” intent to relinquish the notice right (Sec. First Ins. Co. v. Visca), and Clear Blue’s prompt and repeated reservation-of-rights letters demonstrated the opposite intent. The panel emphasized the conditional nature of Clear Blue’s conduct: investigation and partial coverage acknowledgment expressly “under” reservation of rights is not the “unconditional” denial/acceptance behavior that can trigger waiver (as discussed in Nu-Air Mfg. Co. v. Frank B. Hall & Co. of N.Y.).

The distinction from Axis Surplus Insurance Co. v. Caribbean Beach Club Ass'n turned on timing and silence: prolonged adjustment before raising a defense can support waiver/estoppel-type arguments; immediate and reiterated reservations tend to defeat them.

2) Why the “supplemental” expert opinion was excluded

Relying on Guevara v. NCL (Bahamas) Ltd., the panel treated Calaci’s post-deadline statement (“the April 11, 2021 storm was the only storm to impact the property… and there were no other intervening storms”) as a new, material opinion rather than a permissible supplement. It expanded the analytical time window from April 2021 to a nine-month period, addressed a predictable causation challenge (intervening weather), and arrived after expert discovery—depriving Clear Blue of deposition and rebuttal on that theory. With no substantial justification and clear prejudice, exclusion fell within the district court’s broad discretion under Guevara and Rule 37.

3) Why summary judgment for the insurer was reversed on late-notice prejudice

The panel accepted step one: Baytree’s nine-month delay was not “prompt notice,” so prejudice was presumed under the two-step framework described in Bensen v. Privilege Underwriters Reciprocal Exch. (citing Bankers Ins. Co. v. Macias) and burden-shifting principles from 1500 Coral Towers Condo. Ass'n v. Citizens Prop. Ins. Corp..

But at step two, the Eleventh Circuit held Baytree produced sufficient record evidence to rebut the presumption and reach a jury—most notably, admissions from Clear Blue’s own personnel: (i) the engineer testified nothing prevented determining cause/extent and there was no evidence of worsening between storm and inspection; (ii) the field adjuster testified nothing prevented estimating scope/cost and he had everything needed; and (iii) the final adjuster testified nothing hindered her coverage determination. Clear Blue also in fact adjusted the claim and offered appraisal on the covered shingle issues.

This evidence aligned with the jury-question holdings in Stark v. State Farm Florida Insurance Co. and Shapiro v. First Protective Insurance Co.. The court distinguished insurer-favorable cases like Navarro v. Citizens Property Insurance Corp. and Hope v. Citizens Property Insurance Corp. because those records contained affirmative evidence that delay and repairs prevented causation findings or a coverage determination—evidence absent here and arguably contradicted by Clear Blue’s own witnesses.

C. Impact

1) Practical effects on Florida late-notice litigation

• Insurer testimony can rebut insurer presumptions: This decision highlights a common litigation inflection point: once prejudice is presumed, insureds can still reach a jury by pointing to insurer witness testimony demonstrating a complete and effective investigation notwithstanding delay.
• Summary judgment becomes harder when the insurer investigated anyway: When an insurer issues a causation opinion, scope estimate, and coverage determination, it may unintentionally supply the insured’s rebuttal evidence on prejudice—depending on what its adjusters/experts concede in depositions.
• Insurers may document “specific prejudice” more carefully: To win at summary judgment under the Florida framework, insurers will likely develop evidence that the delay impaired the ability to attribute damage to a covered cause, segregate damages, inspect pre-repair conditions, or evaluate fraud—rather than relying on presumption alone.

2) Appraisal disputes: reserving rights preserves coverage defenses

• Reservation-of-rights letters matter: The decision reinforces that prompt and repeated reservations of rights can defeat arguments that claim handling or partial appraisal participation “waived” post-loss conditions like prompt notice.
• Appraisal remains unavailable when notice compliance is contested: Under State Farm Fla. Ins. Co. v. Hernandez, appraisal cannot be used to circumvent coverage disputes about post-loss obligations.

3) Federal practice: limits on “supplemental” expert reports

• “Supplement” is not a do-over: Parties should assume that adding a materially new opinion after deadlines—especially one aimed at curing a foreseeable weakness—risks exclusion under Guevara v. NCL (Bahamas) Ltd..

4. Complex Concepts Simplified

• Appraisal (in property insurance): A contractual process (appraisers + umpire) to set the amount of loss. It does not decide whether the policy covers the loss in the first place.
• Coverage dispute vs. amount-of-loss dispute: “Coverage” asks whether the insurer must pay at all (including whether the insured satisfied post-loss duties like prompt notice). “Amount of loss” asks how much must be paid if coverage exists.
• Reservation of rights: A letter stating the insurer will investigate/handle the claim but does not give up policy defenses (e.g., late notice). It is designed to prevent “waiver” arguments.
• Waiver: Under Florida law as described here, waiver requires a clear intent by the insurer to give up a contractual right; it is not lightly inferred from routine claim handling, particularly where rights are expressly reserved.
• Presumption of prejudice from late notice: If notice is untimely, Florida law presumes the insurer was harmed in its ability to investigate/adjust. The insured can rebut by showing the delay did not actually hinder the insurer (often using inspection results and witness testimony).
• Rule 26(e) “supplementation”: Intended to correct or complete prior expert disclosures—not to add new opinions after the deadline to strengthen a case.

5. Conclusion

Baytree underscores three litigation-significant rules in Florida property insurance disputes litigated in federal court. First, appraisal is not compelled when a post-loss condition like prompt notice remains a live coverage issue, and an insurer’s prompt reservation of rights generally defeats waiver arguments premised on claim adjustment or partial appraisal participation. Second, late “supplemental” expert opinions that materially expand the scope of the original report are vulnerable to exclusion under Rules 26 and 37 and Guevara v. NCL (Bahamas) Ltd.. Third—and most consequential for many late-notice cases—while prejudice is presumed after untimely notice, insureds can survive summary judgment when the insurer’s own witnesses acknowledge that the delay did not impair investigation, causation analysis, scope determination, or the coverage decision, creating a jury question under the framework reflected in Bensen v. Privilege Underwriters Reciprocal Exch., Stark v. State Farm Florida Insurance Co., and Shapiro v. First Protective Insurance Co..