The fight over the Portofino Towers appraisal award has been one of the largest of its kind in Florida. Its outcome has carried enormous stakes for both the condominium association and its insurers. What began as a $187 million appraisal award has now unraveled once the court dissected how the process unfolded, ultimately leading to a ruling that stripped the award of its validity and sent the case back for a new appraisal. 1 This story is not just about numbers, but also about how the appraisal process matters and how contractual provisions, previously undisputed, are interpreted.
The insurers’ central argument was that the appraisal process was fatally flawed because the appraiser for Portofino never fulfilled his duty under the policy. The appraisal clause required each party’s appraiser to state the value at the time of loss and the amount of loss. Instead of doing that, the appraiser presented the umpire with a sweeping $233 million “statement of loss” that functioned as a starting point or menu of repair costs, rather than a definitive amount of loss. Even his own pricing expert admitted it was essentially a price list rather than a calculation of what it would actually cost to restore the property.
By failing to provide a complete and independent amount of loss, the insurers argued that the entire process collapsed into one where the umpire was forced to build an award from scratch, a procedure that the contract never allowed. The insurers also contended that, even if the Florida Arbitration Code were applied, the conduct amounted to misconduct that prejudiced their rights and therefore justified vacating the award.
Portofino countered by insisting that courts are not supposed to second-guess appraisals and that their appraiser had, in fact, developed scope and pricing sufficient to comply with the policy. They maintained that disputes over the quality of the appraiser’s work were not grounds for judicial interference.
Portofino also pressed procedural defenses, arguing that the insurers’ motion to vacate was untimely because the award was issued in stages rather than as a single document. They further suggested that any challenge had to proceed solely under the limited statutory grounds for vacating arbitration awards in Florida, which they said did not encompass the insurers’ complaints. In their telling, the insurers were attempting to reframe dissatisfaction with the outcome as a process defect.
The federal court, however, saw the matter very differently. The judge held that the appraisal clause was not honored because the appraiser for Portofino failed to do one thing the contract required: state the amount of loss. His own testimony showed that he intentionally left scope determinations to the umpire, who then used the price list to generate a figure.
The court found that this fundamentally bypassed the structure of the clause, which envisions appraisers presenting their competing amounts of loss to each other, with the umpire acting only as a tiebreaker. The court reasoned that when an appraiser does not provide an actual loss amount, the umpire cannot compare two stated positions but instead must construct an award himself. That process is not what the parties agreed to in their insurance contract.
The judge also rejected Portofino’s attempt to confine the analysis to the Arbitration Code. While some courts have borrowed arbitration principles for appraisals, the Florida Supreme Court has emphasized that appraisals are distinct and primarily creatures of contract.
The court therefore looked first to whether the process violated the plain language of the policy. The court held that even if the statute applied, the conduct qualified as misconduct under Florida law because it amounted to a dereliction of duty that prejudiced the insurers. In either analytical path, the award could not stand.
Regarding the procedural defenses, the court found that Portofino had already admitted that there was a single award issued in seven parts. That admission foreclosed the argument that the motion to vacate was untimely. Attempting to reframe the award as multiple discrete awards after the fact could not bar judicial review.
The court suggested that it was not second-guessing the amount of loss or the quality of the evidence, but simply ensuring that the contractual process was followed. The court contrasted this case with others where courts declined to interfere, noting that the defect in this case was structural, not substantive.
In the end, the ruling invalidated the appraisal award and ordered a new appraisal to be conducted before a new panel. The court declared that the award was void under the contract for failure to comply with its terms and, in the alternative, vacated the award for misconduct under Florida’s Arbitration Code. It stopped short of reaching the insurers’ other challenges, including claims of fraud, notice failures, or disinterestedness, because the process defect was sufficient on its own to unravel the award.
This decision serves as a lesson that appraisal clause language is crucial and must be followed. Even in the most high-stakes disputes, the process must honor the contractual framework. Unless parties agree otherwise, when an appraiser fails to carry out the basic duty of stating an amount of loss, the entire award is vulnerable to challenge. For Portofino, what once looked like a two nine-figure triumph has now been reduced to a hollow victory as the court ordered everyone back to square one.
I am not certain what the next step will be. I anticipate that Portofino will challenge the ruling through appeal. I will keep readers up to date.
Thought For The Day
“You have to learn the rules of the game. And then you have to play better than anyone else.”
—Albert Einstein
1 Westchester Surplus Lines Ins. Co. v. Portofino Master Homeowners Assoc., No. 3:23-CV-00453 (N.D. Fla. Sept. 22, 2025). (See also, Westchester’s Motion for Summary Judgment, and Portofino’s Response to Motion for Summary Judgment).