Case Law Update: Citizens v. Diaz — Third DCA Affirms Jury Verdict for Homeowners on a Hidden A/C Water Leak

On August 26, 2026, Florida’s Third District Court of Appeal affirmed a final judgment entered for two Miami-Dade homeowners against their property insurer in Citizens Property Insurance Corporation v. Jorge Diaz and Sandra Diaz, No. 3D24-2247. Citizens had appealed a judgment entered consistent with a jury’s verdict for the insureds, arguing that the trial court should have granted its motion for directed verdict. The panel — Judge Logue writing, with Chief Judge Scales and Judge Bokor on the panel — rejected that argument and affirmed, holding that the homeowners had carried their burden of proving an exception to the policy’s constant-or-repeated-seepage exclusion.

How the case got here

The appeal came from the Circuit Court for Miami-Dade County, Lower Tribunal No. 19-20323-CA-01, where Judge Reemberto Diaz presided. The case was tried to a jury, which returned a verdict for the insureds; the trial court entered final judgment on that verdict. Citizens appealed, and its central appellate argument was that the trial court erred in denying its motion for directed verdict — in other words, that the evidence was so one-sided that the case should never have reached the jury at all. The Third District reviewed that denial de novo, citing Security First Insurance Co. v. Moreno, 427 So. 3d 594, 597 n.2 (Fla. 3d DCA 2026).

The opinion states the governing standard by quoting Meruelo v. Mark Andrew of Palm Beaches, Ltd., 12 So. 3d 247, 250 (Fla. 4th DCA 2009): “A trial court should grant a motion for directed verdict when the evidence, viewed in the light most favorable to the non-moving party, shows that a jury could not reasonably differ about the existence of a material fact and the movant is entitled to judgment as a matter of law.” That standard is deliberately demanding, and it is the reason the outcome turned on what the trial record contained rather than on any new rule of coverage law.

The holding: the hidden-and-unknown exception carried the day

Applying that standard, the court wrote that “based on our review of the trial testimony and evidence, the Insureds met their burden of establishing an exception to an exclusion—that the damage caused by the constant or repeated seepage or leakage of water from the air conditioning system was both unknown to the Insureds and ‘hidden within the walls or ceilings or beneath the floors or above the ceilings of a structure.’”

That single sentence carries the practical weight of the opinion. Many Florida homeowners policies exclude damage caused by constant or repeated seepage or leakage of water over a period of time, and carriers routinely invoke that exclusion when a long-running plumbing or air-conditioning leak is discovered. But those same policy forms commonly contain an exception restoring coverage where the seepage was both unknown to the insured and hidden inside the building’s walls, ceilings, or floors. Here, the jury heard the evidence on those two elements, and the appellate court concluded a reasonable jury could find them satisfied.

On who has to prove what, the court cited East Florida Hauling, Inc. v. Lexington Insurance Co., 913 So. 2d 673, 678 (Fla. 3d DCA 2005), for the proposition that “[i]f there is an exception to the exclusion, the burden once again is placed on the insured to demonstrate the exception to the exclusion.” That is a burden the insured bears, not the carrier — and in this record the insureds met it.

The court disposed of the rest of the appeal briefly: “Finally, we have considered the remaining arguments raised by Citizens and conclude that the issues do not merit reversal.” It affirmed the trial court’s final judgment entered in favor of the insureds.

What this means if you have a Florida water-damage claim

Nothing in this opinion changes the text of anyone’s policy, and every claim turns on its own facts, policy language, and record. Still, a few practical points are worth noting for homeowners and claims professionals working long-term-leak files.

First, a denial letter citing the constant-or-repeated-seepage exclusion is not automatically the end of the analysis. If the policy contains a hidden-and-unknown exception, the question shifts to two factual issues: whether the water was escaping somewhere concealed within the structure, and whether the homeowner actually knew about it. Both are ordinary questions of fact.

Second, those two elements are the insured’s to prove. Under East Florida Hauling as the Third District applied it here, once the carrier establishes the exclusion, the burden returns to the policyholder to bring the loss back within coverage through the exception. That makes the evidence assembled early — where the leak was, what was visible from living space, when and how it was discovered, what a plumber or remediation contractor observed on opening the wall or ceiling — central rather than incidental.

Third, because directed-verdict review is de novo but the standard is strict, the trial record is what an appellate court has to work with. This case reached the jury and survived appeal on the strength of what was put in evidence at trial.

This opinion is not final until disposition of any timely filed motion for rehearing, and it should be read as one panel’s application of settled burden-shifting rules to a specific trial record rather than as a guarantee about any other claim. If a Florida property insurer other than Citizens has denied or underpaid your water-damage claim, Louis Law Group offers a free case evaluation. For background on the process, see our guide on a denied homeowners insurance claim in Florida.

Case: Citizens Property Insurance Corporation v. Jorge Diaz and Sandra Diaz, No. 3D24-2247 (Fla. 3d DCA Aug. 26, 2026), affirming a final judgment from the Circuit Court for Miami-Dade County (Lower Tribunal No. 19-20323-CA-01). Counsel of record: De Novo and Kathryn L. Ender for Citizens; Mintz Truppman, P.A., and Timothy H. Crutchfield for the insureds. Article current as of August 27, 2026.