Westchester Surplus Lines Insurance Co. and multiple Florida homeowners associations have ended their dispute in Florida federal court over the associations' more than $230 million insurance claim for Pensacola Beach condominiums damaged by Hurricane Sally.

According to their joint dismissal stipulation filed Monday, Westchester Surplus and the homeowners associations have agreed to permanently dismiss their claims against each other.

The insurer and the homeowners associations initially told the court in February that they decided to settle their dispute and planned to file a joint dismissal stipulation.

Westchester Surplus and 15 other insurers began their suit against the homeowners associations in January 2023. According to their amended suit, an appraiser picked by the defendants filed "an egregiously overinflated" hurricane damages claim for more than $230 million.

The insurers alleged that the defendants asked for an appraisal after Hurricane Sally hit and filed a more than $6.4 million sworn proof of loss claim. But, according to the insurers, this claim eventually "ballooned to an amount wholly detached from any actual damage resulting from the hurricane."

"In particular, the defendants' selected appraiser submitted estimates to the appraisal panel that include charges that are wholly improper, overstated, unrelated, duplicative, and attempt to turn the defendants' legitimate loss into a once-in-a-lifetime windfall at plaintiffs' expense," the insurers alleged.

"Defendants' appraiser increased the value of the claim from the unsolicited sworn proof of loss by over $225 million when he submitted an outrageous $233,030,601.80 claim to the appraisal panel, which raises significant questions concerning the appraiser's interest and honesty, as well as the fraudulent nature of the claim and its supporting documentation," they further alleged.

In September 2023, the defendants filed counterclaims against the insurers, alleging that the insurers breached their insurance policies by wrongfully refusing to pay for the appraised hurricane damage.

However, in September 2025, the presiding court nixed the defendants' $187 million appraisal award, ruling that the defendants' appraiser failed to properly state how much the condominiums were damaged by Hurricane Sally.

Counsel for Westchester Surplus and the defendants didn't respond to requests for comment Tuesday.

Westchester Surplus Lines Insurance Co. and multiple other insurers are represented by Alexandra J. Schultz, Juan P. Garrido and John D. Dickenson of Cozen O'Connor.

The Portofino defendants are represented by Edward P. Fleming, Matthew A. Bush and Aaron T. McCurdy of McDonald Fleming LLP, Kurtis J. Keefer of Goede DeBoest & Cross PLLC and Charles F. Beall Jr. of Moore Hill & Westmoreland PA.

The case is Westchester Surplus Lines Insurance Co. et al. v. Portofino Masters Homeowners Association Inc. et al., case number 3:23-cv-00453, in the U.S. District Court for the Northern District of Florida.