Florida Supreme Court Decision Decimated Multiple Policyholder Rights & Remedies

Although many homeowners successfully seek remedies in Florida courts when policyholders are mistreated by their insurance carrier, some court decisions can have a crippling effect on the ability of policyholders to obtain a fair outcome.  The Florida Supreme Court’s decision in QBE Insurance Corporation v. Chalfonte Condominium Apartment Association constitutes one of the most significant and damaging decisions for insurance policyholders in recent years.  Florida’s highest court decimated valuable tools for policyholders seeking to compel their insurance company to honor its contractual obligations under insurance policies.

The first part of the decision, which decimated the common law remedy of bad faith, was the most damaging aspect of the decision for policyholders.  The Florida Supreme Court was asked to determine whether a common law first-party claim for breach of implied warranty of good faith and fair dealing existed after the creation of a statutory bad faith remedy.  The state’s highest court determined that no common law cause of action exist against insurance companies that fail to investigate, adjust and pay claims in a timely manner in the wake of Fla. Stat. § 624.155.

The Court relied on the legislative history of the statutory provision in determining that no common law first-party bad faith cause of action survived enactment of the insurance bad faith statute.  Although the Court recognized that a number of lower courts had found that such a remedy existed, the Florida Supreme Court determined that these lower courts misconstrued Florida law.  The Court’s ruling relegated first-party insurance claimants to the statutory bad faith action, which includes bifurcation of contract and bad faith causes of action, rather than permitting a separate claim for breach of the implied warranty of good faith and fair dealing.

The Court also undercut protections to policyholders by negating the right of an insured to assert a claim when insurance companies fail to comply with statutory requirements for font size and type.  The insurer failed to comply with statutory font requirements that were intended to provide notice to policyholders.  The insurance policy’s Hurricane Policy Deductible Notice used the word “windstorm” instead of “hurricane”.  The font size was smaller than required by statute. 

The Court observed that the plain language of the statute did not provide for a private right of action for failure to comply with the font requirements.  Since the statute authorized liability of insurance companies in other sections, the Court determined the legislature made a conscious decision not to provide such a remedy in the section at issue.  The court also considered that the purpose of the provision was to provide notice of the higher deductible rather than to create a private right of action for aggrieved homeowners.

In a final blow to policyholders, the Court construed the policy language “final judgment” in a manner beneficial to the insurance company.  The insured contended that once the trial court entered “final judgment”, the insurance company was obligated to pay the claim within thirty days.  However, the Court rejected this contention and indicated that the thirty day period did not begin to run until all appeals were exhausted.  This ruling permits insurance companies to post a bond to delay a writ of execution until thirty days after any appeal or time to bring an appeal.

If you are a Florida homeowner who cannot get your insurance company to pay your property damage claim, we might be able to help.  My law firm represents policyholders in claims disputes in Miami and throughout Florida.  The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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