This is the continuation of our two-part blog post exploring the duty of policyholders to provide timely notice of a loss in the context of potential obstacles to discovering a loss. If you have rental properties as investments, for example, you might not know your property has been damaged without the cooperation of the tenant. Further, some damage does not exhibit immediate physical manifestations, which also can limit an insured’s ability to provide timely notice of a loss. Part 1 of this blog reviewed the facts of a recent 4th District Court of Appeals case involving these types of facts that was decided in favor of the insured. In Part 2 of this blog post, we consider the 4th District Court’s reasoning and how it differs from the 3rd District Court under similar facts. We also consider how subtle differences in the facts and circumstances might lead to a different result.
Analysis of Reasonable Discovery Issue on Notice Requirement (Florida 4th District Court of Appeals)
The appellate court noted that evaluation of a late notice claim involves a two-step process. The first step involves determining whether notice was tardy. The second step involves determining if the lack of timely notice caused prejudice to the insurer. The court noted that it is “well settled” that notice requirements in homeowners insurance policies that use terminology like “prompt,” “immediate,” “as soon as practical” and similar phrases do not necessitate instantaneous notice. The court pointed out that Florida courts have construed such notice requirements to be akin to meaning “with reasonable dispatch” or “within a reasonable period of time in view of all of the facts and circumstances.”
However, the court also observed that policyholders cannot engage in acts of intentional ignorance or neglect in discovering damage that give rise to the need to provide notice of a claim. Notice is required after occurrences that would put a reasonably prudent policyholder on notice of the possibility of damage to the covered property. The issue of whether notice was timely will normally be an issue of fact to be determined by a jury according to the court. However, the issue can be resolved through summary judgment as a matter of law by the judge if there is no basis for dispute when all the evidence is construed in favor of the insured who is opposing summary judgment. The court noted that granting summary judgment would be appropriate, for example, if the insured knew the property was damaged in the hurricane but waited three years to notify the insurance company.
However, the 4th District Court pointed out that the condo damage was not apparent to the insured or reported to the insured by any of the insured’s agents or the tenant until years after the hurricane despite multiple inspections of the premises. However, the hurricane alone was not enough to trigger the notice requirement because there was no apparent damage from the hurricane. Under all the circumstances, the court concluded that sufficient facts existed for a reasonable jury to conclude that notice was timely.
Not All Florida Courts Agree on Whether Delayed Notice Is Excused by Lack of Discovery of Loss (4th v. 3rd Districts)
It is important to note that the court indicated that a slight difference in the facts might have resulted in an unfavorable decision against the insured. Triggering of the notice requirement was not contingent on the insured discovering the full extent of the damage caused by the hurricane. Any evidence that damage might have been caused could be sufficient to start the clock running on the deadline for providing “reasonably” timely notice. Further, triggering of the prompt notice deadline also was not contingent on the insured discovering facts establishing that the loss should be covered. The hurricane accompanied by some report of physical evidence of minor damage might have been sufficient. The fact that the property was occupied by a tenant which limited the opportunity for inspection also was relevant. If the tenant had failed to report apparent damage, it is unclear what the outcome would have been if the insured did not have anyone else inspect the property periodically or after the hurricane.
Further, the insured will not necessarily prevail in this case because a trial court jury will have to consider the evidence and determine whether prompt notice was provided on the basis of the unique facts and circumstances of the case. The jury also must consider whether Citizens suffered prejudice because of the delay in providing notice.
Policyholders also should be aware that the 4th DCA for Florida reached a different result. In Soronson v. State Farm Florida Ins. Co., the court found that evaluation of timely notice was based on the date of loss not the date of reasonable discovery. However, this decision was distinguished by the 3rd District based on policy language that tied notice to a “fixed time from the date of loss.” The policy language in Soronson provided that “[a]fter a loss . . . [the insureds] shall . . . give immediate notice to [the insurer] and “submit to [the insurer], within 60 days after the loss, [the insureds’] signed, sworn proof of loss.”
Admittedly, the distinction between the courts on delays in providing “prompt” notice when the insured is not aware of the loss and the circumstances do not give the insured a reasonable basis to suspect a loss is hazy at best. This is why an insured should provide notice to an insurer as soon as possible and conduct reasonable periodic inspections of properties following incidents that might cause damage.
If your investment property or home has been damaged, you should seek legal advice and notify your insurer of the loss as soon as possible. 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.