Justia Insurance Law Opinion Summaries

Based on unethical actions during the 2004-2005 hurricane season, the Legislature enacted Section 626.854(6), Florida Statutes: A public adjuster may not directly or indirectly through any other person or entity initiate contact or engage in face-to-face or telephonic solicitation or enter into a contract with any insured or claimant under an insurance policy until at least 48 hours after the occurrence of an event that may be the subject of a claim under the insurance policy unless contact is initiated by the insured or claimant. An adjuster sued. The trial court upheld the law, accepting an interpretation that it prohibited only in-person or telephonic communication, that it primarily regulates conduct, not speech, and furthers an important governmental interest. The appeals court reversed, finding that the section regulates commercial speech and that the Department failed to demonstrate that prohibiting property owners from receiving information from public adjusters for 48 hours is justified by the possibility that some public adjuster may unduly pressure traumatized victims or otherwise engage in unethical behavior. The Florida Supreme Court affirmed, holding that the statute unconstitutionally restricts commercial speech and was not narrowly tailored to serve interests in ensuring ethical conduct by public adjusters and protecting homeowners. View "Atwater v. Kortum" on Justia Law

This case arose when Mercury, an insurer, offered a settlement proposal to the hospital and the hospital refused the settlement offer. At issue was the constitutionality of the Alachua County Lien Law, chapter 88-539, Laws of Florida (Lien Law), and the Alachua County Hospital Lien Ordinance, Alachua County Code sections 262.20-262.25 (Ordinance), both of which established certain lien rights for charitable hospitals in Alachua County. The court held that the Lien Law was unconstitutional under article III, section 11(a)(9) of the Florida Constitution. The court held, however, that the Ordinance was not unconstitutional and that the First District should have upheld the trial court's judgment on the basis of the Ordinance. In addressing a cross-appeal presented by Mercury, the court held that the trial court properly limited the hospital's damages and properly awarded it attorney fees.

This action arose from an appeal to the Eleventh Circuit wherein plaintiff appealed the dismissal of insurance coverage claims under section 627.701(4)(a), Florida Statutes, and the denial of a motion to enforce execution of the judgment, and defendant cross-appealed the denial of motions for a new trial and for judgment as a matter of law. In answering five certified questions, the court concluded that, under Florida law: (1) first-party claims were actually statutory bad-faith claims that must be brought under section 624.155; (2) an insured could not bring a claim against an insurer for failure to comply with the language and type-size requirements established by section 627.701(4)(a); (3) an insurer's failure to comply with the language and type-size requirements established in section 627.701(4)(a) did not render a noncompliant hurricane deductible provision in an insurance policy void and unenforceable as the Legislature had not provided for this penalty; and (4) a contractual provision mandating payment of benefits upon "entry of a final judgment" did not waive the insurer's procedural right to post a bond and stay the execution of a money judgment pending resolution of appeal.

This action stemmed from an appeal to the Eleventh Circuit wherein plaintiff appealed the dismissal of claims under section 627.701(4)(a), Florida Statutes, and the denial of a motion to enforce execution of the judgment, and defendant appealed the denial of motions for a new trial and for judgment as a matter of law. Plaintiff had filed a claim with defendant, its property insurer, pursuant to an insurance policy but was dissatisfied with defendant's investigation and processing of its claim. Based on the facts and analysis, the court answered the first, third, fourth, and fifth questions certified by the Eleventh Circuit in the negative. In doing so, the court did not reach the second certified question. The court concluded that under Florida law: (1) first-party claims were actually statutory bad-faith claims that must be brought under section 624.155; (2) an insured could not bring a claim against an insurer for failure to comply with the language and type-size requirements established by section 627.701(4)(a); (3) an insurer's failure to comply with the language and type-size requirements established in section 627.701(4)(a) did not render a noncompliant hurricane deductible provision in an insurance policy void and unenforceable as the Legislature had not provided for this penalty; and (4) a contractual provision mandating payment of benefits upon "entry of a final judgment" did not waive the insurer's procedural right to post a bond and stay the execution of a money judgment pending resolution of appeal.

Michael Warfel filed a sinkhole claim with Universal Insurance Company, with whom he had an all-risks homeowners insurance policy that covered sinkhole claims. Universal relied on a report by an outside firm, which determined that the damage was caused by factors that were excluded from coverage under the policy, to deny the claim. Warfel subsequently filed an action against Universal for breach of contract, seeking the recovery of insurance benefits for the loss caused by damage to his home. The trial court granted Universal's motion to apply Fla. Stat. 90.304 to the burden shifting presumption articulated in Fla. Stat. 627.7073(1)(c). The jury returned a verdict in favor of Universal. The court of appeal reversed, holding that the trial court misapplied the presumption at work in this case and gave the jury an instruction improperly shifting the burden of proof. The Supreme Court affirmed, holding that the language of section 627.7073(1)(c) does not create a presumption affecting the burden of proof under section 90.304 nor does the language create a presumption affecting the burden of producing evidence under Fla. Stat. 90.303.

This case arose when petitioner's home was damaged in a hurricane and Florida Preferred was the insurer of the home. After petitioner sued Florida Preferred over a dispute regarding the covered loss and Florida Preferred subsequently became insolvent, petitioner filed a motion to substitute FIGA as the defendant. At issue was whether FIGA could be required to pay petitioner's attorney's fees and costs incurred in the litigation with Florida Preferred. Because petitioner's attorney's fee award pursuant to section 627.428(1), Florida Statutes, was not within the coverage of her insurance policy, it was not a covered claim under section 631.54(3), Florida Statutes, that FIGA must pay. Therefore, the court approved the decision of the Second District.

Petitioners sought review of the decision of the First District Court of Appeal in Geico Indemnity Co. v. Shazier on the basis that it conflicted with the decisions of the court in Susco Car Rental System of Florida v. Leonard and Roth v. Old Republic Insurance Co. In Shazier, the district court resolved a question regarding an insurer's duty to defend and indemnify its insured in favor of the insurer. In doing so, the First District relied on a very constricted definition of "consent" and employed an unauthorized driver provision in contradiction of the court's clear precedent to the contrary under Florida's dangerous instrumentality doctrine to defeat coverage. Accordingly, the court quashed the First District's decision and directed that judgment be entered in favor of the insureds and injured parties.

State Farm petitioned for review of the Third District's determination that the household exclusion in its policy issued to respondents was ambiguous and therefore could not be enforced to eliminate coverage for bodily injuries suffered by members of the household of a permissive-driver insured. The court held that the plain language of the household exclusion precluded coverage for bodily injuries suffered by members of the household of a permissive-driver insured, such as the parents in this case. Therefore, the court quashed the Third District's decision, approved Linehan v. Alkhabbaz, and remanded for further proceedings.

This case arose from certain hurricane damage claims made by respondent under a 2004 insurance policy issued by respondent's original insurer. When the original insurer became insolvent, the Florida Insurance Guaranty Association (FIGA) then became obligated to respond to certain claims made under that insurance policy. At issue was the proper test to be utilized by a court when determining whether a statute could be applied retroactively, in this case to a contract of insurance. The court held that the court's precedents both before and after the Fourth District's decision required the court to engage in a two-pronged inquiry to determine if the 2005 amendments to section 627.7016, Fla. Stat., were to be applied retroactively. Thus, the Fourth District misapplied this precedent when it omitted the first inquiry into whether the Legislature clearly expressed an intent that the statute be applied retroactively and moved directly to the second inquiry, whether retroactive application would be constitutional. For this reason, and because there was no clear evidence of legislative intent for retroactivity, the court quashed the decision of the Fourth District to the extent it was inconsistent with the opinion and remanded for further proceedings.

Respondent Enterprise Leasing Company leased a motor vehicle to Elizabeth Price for less than a year. Her son crashed the leased vehicle into a vehicle owned by Petitioner Rafael Vargas. Vargas filed suit against Price and Enterprise. The only count of the complaint directed at Enterprise claimed that the company was vicariously liable as the owner of the vehicle, pursuant to state law section 324.021(9)(b)2. Vargas did not contend that Enterprise was negligent, that its lease to Price was improper, or that it was in any way at fault for the accident. Enterprise filed an Answer and affirmative defenses, asserting that pursuant to 49 U.S.C. §30106, or the "Graves Amendment," it had no liability. The circuit court granted Enterprise's motion for summary judgment, ruling that the Graves Amendment preempted state law, holding that the state law was a vicarious liability provision and not a financial responsibility one. The court entered a final judgment consistent with Enterprise's consent to judgment, and Vargas appealed. The appellate court affirmed the lower court's decision and held one issue for review by the Supreme Court: whether the Graves Amendment as enacted by Congress preempted state law involving short term leases of motor vehicles. Florida had eliminated vicarious liability for a certain category of owner/lessors; Congress, through the Graves Amendment, sought to eliminate vicarious liability for that category of owners/lessors in which the state law left exposed to liability. On analysis, the Supreme Court found that the savings clause of the Graves Amendment does not supersede state laws that impose financial responsibility on the owner of a vehicle or that impose liability on businesses who rent or lease vehicles for failure to meet financial responsibility requirements under state law, and affirmed the decision of the circuit court.