... INSURED PROVES MORE DAMAGES THAN WHAT CARRIER ALREADY PAID.
In Fed. Nat'l Ins. Co. v. Bocinsky, ___ So. 3d ___, No. 5D20-1210, 2021 WL 5969814 (Fla. 5th DCA December 17, 2021; stated NOT FINAL), one of Florida's intermediate courts of appeal reached an interesting conclusion (pun intended) that should be followed by all of Florida's appellate courts.
The policyholder in that case sustained a property loss when a hurricane damaged her home. She made a claim and her carrier refused to pay the claim as it did not meet the amount of the deductible. Thereafter she submitted a claim for more damages, sued the carrier for breach of contract, and sent the carrier a Civil Remedy Notice. The carrier paid the entire amount due under the policy after receiving a Civil Remedy Notice. Federated National, 2021 WL 5969814, at *1.
The policyholder proceeded to trial anyway on the sole issue of interest on an untimely payment, under Florida Statute § 627.70131. Although it went unmentioned in the appellate court's opinion, this statute provided in subsection (5)(a) then, renumbered as subsection (7)(a) now, in pertinent part:
Failure to comply with this subsection constitutes a violation of this [Florida Insurance] code. However, failure to comply with this subsection does not form the sole basis for a private cause of action.
Fla. Stat. § 627.70131(5)(a), renumbered as Fla. Stat. § 627.70131(7)(a).
A jury found that the carrier's payment was untimely under the statute but that the policyholder had not proved that her damages exceeded what the carrier had paid her.
The trial judge entered two judgments on the same verdict. First, the trial judge entered judgment in favor of the carrier because the insured had no provable damages in excess of the policy proceeds, which the carrier had already paid by the time of trial. Second, the trial judge entered judgment in favor of the policyholder and against the carrier on the issue of the carrier paying interest, apparently on the amount of money that it had already paid to the policyholder. Federated National, 2021 WL 5969814, at *1.
The Florida appellate court reversed. The Court followed settled Florida case law that the amount of a claim for purposes of prejudgment interest is fixed when a jury decides the amount, and prejudgment interest is then payable thereafter. Here, the jury concluded that the insured had no damages that exceeded the amount she was already paid so that the carrier owed her nothing in the eyes of the appellate panel. Federated National, 2021 WL 5969814, at *1.
More generally, it may be said that the Court concluded in this case that the statute simply does not require interest to be paid to a policyholder when, as here, the policyholder has not proven that her damages exceeded the amount she was already paid under her policy. See Federated National, 2021 WL 5969814, at *1-*2.
Florida's Section 627.70131 is discussed in 2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 9:27, Insurer's Payment of Undisputed Covered Amounts--Part Payment of Property Insurance Claims (Thomson Reuters West 3d ed., 2022 Supplements in process). Prejudgment interest is the subject of § 13:11, Prejudgment Interest, in Volume 2, id.
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