This article continues the report of changes to Florida insurers' laws in 2022, and again in 2023.
The original version of Section 624.1551 was effective May 26, 2022. It put limitations on Florida's Bad Faith Statute whenever property insurers are involved:
Notwithstanding any provision of s. 624.155, a claimant must establish that the property insurer breached the insurance contract to prevail in a claim for extracontractual damages under s. 624.155(1)(b).[1]
Until Section 624.1551 was enacted in May, 2022, there was never any requirement in Florida law that any insurance carrier could only be liable for alleged bad faith conduct if a court adjudicated that it also breached its insurance contract, in this case, a property insurance contract. It will also be recalled that in Florida, first-party bad faith is never actionable except under the Bad Faith Statute, Section 624.155.[2] Without the benefit of an action under Section 624.155, there is no room for bad-faith actions or any other claims for extracontractual damages against property insurers in Florida.[3]
In December, 2022, the Florida Legislature amended the recently enacted Section 624.1551 in Special Session, in pertinent part as follows:
Notwithstanding any provision of s. 624.155 to the contrary, in any claim for extracontractual damages under s. 624.155(1)(b), no action shall lie until a named or omnibus insured or a named beneficiary has established through an adverse adjudication by a court of law that the property insurer breached the insurance contract and a final judgment or decree has been rendered against the insurer. Acceptance of an offer of judgment under s. 768.79 or the payment of an appraisal award does not constitute an adverse adjudication under this section.[4]
To be continued .... All these changes to Bad Faith Law are reported and analyzed in 2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 11:17, Fairly or Reasonably Debatable Claims (West Publishing Company, 3d Edition, 2023 Supplements in process).
[1] Fla. Stat. § 624.1551, as amended by 2022 Fla. Sess. Law Serv. Ch. 2022-268, § 6 (S.B. 2) (West).
[2] See, e.g., § 9:14, supra. "There was no such thing as first-party bad faith in Florida until Section 624.155 was enacted." Dennis J. Wall, Consumers Had No Voice: Changes to Property Insurers' Laws in Florida, 45 Ins. Litig. Rptr. 73, 77 (March 3, 2023).
[3] E.g., State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So. 2d 55, 62 (Fla. 1995) ("Florida differs, however, from most jurisdictions given that first-party bad faith actions are actionable only under section 624.155 and not the common law."); Utd. Prop.& Cas. Ins. Co. v. Chernick, 94 So. 3d 646, 647 (Fla. 4th DCA 2012); Gen. Star Indem. Co. v. Atl. Hospitality of Fla., LLC, 93 So. 3d 501, 503 (Fla. 3d DCA 2012).
[4] Fla. Stat. § 624.1551 (emphasis supplied), as amended by 2022 Fla. Sess. Law Serv. Ch. 2022-271, § 2 (S.B. 2-A) (West), effective December 16, 2022.
Please read the disclaimer. This blog article ©2023 Dennis J. Wall. All rights reserved.
Comments