FLORIDA INSURANCE LAW CHANGES: THE 2023 REPORT, continued ....

 

(Shepard's/McGraw-Hill, c. 1985)

This article continues the review of Florida Insurance Law changes made during the 2023 Florida Legislature, so far, that began here on November 20, 2023.

 

1. REPEAL OF SO-CALLED "ONE-WAY" ATTORNEY'S FEES STATUTES.

Section 627.428 of the Florida Statutes basically allowed prevailing policyholders and other prevailing insureds to recover their attorney's fees and costs from their insurance carriers that forced them to prove their entitlement to insurance coverage.[1]  Section 626.9373 of the Florida Statutes similarly allowed the recovery of fees and costs in lawsuits involving insurance coverage issues under policies issued by surplus lines carriers and on which the insureds prevailed.[2] 

            The 2023 Florida Legislature repealed both of these statutes.   There is no legislative history extant as yet behind the repeal, but when the insurance industry issued a call for the repeal of these statutes, the industry justified their repeal by calling them "one-way" attorney's fees statutes.

2. AFTER REPEALING TWO "ONE-WAY" ATTORNEY'S FEES STATUTES, THE 2023 FLORIDA LEGISLATURE ADDED ONE.

New Section 86.121 makes available what the insurance industry referred to as "one-way attorney fee statutes" while advocating for the repeal of Sections 627.428 and 626.9373, discussed above.  The newly available attorney's fees can only be awarded "to the named insured, omnibus insured, or named beneficiary under a policy issued by the insurer, " and only "upon rendition of a declaratory judgment in favor of the named insured, omnibus insured, or named beneficiary,"[3] and only in "an action brought for declaratory relief in state or federal court to determine insurance coverage after the insurer has made a total coverage denial of a claim."^[4] Here is another condition on the availability of attorney's fees under this new statute:  They are only available in declaratory relief actions brought under Chapter 86, the Florida Declaratory Judgment Act:  "Such fees are limited to those incurred in the action brought under this chapter for declaratory relief to determine coverage of insurance issued under the Florida Insurance Code."^[5]

 

3. WHEN TENDER BECOMES IMMUNITY.

Liability insurance carriers were given immunity in a new subsection 624.155(4).[6]   The new addition to Florida's Bad Faith Statute conferred immunity upon "the insurer" in "[a]n action for bad faith involving a liability insurance claim," if the insurer "tenders the lesser" of its policy limits or the amount demanded by the claimant.  The immunity applies if the tender takes place "within 90 days after receiving actual notice of a claim," and the claim or the actual notice (it is not clear which, but apparently an unsupported demand does not qualify) "is accompanied by sufficient evidence to support the amount of the claim."

4. THE FLORIDA LEGISLATURE ADOPTS A LEGAL DEFENSE OF "COMPARATIVE BAD FAITH." 

In 2023, the Florida Legislature enacted a "duty to act in good faith" in matters involving information, demands, setting deadlines, and "in attempting to settle the claim[.]"^[7]  Although the new legislation did not make these newly made legal duties actionable, the 2023 Florida Legislature made these new "good faith duties" for "[t]he insured, claimant, and representative of the insured or claimant" to apply  in "any bad faith action[.]"^[8]

             The focus of these new statutory provisions can only be understood in the context of Florida Insurance Bad Faith Law which has always focused on the extracontractual or bad faith exposure of the insurance company in the face of all such conduct.

            The central issue in insurance bad faith failure-to-settle cases in Florida, as elsewhere, has always been whether the insurance carrier has attempted in good faith to settle claims, when under all the circumstances of the claim, the carrier could and should have done so, had the carrier acted fairly and honestly toward the insured and with due regard for her or his interests.^[9]  That context explains why the 2023 Florida Legislature fashioned a legal duty that makes certain conduct subject to a determination of whether that conduct is legally taken in good faith, namely, in furnishing "information regarding the claim, in making demands of the insurer, in setting deadlines, and in attempting to settle the claim."[10]  Under the language of the new subsection, violation of a new legal duty is now a comparative defense to the insurer's own bad faith. 

5. & 6. TWO MORE, BUT THEY'RE NOT REALLY WHAT YOU MIGHT CALL "INSURANCE" STATUTES, ALTHOUGH THEY DO HAVE AN IMPACT ON INSURERS.
6. The 2023 Florida Legislature shortened the statute of limitations that applies to an action founded on negligence to two from four years.[11]
7. The 2023  Florida Legislature also rewrote the Florida Comparative Fault Statute, Section 768.81.  It limited  comparative negligence to cases involving 50 percent or less of the plaintiff's adjudicated "fault," and it reintroduced contributory negligence as a complete defense in Florida negligence litigation where the person suing is found to have more fault than 50 percent for his or her own harm.[12]

These are the most significant changes wrought by the 2023 Florida Legislature to Florida Insurance Law, and this review has included a couple of other significant changes as well.  More detailed reviews of all these changes can be found in Volumes 1 and 2 of DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Company 3d Edition and 2023 Supplements), especially in Chapters 3, 5, 9, and 11.  Many of the different and voluminous 2023 Florida Insurance Law changes are also brought into the sunlight in the various forthcoming editions of CATASTROPHE CLAIMS:  INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS, and Insurance Litigation Reporter.

Please read the disclaimer.  This blog article ©2023 Dennis J. Wall.  All rights reserved.

 

[1]Fla. Stat. § 627.428, repealed by 2023 Fla. Sess. Law Serv. Ch. 2023-15 § 11 (C.S.C.S.H.B. 837) (West).

[2] Fla. Stat. § 627.9373, repealed by 2023 Fla. Sess. Law Serv. Ch. 2023-15 § 10 (C.S.C.S.H.B. 837) (West).

[3] Fla. Stat. Ann. 86.121(1)(b).

[4] Section 86.121(1). 

[5] Section 86.121(1)(b).

[6] Fla. Stat. Ann. § 624.155(4) (West), enacted by 2023 Fla. Sess. Law Serv. Ch. 2023-15, § 4 (C.S.C.S.H.B. 837) (West).

[7] Fla. Stat. Ann. § 624.155(5)(b)1.

[8] Section 624.155(5)(b)1.

[9] This is a summary of the express language of the Bad Faith Statute, which remains in place even after the newly enacted Subsection (5).  It is also an application of the express language of the unchanged Florida Standard Jury Instruction 404.4, titled "Insurer's Bad Faith (Failure to Settle)."

[10] Fla. Stat. Ann. § 624.155(5)(b)1, enacted by 2023 Fla. Sess. Law Serv. Ch. 2023-15, § 4 (C.S.C.S.H.B. 837) (West).

[11] Fla. Stat. Ann. 95.11(4)(a) (West), as amended by 2023 Fla. Sess. Law Serv. Ch. 2023-15 § 3 (C.S.C.S.H.B. 837) (West).

[12] Fla. Stat. § 768.81(2) & (6) (West), as amended by 2023 Fla. Sess. Law Serv. Ch. 2023-15 § 9 (C.S.C.S.H.B. 837) (West).