Florida Supreme Court Defines Damages Recoverable by First-Party Insureds in Actions Alleging Breach of Policy

Jeffrey Michael Cohen | PropertyCasualtyFocus

In Citizens Property Insurance Corp. v. Manor House, LLC, the Florida Supreme Court recently answered “no” to the following question certified as a matter of “great public importance”:

In a first-party breach of insurance contract action brought by an insured against its insurer, not involving suit under section 624.155, Florida Statutes, does Florida law allow the insured to recover extra-contractual, consequential damages?

The case involved a dispute over property insurance coverage for apartment buildings that were damaged in 2004 by Hurricane Frances. Citizens, the property insurer, had paid the insured’s initial claim but disputed later claims. The insured filed suit in 2007; however, the court stayed the proceedings and directed the parties to proceed with an appraisal. An appraisal award was ultimately entered and, in January 2010, Citizens paid an additional $5.5 million. The insured then sued Citizens for breach of contract and fraud alleging that Citizens failed to properly adjust the loss, pay all undisputed damages, honor a demand for appraisal, provide appropriate documents, and timely pay the appraisal award, thereby causing a significant loss of rental income.

The trial court entered summary judgment for Citizens, holding that the insurance policy did not provide coverage for lost rental income. Florida’s Fifth District Court of Appeal reversed the judgment that denied the insured’s claim for consequential loss of rents stating that “when an insurer breaches an insurance contract, the insured is entitled to recover more than the pecuniary loss involved in the balance of the payments due under the policy in consequential damages, provided the damages were in contemplation of the parties at the inception of the contract.” The court held that summary judgment was improper because the insured was entitled to prove that lost rental damages were within the contemplation of the parties at the inception of the policy.

Significantly, the insured’s claim might have been pursued in a bad faith action under Florida Statutes section 624.155. However, Citizens is statutorily immune from first-party bad faith claims. Thus, the insured was limited to damages for breach of the policy. In reversing the appellate court and upholding the trial court’s summary judgment, the Supreme Court held:

[E]xtra-contractual, consequential damages are not available in a first-party breach of insurance contract action because the contractual amount due to the insured is the amount owed pursuant to the express terms and conditions of the policy.

The court noted that Florida’s common law precludes extra-contractual claims for breach of a first-party policy. First-party bad faith claims for consequential damages may be pursued only under Florida Statutes section 624.155, which excludes claims against Citizens. Accordingly, absent a viable statutory bad faith claim, damages for breach of a first-party policy are limited to “the contractual amount due to the insured … pursuant to the express terms and conditions of the policy.”

The court’s decision is likely to have an impact outside of the narrow arena involving suits against Citizens. Absent reversal of the Fifth District Court of Appeal’s decision, first-party insureds would have been able to pursue consequential damage claims without following the statutory procedures that provide certain protection for insurers. It is predictable that first-party insureds whose claims are disputed by their insurer will be more aggressive in using Florida Statutes section 624.155 to try to trigger the right to obtain consequential damages. Indeed, first-party insurance claims will be limited to the policy benefits if the statutory procedures are not invoked. Moreover, third-party insureds, who are entitled to pursue both common law and statutory bad faith claims, may be more inclined to invoke the statute, which specifically authorizes recovery of damages that are a “reasonably foreseeable result of a specified violation of this section.”

Florida Adopts Less Stringent Summary Judgment Standard

John A. Rine and Sarah Hock | Lewis Brisbois

On New Year’s Eve, Florida’s Supreme Court issued an amendment to essentially apply the federal summary judgment standard to cases in Florida state courts starting on May 1, 2021. See In Re: Amendments to Florida Rule of Civil Procedure 1.510, No. SC20 1490 (Fla. Dec. 31, 2020) (per curiam). This change brings Florida in line with the majority of states (38).

Summary judgment is easier to obtain under the federal standard. A moving party need only show that the opposing party lacks the evidence to support its case at trial. Under the soon-to-be obsolete Florida standard, however, moving parties had to entirely “disprove the nonmovant’s theory of the case in order to eliminate any issue of fact.” See id. at 3. The nonmoving party could defeat a summary judgment motion by showing that there was a slight doubt on any material fact. See id. at 4-5.

This change is good news for defendants and their insurers. With summary judgment easier to obtain, weak claims can be defended prior to trial. Claims may be resolved more quickly and economically. The threat of summary judgment also gives defendants powerful leverage in settlement discussions. The shift may also reduce the backlog of cases accumulated during the suspension of jury trials over the past summer.

A. Florida’s Previous Summary Judgment Standard

Florida’s summary judgment standard was notoriously restrictive. Summary judgment could not be granted if there was even the slightest dispute on any material fact. See, e.g., Jones v. Dirs. Guild of Am., Inc., 584 So. 2d 1057, 1059 (Fla. 1st DCA 1991). The moving party had to show the facts were so clear that “nothing remain[ed] but questions of law.” Hervey v. Alfonso, 650 So. 2d 644, 646 (Fla. 2d DCA 1995) (citing Humphrys v. Jarrell, 104 So. 2d 404 (Fla. 2d DCA 1958)). This meant summary judgment was nearly impossible to win. Because the nonmoving party could produce the slightest shred of evidence and defeat summary judgment, even meritless claims could reach trial.

B. The Federal Summary Judgment Standard

The federal summary judgment standard was articulated in a trilogy of United States Supreme Court cases in 1986. See Celotex Corp. v. Catrett, 477 U.S. 317 (1986); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986). The Celotex trilogy established that summary judgment is appropriate where the moving party shows that the opposing party does not have enough evidence to establish the elements of its claims. If no reasonable jury could return a verdict for the nonmoving party, summary judgment should be awarded.

C. Florida’s Change

Florida’s shift to this standard was prompted by a certified question from the Fifth District Court of Appeal in Lopez v. Wilsonart, LLC, 275 So. 3d 181 (Fla. 5th DCA 2019). Wilsonart concerned a fatal motor vehicle accident. Jon Lopez rear-ended a freightliner driven by Samuel Rosario. See id. at 831. His estate sued both Mr. Rosario and his employer, Wilsonart, LLC. See id. Dashcam video from Mr. Rosario’s truck showed that he had been driving in the center lane, gradually stopping at a red light, and then hit from behind. See id. at 832. This contradicted the plaintiff’s allegations that Mr. Rosario had suddenly swerved in front of Mr. Lopez. See id. at 833. The trial court granted summary judgment in favor of Rosario and Wilsonart based on the video evidence. See id.

On appeal, the issue was whether the court could grant summary judgment based on the video, or whether it must let the jury weigh the evidence. See id. The Fifth District Court of Appeal held that the latter was true, finding that the trial court had improperly weighed competing evidence on material facts. See id. at 833-834. It reversed the trial court’s decision. See id. Recognizing the strength of video evidence, however, it certified the question for the Florida Supreme Court to determine whether courts could make an exception and grant summary judgment where video evidence completely negates the nonmoving party’s claims. See id. at 834.

The Florida Supreme Court viewed this question as raising a larger issue — whether Florida’s summary judgment standard had an “unreasonable definition of what constitutes a ‘genuine issue’ in need of resolution by a jury.” Wilsonart, LLC v. Lopez, No. SC19-1336, 2020 Fla. LEXIS 2144, at *6-*7 (Dec. 31, 2020). It asked the parties to brief whether Florida should adopt the more permissive federal summary judgment standard. See id. The court was convinced and held that Florida would. See id. at *7. Simultaneously with this ruling, the court released amendments to Florida Rule of Civil Procedure 1.510 to bring the Rule in line with Federal Rule of Civil Procedure 56. In Re: Amendments to Florida Rule of Civil Procedure 1.510, No. SC20-1490 (Fla. Dec. 31, 2020) (per curiam).

D. Effect on Florida Jurisprudence

The Florida Supreme Court explained that the amendments to Rule 1.1510 will have three major impacts:

  1. Most importantly, the requirement that the moving party must negate or otherwise conclusively “disprove the nonmovant’s theory of the case in order to eliminate any issue of fact” is abandoned. See id. at 3. Instead, the movant will prevail if the nonmoving party cannot show that it will have sufficient evidence to establish the elements of its claims. See id. 3–4.
  2. There will be a new definition of what constitutes a genuine issue of material fact. The old Florida definition – the “slightest doubt” – is now replaced with the federal definition – whether a “reasonable jury could return a verdict for the nonmoving party”. See id. at 4–5; see also Jones v. Dirs. Guild of Am., Inc., 584 So. 2d 1057, 1059 (Fla. 1st DCA 1991) (discussing “slightest doubt” definition).
  3. Courts now must recognize the similarity between a motion for directed verdict and a motion for summary judgment. See id. at 2–3. In both contexts, the inquiry will now be identical. The court will consider “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Id.


The importance of the Florida Supreme Court’s adoption of the federal summary judgment standard is tremendous. Skilled defense counsel may be able to dispose of weak or meritless claims more quickly and economically than before.

A Consequential Ruling: Florida Supreme Court Rejects Recovery of Consequential Damages in First-Party Breach of Contract Actions

John David Dickenson, Chad A. Pasternack and Alexandra Schultz | Property Insurance Law Observer

In first-party breach of insurance contract actions, the parties oftentimes dispute whether the policyholder may seek damages that are not explicitly provided for in the policy, with the policyholder arguing such indirect damages flow from the alleged breach of contract. By doing so, policyholders blur the lines between breach of contract actions and bad faith actions. The Florida Supreme Court recently considered this issue in Citizens Property Insurance Corp. v. Manor House, LLC,[1]  and held that “extra-contractual, consequential damages are not available in a first-party breach of insurance contract action because the contractual amount due to the insured is the amount owed pursuant to the express terms and conditions of the insurance policy.”

Manor House arose from a Hurricane Frances insurance claim filed by an owner of apartment buildings. Citizens issued payments totaling approximately $1.9 million. Approximately nineteen months after the loss, Manor House’s public adjuster asked Citizens to reopen the claim. After reopening the claim, Citizens made additional payments and continued its adjustment. Several months after reopening the claim, Citizens’ field adjuster informally estimated the actual cash value of the loss at approximately $5.5 million and the replacement cost value at $6.4 million.

At around the same time, there was a change in ownership at Manor House. The new owner demanded Citizens pay the “undisputed” amount of $6.4 million and demanded appraisal. Citizens sought documentation regarding the new owner’s authority to act on behalf of Manor House, as well as other documentation such as invoices and contracts for work in progress. Manor House then filed suit seeking, amongst other things, extra-contractual damages related to rental income that it allegedly lost due to delay in repairing the apartment complex based on Citizens’ “procrastination in adjusting and paying the Manor House claims.”[2]

The trial court granted Citizens’ motion for partial summary judgment regarding the lost rental income. On appeal, the Fifth District reversed, concluding that “the trial court’s ruling ignores the more general proposition that ‘the injured party in a breach of contract action is entitled to recover monetary damaged that will put it in the same position it would have been had the other party not breached the contract.”[3] The Fifth District concluded that consequential damages are available in breach of insurance contract actions, provided that the damages “were in contemplation of the parties at the inception of the contract” and can be proven “with reasonable certainty.”[4]

The Florida Supreme Court reversed the Fifth District’s decision, agreeing with the trial court that the parties must rely on the express terms and conditions of the insurance policy, which, in this case, did not provide for lost rental income coverage. The Court reiterated that under Florida law, courts are to give effect to the intent of the parties as expressed by the policy language, rather than the “reasonable expectations” of the insured. Accordingly, “extra-contractual consequential damages are not available in a first-party breach of insurance contract action because the contractual amount due to the insured is the amount owed pursuant to the express terms and conditions of the policy.”[5] For a policyholder to obtain extra-contractual consequential damages, it must pursue and prove bad faith under Florida Statutes § 624.155.

Manor House affirms a simple principle: the terms and conditions of the insurance policy govern disputes over coverage.  In a first-party property breach of contract case, the only remedies “contemplated” by the parties are those set forth in the policy’s express terms.

[1] Citizens Prop. Ins. Corp. v. Manor House, LLC, No. SC19-1394, 2021 WL 208455 (Fla. Jan. 21, 2021).

[2] Id. at *2.

[3] Manor House, LLC v. Citizens Prop. Ins. Corp., 277 So. 3d 658, 661 (Fla. 5th DCA 2019).

[4] Id.

[5] Manor House, 2021 WL 208455, at *2 (Fla. Jan. 21, 2021).

10 Steps for Out-of-State Contractors to Get Licensed in Florida Without an Exam

Jason S. Lambert | Dinsmore

In July 2020, Florida changed its contractor licensing statute to make it easier for contractors who have been licensed in other states for at least 10 years to obtain a Florida contractor license without having to take a licensing exam. While Florida has not entered into any formal reciprocity agreements with other states, we do finally have guidance on exactly how to apply for a Florida contractor license using an existing license from another state. The good news is: It’s a much simpler process than anticipated and does not require a licensing exam.

The new 10-year rule applies to nearly every type of contractor license in Florida, including residential, builder, general, HVAC, plumbing, pool, electrical, and specialty contractors. Out-of-state license holders must meet the following requirements to become a licensed Florida contractor:

  1. Have been licensed in their state for 10 years in the same category that they will be applying for in Florida.
  2. The existing license must be active or have been active within the last two years.
  3. For certified general, building, residential, and roofing contractors, take a two-hour Department of Business and Professional Regulation-approved (DBPR) course on the Florida Building Code, including information on wind mitigation techniques.
  4. Pay a filing fee to the Florida DBPR.
  5. Obtain electronic fingerprints from an Florida Department of Law Enforcement-approved vendor.
  6. Submit a personal credit report (NOTE: If your credit score is below 660, you will need to obtain a contractor’s bond in the amount of $10,000-$20,000, depending on license type. This can be cut in half by taking a 14-hour financial responsibility course).
  7. If you plan to operate in Florida through a business entity, you must also submit a credit report for your business.
  8. Pass a background check.
  9. Have commercial general liability insurance with limits ranging from $100,000 to $300,000, depending on license type.
  10. Obtain workers’ compensation insurance or be exempt.

It appears that Florida is now fully open for business for licensed contractors in other states to obtain a license and begin work in Florida. 

Read the Property Insurance Policy to be Sure You are Complying with Post Loss Obligations

David Adelstein | Florida Construction Legal Updates

I have discussed this before in prior postings, but it is worth repeating.  It is imperative for an insured to comply with post loss obligations in a property insurance policy.  Not doing so gives the insurer the argument that its insured forfeited coverage under the policy.  Naturally, this is never what an insured wants as this is contrary to submitting an insurance claim to begin with.  To avoid this situation, an insured should consult with counsel and read the policy including endorsements issued to the policy to be sure that post loss obligations are complied with and, if they are not, there is a basis supported by case law.

In a recent case, Goldberg v. Universal Property and Casualty Ins. Co., 45 Fla. L. Weekly D2118b (Fla. 4th DCA 2020), the property insurance policy for hurricanes and windstorms contained the following through an endorsement issued to the policy:

You must give notice of a claim, a supplemental claim, or reopened claim for loss or damage caused by the peril of windstorm or hurricane, with us in accordance with the terms of this policy and within three years after the hurricane first made landfall or the windstorm caused the covered damage. For purposes of this Section, the term “supplemental claim” or “reopened claim” means any additional claim for recovery from us for losses from the same hurricane or windstorm which we have previously adjusted pursuant to the initial claim. . . .

The insured submitted a claim for hurricane damage.  The insurer sent an adjuster that adjusted the loss at $12,960.80, and after depreciation, reflected an actual cash value of $9,158.43.  The insurer paid the insured $8,158.43 after deducting the insured’s deductible.  The insurer also notified the insured that the policy did include a replacement cost value and once the work was performed and costs verified it will evaluate for eligibility for payment of the depreciation.

Later, the insured notified the insurer he received an estimate for higher than the proceeds received.  The insurer asked the insured to forward the estimate but the insured did not do so.  The insured then filed a lawsuit against the insurer.  However, prior to filing a lawsuit the insured did not submit a supplemental claim to the insurer.   An issue was whether the insured failed to satisfy post loss obligations in the policy by not submitting a supplemental claim prior to filing suit.

The Fourth District Court of Appeal held that the insured did NOT comply with his post loss obligations because he did not submit a supplemental claim to the insurer for damages he sought in excess of what the insurer paid:

Here, the record shows that [the property insurer] “previously adjusted” [the insured’s] initial claim after he filed the Property Loss Notice in September 2017, and then promptly paid $8,158.43 on that claim. After [the property insurer] had “previously adjusted” the initial claim, any request by [the insured] for additional payment for losses from the same hurricane fell within the meaning of an “additional claim for recovery . . . for losses from the same hurricane” which [the property insurer] had “previously adjusted.” Thus, under the terms of the policy, [the insured] was required to notify [the property insurer] that he claimed further damages from Hurricane Irma.

Goldberg, supra.

The point is that had the insured simply provided a supplemental claim per his policy, even estimates he received for the remedial work, the end result would likely have been different because he would have satisfied a post loss obligation.  This is important because his claim was clearly covered as the insurer would not have paid proceeds based off its adjustment if it did not believe the claim was a covered claim.  But, by not complying with the terms of the policy, the insured was deprived of additional amounts relative to the loss.