“Specific” Means “Specific” – Florida’s Bad Faith Statute Must Be Strictly Construed

Jeffrey Michael Cohen | PropertyCasualtyFocus

The purpose of Florida’s “bad faith” statute is to “avoid unnecessary bad faith litigation.” To that end, the statute provides a civil remedy for any person damaged by an insurer’s conduct. However, as a condition precedent to filing suit, the policyholder must provide appropriate information to the Department of Insurance and the insurer by filing and serving a civil remedy notice (CRN). The CRN must specify the policyholder’s complaint and provide the insurer with a 60-day period to “cure” the alleged deficiency. If the insurer corrects the policyholder’s complaint within the 60-day period, no statutory bad faith lawsuit may be pursued. Florida’s common law does not recognize actions for first-party bad faith. Therefore, absent compliance with the statute, a policyholder may not pursue a first-party bad faith lawsuit.

In Julien v. United Property & Casualty Insurance Co., the court, on motion for rehearing, emphasized well-recognized precedent, i.e., “[b]ecause the statute is in derogation of the common law, we strictly construe the statutory requirements.”

In Julien, the policyholder claimed that a fire damaged his home. He filed a CRN alleging claim delay, an unsatisfactory settlement offer, unfair trade practice, failure to properly investigate the claim, and failure to acknowledge and act promptly to communications regarding the claim. The insurer timely responded to the CRN and denied Julien’s contentions. Julien filed suit, and the insurer moved to dismiss with prejudice because the CRN was facially invalid and, therefore, Julien could not state a cause of action for statutory bad faith.

The trial court granted the motion because the CRN did not comply with the statutory mandate to “state with specificity” five expressly enumerated pieces of information:

  1. The statutory provision, including the specific language of the statute, which the insurer allegedly violated.
  2. The facts and circumstances giving rise to the violation.
  3. The name of any individual involved in the violation.
  4. Reference to the specific policy language that is relevant to the violation.
  5. A statement that the notice is given in order to perfect the right to pursue the statutory remedy.

It seems that Julien, perhaps from a concern that one of his complaints would be omitted, “listed every statutory provision and every policy provision available to him as the insured.” He included 14 statutory provisions, followed by 21 sections of the Florida Administrative Code, and referenced “the entire policy.” The dismissal was affirmed by the appellate court, which held that “Julien did not substantially comply with the specificity standard and this was more than a mere technical defect.”

Julien moved for rehearing, rehearing en banc, and certification of a question of great public importance, arguing that in Pin-Pon Corp. v. Landmark American Insurance Co., No. 2:20-cv-14013, 2020 WL 6588379 (S.D. Fla. Nov. 10, 2020), Judge Middlebrooks granted rehearing and withdrew dismissal of a bad faith claim based on deficiencies in the CRN. Judge Middlebrooks had held that the statute’s specificity standard will not bar a statutory bad faith action where the defect in the CRN information was “purely technical,” the policyholder “substantially complied” with the specificity standard, the insurer received “fair notice” of the policyholder’s claim, and the insurer was “not prejudiced.”

As a result of Judge Middlebrooks’ intervening order, the Fourth District Court of Appeal withdrew its first opinion to “avoid confusion,” but it did not change its conclusion that Julien’s CRN was fatally defective. The court held that it was bound to strictly construe the bad faith statute because it was in derogation of common law, that Julien had not substantially complied with the specificity standard of the statute, and that Julien’s reference to substantially all policy sections and the 35 statutory provisions was more than a technical violation of the statute. In short, the policyholder’s contention that the insurer breached the entire policy and all of Florida’s bad faith laws did not meet the statute’s specificity requirement.

Does the Florida Legislature Finally Have a Fix to Construction Defect Law?

Jeffrey S. Wertman | Berger Singerman

Chapter 558 of the Florida Statutes contains a pre-suit notice and opportunity-to-repair process for construction defect claims. The statute was intended to be a more efficient, alternative dispute resolution mechanism involving a property owner providing written notice of claim to the responsible contractor, subcontractor, supplier, or design professional as a precondition for a construction defect lawsuit. Despite numerous amendments to Chapter 558 over the years, the prevailing view is that the statute is ineffective and subject to abuse. Two related bills pending in the Florida Legislature (SB 270 and HB 21) seek to substantially revise the mandatory procedures under Chapter 558.

The legislation seeks to amend three areas of the dispute resolution process: 

  1. The preliminary notice of claim and corresponding requirements allege building defects.
  2. The pre-litigation requirements regarding building code violations.
  3. The notice a prevailing claimant must provide to someone who possesses a security interest in a property when a construction defect settlement or judgment is obtained.

From the perspective of the contractor, subcontractor, supplier, or design professional, the legislation has the potential to reduce fraudulent construction defect claims and prevent costly litigation if the builder agrees to repair the defects. However, the legislation may also increase costs to property owners who cannot bring civil actions and recover damages for Florida Building Code violations that do not meet the threshold of materiality and have to ultimately pay to repair damages themselves. The most significant proposed changes are discussed below.

New Preliminary Requirement to Exhaust Warranty Claims

The legislation requires a property owner to exhaust any warranty claims before serving a notice of claim by first submitting a claim to the warranty provider to determine whether the alleged defect might be covered under a warranty provision. If the warranty provider either denies the claim or does not offer a remedy satisfactory to the claimant within the time limits in the warranty, the claimant may proceed with a notice of claim.

Changes to the Notice of Claim

The legislation will change the content of a notice of claim and require a claimant to:

  1. Describe in specific, not reasonable, detail each alleged construction defect.
  2. Include at least one photograph of the alleged defect or evidence of the defect if it is visible, any repair estimates or expert reports relating to the alleged defect, and a description of the damage or loss that results from the alleged defect if that information is known.
  3. Identify the specific location of each alleged construction defect.
  4. Affirms that he or she has personal knowledge of the alleged construction defect.
  5. Acknowledge that a false statement is subject to penalties of perjury.

Changes to Claims for Violations of the Florida Building Code

Chapter 553, Florida Statutes, provides a civil cause of action for any person or party damaged  by violating the Florida Building Code. The legislation amends the statutory cause of action for building code violations to limit lawsuits to those alleging a “material” violation of the code. A material violation is defined as a violation that exists within a completed building, structure, or facility which may reasonably result, or has resulted, in physical harm to someone or significant damage to the performance of a building or its systems.

Notice to Mortgagee of Assignee

The legislation creates a new section in Chapter 558 that provides if a property owner prevails in a construction defect claim and receives a monetary settlement or judgment and a mortgagee or assignee has a security interest in the property, within 90 days, the owner must notify the holder of the security of:

  1. The specific nature of the defect.
  2. The outcome of the claim, specifying any monetary settlement reached or any judgment awarded.
  3. Any repairs made or plans to repair the property.


The pending legislation to repair Florida’s broken construction defect law is commendable. Still,  it does not address the exploding cost of construction defect litigation, the pre-suit obstacles and impractical hurdles for owners with genuine defect claims, and litigation of negligence and breach of contract lawsuits involving minor defects. We will closely monitor SB 270 and HB 21 as they make their way through the Florida Legislature.

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).