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    Florida Supreme Court Answers Certified Questions from Eleventh Circuit In Anticipated Hurricane Related Bad Faith Opinion

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    On May 31, 2012, in an anticipated opinion, the Florida Supreme Court resolved five certified questions from the United States Court Appeals for the Eleventh Circuit in a case styled Chalfonte Condominium Apartment Association, Inc. v. QBE Insurance Corporation, Case. No. SC09-441.  The case involves Hurricane Wilma damage sustained to Boca Raton, Florida condominium property owned by the insured.  Following the investigation and adjustment of its claim, the insured filed a declaratory judgment action seeking damages for breach of contract, breach of the breach of the implied warranty of good faith and fair dealing, and violation of the deductible disclosure provisions of § 627.701(4)(a), Florida Statutes.  The case proceeded to trial against the insurer resulting in a judgment, which forms the basis of the pending appeal.

    In its opinion, the Court held that Florida does not recognize a cause of action for “breach of the implied warranty of good faith and fair dealing” by an insured against its insurer.  We previously reported on the viability of that purported cause of action in Florida here. Rather, first party bad faith claims must be brought pursuant to § 624.155, Florida Statutes, Florida’s civil remedy statute.  In so holding, the Court also declined the insured’s attempt to have the Court reconsider the application of the doctrine of “reasonable expectations” in the context of insurance contracts.  Instead, the Court reaffirmed its longstanding position that the terms of an insurance policy define the scope coverage, not the insured’s reasonable expectations.

    Moreover, after examining the legislative intent of § 627.701(4)(a) the Court also held that an insured may not bring a claim for failure to comply with the language and type-size requirements established in that section.  Nor does an insurer’s failure to comply with that section render a non-compliant policy provision void or invalid as the statute itself does not provide for such a penalty.  Finally, the Court held that an insured’s promise to pay benefits upon “entry of final judgment” does not waive the insurer’s procedural right to post a bond under Florida law pending an appeal of a lower court decision.  After answering the certified questions, the Florida Supreme Court returned the case to the Eleventh Circuit Court of Appeals for further proceedings.

    A copy of the decision is here.

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