Justia Florida Supreme Court Opinion SummariesArticles Posted in Insurance Law
Sebo v. American Home Assurance Co.
In 2005, John Sebo purchased a home. American Home Assurance Company (AHAC) provided homeowners insurance as of the date of the purchase. It later became clear that the house suffered from major design and construction defects when water began to intrude during rainstorms. Hurricane Wilma further damaged the residence. AHAC denied coverage for most of the claimed losses. Sebo sued AHAC seeking a declaration that the policy provided coverage for his damages. The jury found in favor of Sebo, and the trial court entered judgment against AHAC. The Second District Court of Appeal reversed and remanded for a new trial, concluding that coverage did not exist under Sebo’s all-risk policy when multiple perils combined to create a loss and at least one of the perils was excluded by the terms of the policy. The Supreme Court quashed the Second District’s opinion, holding that the plain language of the policy did not preclude recovery in this case. View "Sebo v. American Home Assurance Co." on Justia Law
de la Fuente v. Florida Insurance Guaranty Ass’n
Insureds, who owned a policy from Insurer, alleged that Insurer failed to pay them for damage to their home from sinkhole loss, thus breaching the terms of the insurance policy. When Insurer became insolvent, Florida Insurance Guaranty Association (FIGA) was activated to handle the “covered claims.” The circuit court ordered appraisal, and the appraisers determined the amount of loss to be $130,600. FIGA objected to the confirmation of the appraisal award, arguing that the statutory definition of “covered claim” in effect when Insurer was adjudicated insolvent should govern any payments made on the claim, thus prohibiting any direct payment to Insureds for their sinkhole loss. The circuit court confirmed the appraisal award and entered judgment in favor of Insureds in the amount of $130,600, concluding that Insureds’ rights to recover against FIGA for sinkhole loss were established when Insurer issued the insurance policy. The Second District Court of Appeal reversed. The Supreme Court affirmed, holding (1) the definition of “covered claim” in effect on the date that Insurer was adjudicated to be insolvent governed the scope of FIGA’s liability to Insureds for the sinkhole loss at their property; and (2) Insureds were precluded from obtaining an appraisal award for their sinkhole loss directly from FIGA under the terms of the policy. View "de la Fuente v. Florida Insurance Guaranty Ass’n" on Justia Law
Johnson v. Omega Ins. Co.
Johnson was covered under a homeowner’s insurance policy issued by Omega when she filed a claim to recover damages resulting from conditions which she believed to be sinkhole activity. After an initial sinkhole investigation determining that there was no sinkhole activity present on Johnson’s property, Omega denied Johnson’s claim. Johnson filed suit against Omega for breach of contract. In response, Omega hired another expert to perform an additional evaluation. The expert agreed that sinkhole activity was present on Johnson’s property. Omega accepted the evaluation report and provided payment for the damages. At issue before the trial court was whether Johnson was entitled to attorney’s fees. The trial court concluded that Omega’s agreement to pay money to Johnson amounted to a confession of judgment and awarded Johnson attorney’s fees under Fla. Stat. 627.428. The Fifth District Court of Appeal reversed, concluding that Omega did not act wrongfully or in bad faith, and therefore, section 627.428 and the confession of judgment doctrine did not apply. The Supreme Court quashed the decision below, holding that a recovery for attorney’s fees under section 627.428 requires an incorrect denial of benefits by the insurance company, not a bad faith denial. View "Johnson v. Omega Ins. Co." on Justia Law
Wells Fargo Bank, N.A. v. Pruco Life Ins. Co.
This case involved a dispute over the validity of three stranger-originated life insurance (STOLI) policies. The United States Court of Appeals for the Eleventh Circuit certified two questions of Florida law to the Supreme Court that were determinative of the case and for which there appeared to be no controlling precedent. The certified questions involved two Florida statutes: Fla. Stat. 627.404(1), requiring that an insurable interest exist at the inception of each life insurance policy, and Fla. Stat. 627.455, providing that an insurance policy is incontestable two years after its issuance. STOLI transactions offer an insured (often an elderly one) “free” or “risk-free” insurance in exchange for transferring the policy to the investor after the two-year incontestability period has expired. The Supreme Court answered that a party cannot challenge the validity of a life insurance policy after the two-year contestability period established by section 627.455 because it is created through a STOLI scheme. View "Wells Fargo Bank, N.A. v. Pruco Life Ins. Co." on Justia Law
Fridman v. Safeco Ins. Co. of Ill.
Petitioner was injured in an automobile accident with an underinsured motorist. Petitioner filed a claim with his insurer (Insurer) for the limits of his uninsured/underinsured motorist (UM) policy of $50,000. After Insurer refused to pay, Petitioner filed a complaint against Insurer to determine liability under the UM policy and the full extent of his damages. Prior to trial, Insurer tendered a check to Petitioner for $50,000 and filed a confession of judgment for that amount. Petitioner opposed the entry of a confessed judgment, arguing that a jury verdict would determine the upper limits of Insurer’s potential liability under a future bad faith claim. The trial court denied Insurer’s motion to confess judgment. After a trial, the jury set Petitioner’s damages at $1 million. The court of appeal vacated the jury’s verdict, concluding that after Insurer confessed judgment in the amount of $50,000, Petitioner’s UM action became moot. The Supreme Court quashed the court of appeal’s decision, holding (1) an insured is entitled to a determination of liability and the full extent of his damages in a UM action before filing a first-party bad faith action; and (2) that determination of damages is generally binding, as an element of damages, in a subsequent first-party bad faith action. Remanded. View "Fridman v. Safeco Ins. Co. of Ill." on Justia Law
Joerg v. State Farm Mut. Auto. Ins. Co.
Luke Joerg (“Luke”) was a developmentally disabled adult who had lived with his parents his entire life and had never worked. Luke was struck by a car in 2007. John Joerg (“Joerg”), Luke’s father, filed an action against State Farm Mutual Automobile Insurance Company, Joerg’s uninsured motorist carrier. Joerg filed a motion in limine to exclude evidence of any collateral source benefits to which Luke was entitled, including discounted benefits under Medicare and Medicaid. The trial court precluded State Farm from introducing evidence of Luke’s future Medicare or Medicaid benefits. The jury awarded a total of $1,491,875 in damages, including $469,076 for future medical expenses. The Second District Court of Appeal reversed the award for future damages, concluding that Luke’s Medicare benefits should not have been excluded by the collateral source rule. The Supreme Court quashed the decision below, holding that the trial court properly excluded evidence of Luke’s eligibility for future benefits from Medicare, Medicaid, and other social legislation as collateral sources. View "Joerg v. State Farm Mut. Auto. Ins. Co." on Justia Law
Citizens Prop. Ins. Corp. v. Perdido Sun Condo. Ass’n, Inc.
After a condominium association (Association) prevailed in a breach of contract action against its insurance company (Insurer), it sued Insurer a second time, alleging a statutory first-party bad faith claim under Fla. Stat. 624.155. Insurer moved to dismiss the complaint, citing its immunity from suit under Fla. Stat. 627.351(6)(s). The trial court dismissed the complaint, concluding that a statutory bad faith action under section 624.155 was not among the specifically listed exceptions to the immunity provided in section 627.351(6)(s). The First District Court of Appeal reversed, determining that Insurer’s immunity did not extend to the “willful tort” of failing to attempt in good faith to settle claims as provided by section 624.155. The Supreme Court quashed the decision below, holding that a statutory first-party bad faith cause of action under section 624.155(1)(b) is not an exception to the immunity granted to Insurer by the Legislature. View "Citizens Prop. Ins. Corp. v. Perdido Sun Condo. Ass’n, Inc." on Justia Law
Chase v. Horace Mann Ins. Co.
Horace Mann issued an insurance policy to Richard Chase. Richard signed a form in which he selected reduced uninsured motorist limits. Horace Mann later removed Richard as the sole named insurance from the policy and instead listed Allison Chase, Richard’s daughter, as the named insured on that policy. At no time did Allison reject uninsured/underinsured motorist coverage in writing or select lower limits. After a crash that injured Allison and killed Richard, Allison asserted that she, individually and as personal representative of her father’s estate, was entitled to uninsured motorist (UM) coverage in the amount equal to the policy’s bodily injury limits because she never selected lower UM coverage in writing as required by Fla. Stat. 627.727. The trial court agreed with Allison and determined that Allison and the Estate were entitled to $100,000 of insurance coverage under Allison’s policy. The district court reversed, concluding that Richard’s waiver of high UM coverage bound Allison individually and as personal representative of the Estate. The Supreme Court quashed the decision of the district court, holding that Allison was not subject to Richard’s waiver of benefits, and therefore, Horace Mann did not obtain a valid waiver of benefits from Allison as the named insured of her auto insurance policy. View "Chase v. Horace Mann Ins. Co." on Justia Law
Morales v. Zenith Ins. Co.
Santana Morales died while working for Lawns Nursery and Irrigation Designs, Inc. (Lawns). Thereafter, Lawns’ surviving spouse entered into a workers’ compensation settlement agreement with Lawns and Zenith Insurance Company (Zenith), Lawns’ workers’ compensation and employer liability insurance carrier. In a separate wrongful death lawsuit, Morales’ Estate obtained a default judgment against Lawns. Zenith refused to pay the tort judgment, and the Estate sued Zenith under Lawns’ employer liability policy. A federal district court entered summary judgment for Zenith, holding that the policy’s workers’ compensation exclusion barred the Estate’s suit. On appeal, the Eleventh Circuit certified three questions of law to the Supreme Court. The Court answered (1) the Estate had standing to bring direct action against Zenith to recover the judgment against Lawns; (2) the workers’ compensation exclusion barred coverage of the Estate’s tort judgment under the employer liability policy; and (3) a release in the workers’ compensation settlement agreement, through which Mrs. Morales elected the consideration described in the agreement as the sole remedy with respect to the insurance coverage that Zenith provided to Lawns, precluded the Estate from collecting the tort judgment from Zenith. View "Morales v. Zenith Ins. Co." on Justia Law
Travelers Commercial Ins. Co. v. Harrington
Crystal Harrington was injured in a single-car accident while riding as a passenger in a car owned by her father but driven by Joey Williams, a non-family member. The vehicle was insured by Travelers Commercial Insurance Company (Travelers), but the vehicle was excluded from uninsured motorist (UM) coverage pursuant to a “family vehicle exclusion” provision in the policy. Williams was underinsured, and the liability payments from Williams’ insurer, when combined with payments under Harrington’s policy, did not fully cover Harrington’s medical costs. Therefore, Harrington sought UM benefits from Travelers, which denied the claim. Harrington sued Travelers, seeking payment of stacked UM benefits, despite the fact that her mother, the named insured and purchaser of the policy, had expressly selected non-stacking UM coverage. The trial court granted summary judgment for Harrington, concluding (1) the policy provision excluding family vehicles from UM coverage was invalid because it conflicted with Fla. Stat. 627.727(3); and (2) Harrington’s mother’s election of non-stacking UM coverage did not apply to Harrington. The Supreme Court reversed, holding (1) a family vehicle exclusion in an automobile insurance policy does not conflict with section 627.727(3); and (2) UM benefits are not stackable under section 627.727(9) if the named insured or purchaser of the policy made a non-stacking election. View "Travelers Commercial Ins. Co. v. Harrington" on Justia Law