Finally, Definitive Answers from The Florida Supreme Court on Bad Faith and the Effect of Non-Compliant Notice Provisions in Policies

Yesterday, in QBE Ins. Corp. v. Chalfonte Condominium Apartment Ass’n., Inc., the Florida Supreme Court issued its long-awaited decision in response to questions certified from the United States Court of Appeals for the Eleventh Circuit as being determinative of a case pending in that court for which there was no controlling Florida precedent.

The case arises from a Hurricane Wilma insurance claim by a condominium association against its insurer, QBE.  The condo association was dissatisfied with QBE’s investigation and processing of its claim and filed suit alleging various claims for breach of contract, declaratory relief, statutory policy violations and breach of implied warranty of good faith and fair dealing.  A jury ultimately found QBE liable on all claims and the trial court entered a multi-million dollar judgment against QBE.

QBE posted a bond and appealed the judgment.  The Eleventh Circuit Court of Appeal certified questions to the Florida Supreme Court that it believed the Florida courts had not definitively answered. 

The Florida Supreme Court definitively answered the certified questions as follows: 

1. Florida does not recognize a cause of action for breach of an implied warranty of good faith and fair dealing against an insurer.  Such claims must be brought under section 624.155, Fla. Stat.
2. An insured does not have a private cause of action against an insurer for its failure to comply with the language and type-size requirements established by section 627.701(4)(a), Fla. Stat., pertaining to hurricane deductibles and coinsurance provisions.
3. An insurer’s failure to comply with the language and type-size requirements in section 627.701(4)(a), Fla. Stat., does not render the hurricane deductible provision in an insurance policy void and unenforceable.
4. Notwithstanding language in an insurance policy mandating payment of benefits upon “entry of a final judgment,” an insurer may procedurally obtain an automatic stay of execution pending appellate review by posting a good and sufficient bond.

The Court’s opinion, which is attached, has not yet been released for publication in the permanent law reports and, therefore may be subject to revision or withdrawal.

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