DO NOT FORFEIT COVERAGE UNDER YOUR PROPERTY INSURANCE POLICY

If you have read prior articles (see here and here as an example), then you know that when it comes to first-party property insurance policies, an insured must comply with post-loss obligations in the policy.  Failure to comply with a post-loss obligation gives the insurer the argument that the insured materially breached the policy and, therefore, forfeited rights to coverage.  Naturally, this is avoidable by ensuring post-loss obligations are complied with, ideally under the guidance of counsel and qualified public adjusters to ensure your rights are being preserved and maximized.

[W]hen an insurer has alleged, as an affirmative defense to coverage, and thereafter has subsequently established, that an insured has failed to substantially comply with a contractually mandated post-loss obligation, prejudice to the insurer from the insured’s material breach is presumed, and the burden then shifts to the insured to show that any breach of post-loss obligations did not prejudice the insurer.

Universal Property & Casualty Ins. Co. v. Horne, 46 Fla.L.Weekly D201b (Fla. 3d DCA 2021) quoting American Integrity Ins. Co. v. Estrada, 276 So.3d 905, 916 (Fla. 3d DCA 2019).

This means when an insured fails to comply with a post-loss obligation (e.g., sworn statement in proof of loss, examination under oath), the property insurer will assert this failure as an affirmative defense.   There is an “if-then” framework to determine whether there is “to be a total forfeiture of coverage under a homeowner’s insurance policy for failure to comply with post-loss obligations.”  Horne, supra.   First, the insurer has the burden to establish that its insured failed to substantially comply with a post-loss obligation in the policy.  If the insurer establishes this, prejudice to the insurer is presumed.  Then the burden shifts to the insured to demonstrate the breach (failure to comply with post-loss obligations) did NOT prejudice the insurer.

In Horne, the property insurer raised as an affirmative defense that its insured failed to timely comply with its post-loss obligation of submitting a sworn statement in proof of loss within 60 days.  The insured argued, and the trial court agreed, that the insurer waived this argument by acknowledging coverage by tendering some payment to its insured for the loss. The appellate court held this was incorrect because “[i]nvestigatig any loss or claim under any policy or engaging in negotiations looking toward a possible settlement of any such loss or claim does not constitute a waiver of a ‘sworn proof of loss’ requirement.”  Horne, supra (internal citations and quotation omitted).  Without waiver applying, this means the insured’s failure to timely submit its sworn statement in proof of loss must fall within the “if-then” framework discussed above to determine prejudice to the insurer and, thus, total forfeiture under the policy.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

READ THE PROPERTY INSURANCE POLICY TO BE SURE YOU ARE COMPLYING WITH POST LOSS OBLIGATIONS

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.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

AVOID THE HEADACHE – SUBMIT THE SWORN PROOF OF LOSS TO PROPERTY INSURER

Property insurance policies (first party insurance policies) contain post-loss obligations that an insured must (and should) comply with otherwise they risk forfeiting insurance coverage.   One post-loss obligation is the insurer’s right to request the insured to submit a sworn proof of loss.  Not complying with a post-loss obligation such as submitting a sworn proof of loss can lead to unnecessary headaches for the insured.  Most of the times the headache can be avoided.  Even with a sworn proof of loss, there is a way to disclaim the finality of damages and amounts included by couching information as estimates or by affirming that the final and complete loss is still unknown while you work with an adjuster to quantify the loss.  The point is, ignoring the obligation altogether will result in a headache that you will have to deal with down the road because the property insurer will use it against you and is a headache that is easily avoidable.  And, it will result in an added burden to you, as the insured, to demonstrate the failure to comply did not actually cause any prejudice to the insurer.

By way of example, in Prem v. Universal Property & Casualty Ins. Co., 45 Fla. L. Weekly D2044a (Fla. 3d DCA 2020), the insured notified their property insurer of a plumbing leak in the bathroom.  The insurer requested for the insured to submit a sworn proof of loss per the terms of the insured’s property insurance policy. The insurer follow-up with its request for a sworn proof of loss on a few occasions. None was provided and the insured filed a lawsuit without ever furnishing a sworn proof of loss.  The insurer moved for summary judgment due the insured’s failure to comply with the post-loss obligations, specifically by not submitting a sworn proof of loss, and the trial court granted the insurer’s motion.  Even at the time of the summary judgment hearing, the insured still did not submit a sworn proof of loss.

On appeal, the appellate court affirmed that the insured failed to comply with its post-loss obligation by not submitting a sworn proof of loss.  That decision seemed easy.  However, it remanded back to the trial court to determine whether the insurer was prejudiced by the insured’s failure to comply with the post-loss obligation in accordance with case law putting a burden on an insured to establish the insurer was not prejudiced by the failure to comply:

By failing to submit a sworn proof of loss to [the property insurer], the Insureds deprived [the property insurer] of the “opportunity to make a timely investigation, and to prevent fraud and imposition upon it.”  Not only did the Insureds fail to provide the information required under the policy, but they also objected to [the property insurer] obtaining information from their public adjuster via subpoena and failed to coordinate any depositions prior to the filing of and hearing on the motion for summary judgment.

As a result of the Insureds’ failure to submit a sworn proof of loss at any point in time prior to the trial court’s entry of summary judgment, the trial court correctly found, based on this record, that the Insureds materially breached a post-loss contractual condition precedent to the commencement of a lawsuit against [the property insurer]. We affirm the trial court’s finding on the Insureds’ lack of compliance with their post-loss obligations because the Insureds failed to provide [the property insurer] with a sworn proof of loss prior to filing suit and failed to provide any evidence sufficient for a jury to find that they had substantially complied with that requirement.

A panel of this Court recently held, “when an insurer has alleged, as an affirmative defense to coverage, and thereafter has subsequently established, that an insured has failed to substantially comply with a contractually mandated post-loss obligation, prejudice to the insurer from the insured’s material breach is presumed, and the burden then shifts to the insured to show that any breach of post-loss obligations did not prejudice the insurer.” Estrada, 276 So. 3d at 916 (certifying conflict with Rodrigo v. State Farm Fla. Ins. Co., 144 So. 3d 690 (Fla. 4th DCA 2014) and Goldman v. State, 660 So. 2d 300 (Fla. 4th DCA 1995)). We are bound by that decision.

At the time the trial court heard and ruled on [the property insurer’s] motion for summary judgment, this Court had not issued its opinion in Estrada. The record on appeal, therefore, does not contain any discussion of the shifting burden of proof and whether [the property insurer] was prejudiced by the Insureds’ failure to submit any sworn proof of loss.

Lacking the subsequently provided analysis in Estrada, the trial court cannot be faulted for ending its analysis at summary judgment as to whether the insured complied or substantially complied with the post-loss obligations. Under Estrada — applicable to this appeal, which was pending at the time of Estrada‘s release — trial courts are required to analyze whether the insurer was prejudiced by the insured’s failure to comply prior to determining that the insured forfeited coverage by the breach. Thus, we reverse and remand to permit the parties to make supplemental filings and for the trial court to consider and analyze the question of prejudice, as set forth in Estrada.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

ORDINARY USE OF TERM IN INSURANCE POLICY PREVAILED

There are cases where you feel for the plaintiff, but understand why they did not prevail, despite the creative efforts of their counsel.  The case of Robinson v. Liberty Mutual Ins. Co., 958 F.3d 1137 (11th Cir. 2020) is one of these cases.

In Robinson, the plaintiff moved into a home that turned out to be infested with a highly venomous spider.  Efforts to eradicate the spider proved unsuccessful and the spider apparently infested the entire home.  The plaintiff made a claim under their homeowner’s property insurance policy arguing that their home suffered a physical loss caused by the spider infestation as the spider presented an irreparable condition that rendered the home unsafe for occupancy.  (It probably did!). The property insurer denied coverage because the policy had an insurance exclusion for loss caused by birds, vermin, rodents, or insects.

The insurer claimed the spider is an insect or vermin and, therefore, there is no coverage based on the exclusion.  The insured creatively argued that “scientifically speaking” a spider is an arachnid and not an insect.  Neither the trial court nor the Eleventh Circuit found this argument persuasive.

Under the ordinary dictionary meaning of the term “insect,” a spider fits into this meaning any many dictionaries even list a spider as an example of an insect.  Moreover, vermin include “small common harmful or objectionable animals (as lice or fleas) that are difficult to control.”  A highly venomous spider that cannot be eradicated fits within this meaning based on the allegations of the plaintiff’s claims.

Sure, you feel for the homeowner that moved into a home that cannot be occupied based on the infestation of a highly venomous spider.  And the homeowner’s lawyers made a creative argument by stepping away from ordinary uses of terms by focusing on the technical scientific definition of a spider.  But, the ordinary meanings and uses of terms in an insurance policy prevailed. And, they probably should prevail.   This does not mean the creative arguments should not have been pursued.  They probably should have in this scenario where efforts to eradicate the spider were not successful and the home could not be occupied.  However, ordinary dictionary meanings and uses should not be ignored when interpreting a contract, which is what an insurance policy is.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

QUICK NOTE: BEWARE OF AN ANTI-CONCURRENT CAUSE PROVISION IN YOUR PROPERTY INSURANCE POLICY

Paying the lowest premium for property insurance is oftentimes not a great thing because, as with everything else, “you get what you pay for.”   If you are paying a lower premium, it is for a reason.  You likely have a restrictive policy that excludes more coverage (and, perhaps, all coverage) than you’d actually like in the event your property sustains a loss.   Think about the coverage you are looking for before deciding to get the policy with the lowest premium.

For instance, there are policies with an exclusion that precludes coverage for water penetration “through the roof system or exterior walls or windows.”  Think about this exclusion.  Water penetration will undoubtedly come from one or a combination of these places, meaning this exclusion totally restricts coverage for water intrusion claims.  Moreover, property insurance policies are also including anti-concurrent cause language in the policy, which is language that says, “Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.”  “‘An anti-concurrent cause provision is a provision in a first-party insurance policy that provides that when a covered cause and non-covered cause combine to cause a loss, all losses directly and indirectly caused by those events are excluded from coverage.” Security First Ins. Co. v.   Czelusniak, 45 Fla. L. Weekly D1151b, n.1 (Fla. 3d DCA 2020).

In Czelusniak, an insured had an all-risk property insurance policy with this water penetration exclusion and an anti-concurrent cause provision. The insured sustained water penetration through windows, the walls, and doors, resulting in water damage.   The exclusion bars water penetration through windows and walls but mentions nothing about doors.  But, it did not matter because of the anti-concurrent cause provision:

While there is no provision in the policy expressly excluding damage from water penetrating through the doors of the dwelling, the policy expressly excluded damage from water penetrating through the “roof system or exterior walls or windows . . . .” Because evidence of water entering through the exterior walls and windows was undisputed and is expressly excluded by the policy, the entire loss is excluded from coverage due to the anti-concurrent cause provision regardless of any other cause or event contributing concurrently or in any sequence to the loss.

***

Accordingly, the anti-concurrent cause provision, coupled with the undisputed evidence that the loss was caused by a combination of both excluded and covered perils, foreclosed the analysis of whether the jury could legally or factually separate the damage caused by water coming through the door from water coming through the walls and windows. Therefore, we hold that the trial court erred in directing the verdict in favor of the insured and reverse and remand for the trial court to direct the verdict in favor of Security First.

Czelusniak, supra.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

QUICK NOTE: EXAMINATION UNDER OATH OF NON-INSURED

Property insurance policies contain an examination under oath (“EUO”) provision that requires the insured and the insured’s agents and representatives to submit to an EUO.   An EUO is a sworn statement – – a pre-lawsuit deposition, so to speak.  It is a post-loss condition in the property insurance policy that, absent certain circumstances, the insured must comply with.

In a recent decision, Avatar Property & Casualty Insurance Company v. Castillo, 45 Fla. L. Weekly D966a (Fla. 4th DCA 2020), the issue was whether the insured was required to produce his handyman and restoration company for an EUO.   The EUO provision in the policy stated:

In the County where the “residence premises” is located you, your agents, your representatives, including any public adjuster engaged on your behalf, and any and all “insureds” must submit to [EUOs] and sign same when requested by us.

The handyman and restoration company were involved in furnishing estimates or mitigation work and the insurer claimed they should be deemed an agent or representative of the insured.  The appellate court, affirming the trial court, disagreed:

[T]he handyman and the water restoration employees were not the insureds’ “agents” or “representatives” under the dictionary definitions of those terms. Further, to the extent the policy here is considered uncertain, we are compelled to construe the interpretation against the insurer.  The insurer, as the policy’s drafter, easily could have added language including “any persons who inspected or repaired the covered property.” For us to do so now would re-write the policy.

Avatar Property & Casualty Insurance Co., supra.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

INSURER CAN DEMAND APPRAISAL WHERE IT HAS NOT WHOLLY DENIED COVERAGE

 

Certain property insurance policies provide that if the insurer or insured fail to agree on the quantum of the loss, either party can demand that the quantum be decided by appraisal.  Some policies provide this is a permissible process.  Others provide the process is mandatory provided that a party demands appraisal.  This is something that should be reviewed in a property insurance policy when a dispute arises.

[A]n insurer is entitled to enforce a policy appraisal provision [in a property insurance policy] where it has not wholly denied coverage.”  State Farm Florida Ins. Co. v. Speed Dry, Inc., 45 Fla. L. Weekly D787a (Fla. 5th DCA 2020).

In State Farm Florida Ins. Co., the property insurance policy included a mandatory appraisal provision that provided that either the insured or insurer could demand that the amount of the loss be set by appraisal.  As a result of storm damage to the insured’s house, the issue was whether the insurer could replace missing or damaged shingles with shingles that did not match the other shingles on the roof.   The insured assigned the right to proceeds to Speed Dry which filed an action for declaratory relief that the insured was entitled to either roof replacement or matching roof shingles. The property insurer moved to compel appraisal pursuant to the property insurance policy.

While the trial court denied the insurer’s motion to compel appraisal, the Fifth District Court of Appeal reversed.  The insurer did not dispute there was a covered loss.  Instead, the dispute centered on the amount of the loss – the insurer acknowledged there was a covered loss but disputed the amount associated with the loss.  “Because [the insurer] did not wholly deny coverage for storm damage to the [insured’s] roof, it was entitled to compel appraisal pursuant to the terms of the insurance policy.”  State Farm Florida Ins. Co., supra

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

PROVING AND CHALLENGING CAUSATION UNDER NAMED PERILS PROPERTY INSURANCE POLICY

Under a named perils property insurance policy, the insured bears the burden of proof to prove that the peril, a covered loss, caused the asserted damageSee Citizens Property Ins. Corp. v. Kings Creek South Condo, Inc., 45 Fla. L. Weekly D597a (Fla. 3d DCA 2020).   If an insurer is relying on a policy exclusion to deny coverage, the exclusion must be plead as an affirmative defenseSee id.

This is not an uncommon occurrence: the insured claims a peril caused the loss (damage) and the insurer disputes causation, denying coverage.   Sometimes the insurer relies on a policy exclusion to deny coverage.  Sometimes it disputes causation.  Most times it does both.

In Kings Creek South Condo, a condominium association had a named perils property insurance policy to cover the perils of wind and hail.   The policy was in effect between September 2005 through September 2006.   The association included fifteen buildings and nine separate roofs.

Hurricane Wilma hit Florida in October 2005, during the policy period.  Three-plus years later, the association claimed that one of the building’s roofs had been damaged by Hurricane Wilma.  The association later claimed all nine roofs were damaged by Hurricane Wilma with a replacement cost value in excess of $3.9 Million.  The property insurer denied coverage for numerous reasons including the argument that the roofs were not damaged by Hurricane Wilma but due to improper installation and maintenance.  The insurer challenged causation.

During trial, the trial court prevented the insurer from putting on evidence from an expert establishing that the roofs were damaged due to improper installation.  Based on the argument from the association (insured), the trial court maintained that because the roofs were installed prior to the policy period, the insurer was arguing under the Existing Damage exclusion in the property insurance policy.  However, the insurer never raised the Existing Damage exclusion as an affirmative defense. Hence, the insurer could not rely on this exclusion at trial.  As a result, the trial court granted a directed verdict as to liability against the insurer and the jury returned a sizeable damages verdict in favor of the insured.  The insurer moved for a new trial which was denied.

The appellate court reversed the directed verdict on liability and remanded the case for a new trial. The appellate court held the insurer did not need to rely on the Existing Damage exclusion to argue (or dispute causation) that the improper installation of the roof caused the association’s loss.  The insurer was simply presenting evidence as to a non-wind related loss (non-covered loss) as a basis to challenge the insured’s evidence that the roof loss was caused by Hurricane Wilma.  The evidence goes directly to causation:

[T]he trial court incorrectly found that evidence of the faulty roof installation, occurring prior to the policy, was subsumed by the Existing Damage Exclusion. Whether the faulty installations occurred prior to or during the policy period is irrelevant for purposes of challenging causation in a wind-only policy. Technically, the Exclusion would bar coverage of any prior damage from causes pre-dating the policy like the roof installation, but this is secondary to the fact that a faulty roof installation is a non-wind related cause that does not fall under the named peril of wind.

Kings Creek South Condo, Inc., supra.

If you are involved in a property insurance coverage dispute, it is important to work with counsel that understands the coverage issues and the insured’s burden of proof.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

REPLACEMENT COST VALUE – HOMEOWNERS’ PROPERTY INSURANCE POLICIES

Many homeowners’ property insurance policies are replacement cost value policies for the dwelling, oftentimes referred to as Coverage A.  A replacement cost policy is defined as follows:

Replacement cost insurance is designed to cover the difference between what property is actually worth and what it would cost to rebuild or repair that property.”  A “replacement cost policy” is a policy where the insurer agrees to compensate for a loss without taking into account depreciation. Such a policy does not prohibit repairing the damaged property.  In fact, both the governing statute as well as the parties’ insurance policy expressly provide that an insurer may limit its liability to the “reasonable and necessary cost to repair the damaged, destroyed, or stolen covered property.”  Thus, we conclude that a replacement cost policy does not mandate that the insurer replace the damaged property.

Prepared Ins. Co. v. Cal, 209 So.3d 14, 17 (Fla. 4th DCA 2020) (internal citations omitted).

Florida Statute s. 627.7011 governs an insurer’s post-loss obligations under a homeowner’s property insurance policy and provides in applicable part:

(3) In the event of a loss for which a dwelling or personal property is insured on the basis of replacement costs:

(a) For a dwelling, the insurer must initially pay at least the actual cash value of the insured loss, less any applicable deductible. The insurer shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred. If a total loss of a dwelling occurs, the insurer shall pay the replacement cost coverage without reservation or holdback of any depreciation in value….

Per this statutory language, under a replacement cost policy “the insurer is required initially to pay to its insured at least the actual cash value of the covered loss, less the deductible. After it meets this statutory obligation, the insurer is required to pay its insured for repairs as the insured incurs repair costs, also known as the replacement cost value.”  Citizens Property Ins. Corp v. Tio, 45 Fla. L. Weekly D641d (Fla. 3d DCA 2020) (finding that when insurer denies coverage and forces the insured to sue, the insurer cannot try to cure the breach of denial by subsequently tendering only the actual cost value).

If you have a property insurance dispute with your carrier, it is important to work with counsel to ensure your rights are being preserved under your policy.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

YOUR BAD FAITH JURY INSTRUCTION AGAINST AN INSURER IS IMPORTANT

A statutory bad faith claim against an insurer is derived from Florida Statute s. 624.155.  A bad faith claim against a first party insurer, such as a property insurer, must be statutory.  Check out the hyperlink of the statute, but a party must first file a Civil Remedy Notice identifying the statutory violations to preserve the statutory bad faith claim giving the insurer an opportunity to cure.

In a noteworthy case, Cooper v. Federated National Insurance Company, 44 Fla. L. Weekly D2961a (Fla. 5th DCA 2019), the Fifth District Court of Appeal dealt with the jury instruction for an insured’s statutory bad faith claim against their property insurer.  The insured filed a bad faith claim predicated on the property insurer violating the provisions of Florida Statute s. 626.9541(1)(i)3, which involves unfair claim settlement practices.  The insured had a jury trial and submitted a proposed jury instruction regarding bad faith that tracked the very essence of their bad faith claim and was modeled after s. 626.9541(1)(i)(3).  The trial court, however, denied this jury instruction, instead adopting a standard jury instruction for bad faith.  The jury returned a verdict in favor of the property insurer and the insured appealed arguing it was reversible error for the trial court NOT to present to the jury their bad faith jury instruction.  The Fifth District agreed and ordered a new trial finding that the trial court’s failure to present the jury instruction amounted to a miscarriage of justice.

Florida’s standard bad faith jury instruction is not the be-all-end-all of jury instructions for bad faith. Specifically for a statutory bad faith claim, the standard jury instruction would not fully model a party’s theory of bad faith which would be modeled after a statutory violation.  The lack of a proper jury instruction is not compensated for by an attorney’s closing argument as to the insured’s theory of the case:

Leaving it to the parties’ attorneys to explain to the jury in closing argument what legal principles apply is an inadequate substitute for an accurate, relevant, and complementary instruction that contains legal principles not covered in a standard instruction.  Contrary to [the property insurer’s] argument, we do not believe that the standard bad faith jury instruction sufficiently informed the jury of all the relevant law regarding bad faith. Nor do we believe that, under the facts of this case, the acts constituting a violation of section 626.9541(1)(i)3. were subsumed within the standard jury instruction.

Cooper, supra (internal quotations omitted).

A jury instruction is important and is nothing to sneeze at.  Here, the Fifth District thought so as it reversed a jury’s verdict finding that the failure to include a bad faith jury instruction that modeled the theory of the case and specific statutory violations the insured was aiming to prove was reversible error.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.