Insurance Services – Coverage & Bad Faith Litigation

Priest v. State Farm, No. 1D2024-1577 (1^ST DCA)

Mary Priest entered into a homeowners insurance policy with State Farm Florida Insurance Company with a renewal policy period that began on January 6, 2021. Ms. Priest filed a claim with State Farm as she allegedly sustained wind and water damage to her property. When a dispute arose among the parties regarding coverage and the amount of the loss, the appellant filed suit for breach of contract and declaratory relief. The appellant did not file a pre-suit notice of intent to initiate litigation prior to filing suit, as her insurance policy existed before the statutory pre-notice requirement went into effect on July 1, 2021. The main issue in this case was whether the statutory pre-notice requirement applied retroactively.

Under Section 627.70152 of the Florida Statute, “[a]s a condition precedent to filing a suit under a property insurance policy, a claimant must provide the department with written notice of intent to initiate litigation on a form provided by the department.” This notice is required to be given at least ten business days before suit can be brought. Subsection (1) of this statute states that it “applies exclusively to all suits arising under a residential or commercial property insurance policy.” Emphasis added. The courts have been split on the interpretation of this language. Specifically the 3^rd DCA and 4^th DCA believe the wording “all suits” demonstrated a clear intent for the statute to be applied retroactively; thus, encompassing insurance contracts that were already in existence at the time the statute went into effect. However, the 6^th DCA did not agree with these opinions as it ruled “all suits” was not sufficient to conclude there was legislative intent for retroactivity. The 6^th DCA ruling is currently pending before the Florida Supreme Court.

Here, the court addresses the issue of retroactivity of the statutory provision by applying the two-pronged test in Mendez v. Progressive Exp. Ins. Co., Inc., 35 So. 3d 873, 876 (Fla. 2010). The first prong requires the court to determine whether the legislature intended for the statute to apply retroactively. The second prong requires the court to evaluate if the retroactive application would violate any constitutional principles if such intent is clearly expressed.

When isolating the specific wording “all suits,” it could appear that it references all suits regardless of when the insurance policy was entered into. However, in context, it could mean the category of suit governed by the provision, namely residential and commercial policies. The appellee argued based on the legislative history of the statute, where the legislature removed the draft language “issued or renewed on or after July 1, 2021.” The court observed that the absence of statements in amendments does not constitute clear evidence of retroactive intent as bills are revised for many reasons during the legislative process.  Thus, the court did not get past the first prong as they ruled there was no clear evidence expressing any legislative intent of retroactive application.