Insurance Services – Coverage & Bad Faith Litigation

Universal Property & Casualty Ins. Co. v Alvarez, No.3D24-1853, Fla. 3d. DCA, May 13, 2026.

At issue in this appeal was the trial court’s jury instruction regarding presumption of prejudice and post-loss obligation defenses. Alvarez filed a breach of contract action arising out of her insurance claim pertaining to alleged damage from Hurricane Eta. Universal raised several affirmative defenses, including Alvarez’s violation of her contractual post-loss obligations. At the start of trial, the court ruled that the legal presumption of prejudice was inapplicable to all of Universal’s post-loss obligation defenses except prompt notice. Universal opposed the ruling and continued to object at the charge conference.

At trial, there was undisputed evidence that Alvarez failed to comply with multiple post-loss obligations, in addition to her failure to provide prompt notice, such as not providing requested documents and failing to preserve damaged property. Universal introduced a records request letter and testified that it never received the requested documents. Alvarez admitted she was aware of the records request, and that her uncle purchased materials and repaired the roof before Universal inspected it. Based on the court’s ruling at the start of trial, the jury was instructed that the presumption of prejudice only applied to Universal’s prompt notice defense and none of its other post-loss obligation defenses. The jury returned a verdict in favor of Alvarez, and the court subsequently denied Universal’s post-trial motions. Universal appealed the trial court’s entry of final judgment and denial of its post-trial motions for directed verdict or a new trial. On appeal, Universal contended the trial court erred in its jury instruction regarding the presumption of prejudice.

In reversing the trial court, the Third DCA looked to its prior holding in American Integrity Ins. Co. v. Estrada, 276 So. 3d 905 (Fla. 3d DCA 2019). ‘In Estrada, we held that “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.”’ Alvarez, at 4 (quoting Estrada, at 916). ‘In reversing the trial court, we instructed, “If American Integrity establishes that Estrada failed to materially satisfy any contractually mandated post-loss obligations, then the burden shifts to Estrada to establish that American Integrity was not prejudiced by Estrada's breach.”’ Id., at 4 (quoting Estrada, at 917) (emphasis added).

The Third DCA found that the evidence at trial was sufficient enough to have required the trial court to instruct the jury on Universal’s presumption of prejudice to all of its post-loss obligation defenses. Since the court’s instruction to the jury was an inaccurate statement of law, the Third DCA ruled the trial court committed reversible error, and reversed and remanded for a new trial.