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Defense Digest

To Plead or Not to Plead: Understanding the Tool of Interpleader Claims in a Post-Tort Reform Florida

Defense Digest, Vol. 30, No. 4, December 2024

December 1, 2024

Key Points: 

  • Shifting the focus on bad faith claims.
  • The procedural impacts of the Tort Reform Act.
  • Complexities and caution when filing interpleader claims.

On March 24, 2023, Florida Governor Ron DeSantis signed House Bill 837, also known as the Tort Reform Act, into law. Predominantly, the Tort Reform Act changed Florida’s comparative fault scheme. The reform was an effort to reshape Florida’s bad faith laws, with the intention of making Florida more business and insurer friendly. However, the Act made other significant changes that impact insurance claims in Florida. One notable change affects bad faith claims and the ability to make interpleader claims.

Prior to H.B. 837, Florida law required that an insurer act with good faith when addressing claims. A failure to do so resulted in statutory and common law ramifications detrimental to insurers. “Good faith” and “bad faith” had no statutory definitions, often causing insurers to be subject to bad faith claims and Civil Remedy Notices for perceived bad faith in the handling of insurance claims. The Tort Reform Act now clarifies what “bad faith” means and gives insurers a roadmap to ensure they do not subject themselves to bad faith claims. 

The Act states, in part:

An action for bad faith involving a liability insurance claim, including any such action brought under the common law, shall not lie if the insurer tenders the lesser of the policy limits or the amount demanded by the claimant within 90 days after receiving actual notice of a claim which is accompanied by sufficient evidence to support the amount of the claim.

Actual notice is “a notice that is given directly to a party or is personally received by a party informing them of a case that could affect their interests.”

This 90-day deadline also impacts insurers’ ability to make interpleader claims. Florida Rule of Civil Procedure 1.240 provides background as to the nature of interpleader claims. “Persons having claims against the plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be exposed to double or multiple liability.” 

The Tort Reform Act gives insurers another avenue for tendering the policy limits when an interpleader action is present. Picture a motor vehicle accident involving four vehicles and multiple claimants. The driver who caused the accident is insured by Florida’s Best Insurance Company. Due to the number of parties involved, Florida’s Best may be concerned that there could be four separate lawsuits against their insured and policy limits. To avoid this, Florida’s Best asks their defense attorney to draft an interpleader complaint. Filing such a complaint will act as a shield for Florida’s Best against repeated exposure. It will also require Florida’s Best to deposit its policy limits covering an insured driver with the court in order to preserve these funds and ensure all the involved parties can be paid from these funds. 

A word of warning when relying on the ability to make an interpleader claim following the passage of H.B. 837. The Tort Reform Act absolves insurers of bad faith claims only if, within 90 days of receiving notice of competing claims in excess of available policy limits, the insurer files an interpleader action under the Florida Rules of Civil Procedure. The Act emphasizes that an insurer’s interpleader action does not alter or amend the insurer’s obligation to defend its insured. It further specifies: “The insured, claimant, and representative of the insured or claimant have a duty to act in good faith in furnishing information regarding the claim, in making demands of the insurer, in setting deadlines, and in attempting to settle the claim.”

While an interpleader action may sound like a slam dunk for insurance companies and defense attorneys, there are some cons of which to be aware. Interpleader actions can be procedurally complex. Further, the 90-day deadline imposed by the Tort Reform Act is not a suggestion, it is a requirement. Insurers must act promptly in requesting their defense attorneys file an interpleader claim after receiving actual notice of a claim. When insurers request their defense attorneys file an interpleader action, the attorneys must act quickly to get the action filed ahead of the 90-day deadline. Insurers must respond to their defense attorneys promptly regarding review and edits of a draft interpleader action, and defense attorneys must be responsive and timely with their edits and filings. Failure to do so can expose the attorneys to claims for frivolous lawsuits. The 90-day deadline is considered by critics to be “overly generous,” and neither insurers nor attorneys should wait until the last minute to file, lest they miss the deadline and open themselves up to a true “bad faith” claim. Interpleader actions can be costly and inevitably delay resolution of claims, especially when many claimants and complex claims are involved. 

Insurers and defense attorneys must be aware of Florida’s changing laws and the pros and cons of such claims. They must act diligently to identify and file such claims as requested within the 90-day requirement laid out by the Tort Reform Act. Florida’s Tort Reform Act has provided insurers and defense attorneys the benefit of protecting themselves against exposure from multiple claims, but it is up to the insurers and defense attorneys to determine the cost-benefit analysis of doing so and to ensure that all parties are acting in good faith, at all times.

 

Defense Digest, Vol. 30, No. 4, December 2024, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2024 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

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Thought Leadership

The Enforceability of Online Arbitration Agreements Remains Unresolved in Pennsylvania, But the Pennsylvania Superior Court has Provided Substantive Guidance on the Issue

Key Points: The Pennsylvania Supreme Court confirms that an order compelling arbitration is not immediately appealable as collateral orders. The outcome of Chilutti II has generally left the substantive enforceability issues with browsewrap agreements unresolved in Pennsylvania. Until this issue is resolved by the Pennsylvania courts, companies operating in the Commonwealth should strive to ensure that their registration websites and/or application screens conspicuously present arbitration agreements in manners which ensure their users and consumers assent to the terms of the agreements by following the standards set forth in Chilutti I. Browsewrap agreements have been defined as agreements “‘in which a website offers terms that are disclosed only through a hyperlink and the user supposedly manifests assent to those terms simply by continuing to use the website,’ and typically do not require an electronic signature.” See, Cobb v. Tesla, Inc., 2026 WL 458470, at *1 n. 2 (Pa. Super. Feb. 18, 2026) (citation omitted). They are largely regarded as the “if you keep using this, you agree to everything buried in this link” terms embedded into almost every online agreement consumers and users sign before proceeding with purchases of goods and/or services. While consumers are generally aware of them, many almost never click on the link, nor read them in their entirety. This leaves many consumers and users ignorant of the terms and impact of such agreements. However, one’s ignorance of the otherwise neatly-tucked-away terms rarely renders them unenforceable. The issue of the enforceability of browsewrap agreements has been up for debate for some time in many jurisdictions, including Pennsylvania. Indeed, Pennsylvania had a brief grip on this issue for a period in time. Specifically, in 2023, an en banc Superior Court set forth heightened standards for companies to meet in order to secure assent and enforce browsewrap arbitration agreements. See Chilutti v. Uber Techs., Inc., 300 A.3d 430 (Pa.Super. 2023) (en banc) (“Chilutti I”) Chilutti I involved a husband and wife who sued Uber and its subsidiaries after the wife, a wheelchair bound passenger using Uber’s rideshare service, fell, struck her head, and lost consciousness due to her uber driver failing to provide a seatbelt and making an aggressive turn during the trip. The Chilutti’s filed a negligence lawsuit against Uber and its subsidiaries. In response, the defendants moved to compel arbitration, arguing that “the couple’s conduct on the company’s website and application — when they registered for the ridesharing service — signified that they agreed to be bound by the mandatory arbitration provision found in the hyperlinked terms and conditions.” The trial court granted the defendants’ petition and stayed the proceedings pending the results of arbitration, and the Chilutti’s appealed. On appeal, the Superior Court addressed two issues. First, it addressed the issue of whether it had jurisdiction to hear the appeal. A divided Superior Court determined that it did, with its basis for the holding being that the order from which the Chilutti’s appealed was a collateral order. Next, the Superior Court set out to address the merits of the Chilutti’s substantive claim. The Superior Court concluded that the parties lacked a valid agreement to arbitrate. Its rationale was that Uber’s website and application did not provide reasonably conspicuous notice of the terms to the Chiluttis. In reaching this decision, the en banc Superior Court held that browsewrap arbitration agreements are enforceable in Pennsylvania only if the registration website and application screens explicitly inform consumers that they are waiving the right to a jury trial, the registration process cannot be completed until the consumer is fully informed of this waiver, and, when the agreement is available via hyperlink, the waiver appears at the top of the first page of the terms in bold, capitalized text. Since the ruling, Pennsylvania courts have applied Chilutti I to determine if browsewrap agreements are enforceable.  For instance, the Allegheny County Court of Common Pleas invoked Chilutti I to reject an agreement that lacked an express jury-trial waiver on the assent screen.  See Miller v. Festival Fun Parks, LLC, 92 WDA 2025 (C.P. Alleg. Cnty. Mar. 24, 2025). Similarly, the Superior Court has held that notice which failed to explicitly state the consumer was waiving a jury-trial right did not “me[e]t the strict burden set forth by our en banc Court in Chilutti I.” Pierce v. FloatMe Corp., 348 A.3d 1077, 1088 (Pa. Super. 2025). While the issue of enforceability of browsewrap agreements appeared to have been resolved by Chilutti I, Pennsylvania courts’ grip on this issue has been slackened by the Pennsylvania Supreme Court’s January 21, 2026, opinion in Chilutti II. See Chilutti v. Uber Techs., Inc., 349 A.3d 826 (Pa. 2026) (“Chilutti II”). Therein, the Supreme Court did not address the merits of the Chiluttis’ substantive claim, but rather the issue of whether the Superior Court had appellate jurisdiction to immediately review the orders staying litigation pending arbitration. The Court ultimately vacated the en banc opinion on jurisdictional grounds, holding that the Superior Court did not have appellate jurisdiction because the trial court’s order from which the Chiluttis appealed did not qualify as a collateral order and, thus, the Superior Court erred in holding to the contrary and lacked jurisdiction to entertain the merits” of the Chiluttis’ substantive claim. As such, Chilutti II has rendered Chilutti I nonbinding, and the issue of enforceability of online arbitration agreements remains unresolved. However, in light of the fact the Supreme Court did not address or comment on the merits of the Chiluttis’ appeal, Chilutti I is still meaningful. Specifically, it provides guidance as to the standards a company should strive to meet to ensure they have obtained users’ assent so that they are able to enforce online arbitration agreements. Additionally, it may serve as persuasive authority in judges’ evaluations of petitions and/or motions to compel browsewrap arbitration agreements until this particular issue is properly put before our appellate courts. Keanna works in our Pittsburgh, PA office. She can be reached at (412) 803-1174 or KASeabrooks@MDWCG.com.

Thought Leadership

Vendor Cyber Attack Compromises PII of More Than 3 Million Hunting and Fishing License Holders in Texas

The Texas Parks & Wildlife Department (TPWD) announced earlier this month that one of its vendors which handles the sale of state hunting and fishing licenses was the victim of a cybersecurity attack. The threat actor appears to have exfiltrated personal driver’s license information, passport numbers, email addresses, phone numbers and addresses of over 3 million hunting and fishing license holders.  The State Parks Department advised that the attack did not compromise social security numbers, dates of birth or financial information. Texas Cyber Command, the state’s new cybersecurity authority formed to protect critical infrastructure and coordinate threat responses across state and local government, reportedly assisted in detecting and containing the attack. TPWD has already set up free credit monitoring for those impacted through Kroll.  According to press reports, no specific group has yet been identified as the perpetrator of the theft. TPWD also advised that business has not been interrupted and license sales were continuing. This incident once again demonstrates that cybersecurity is only as strong as the weakest link in the supply chain. Businesses must prioritize security across their own environments and those of their vendors and contractors as well.

Result

Unanimous Verdict Obtained in a Medical Malpractice Matter in Bergen County, New Jersey

blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict. 

Result

Summary Judgment Secured, Preserving $750,000 in Coverage for Insured in Major Trucking Liability Dispute

Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.

Thought Leadership

Featured Conversations... Key Takeaways from A.M. Best’s Webinar on the Misuse Defense in Product Liability Claims, Featuring Michael Salvati

Michael Salvati, shareholder in our Philadelphia office, was a panelist for the April A.M. Best webinar, “The Misuse Defense: Strategic Approaches to Defending Product Liability Claims for Insurers.” During the program, Michael and his fellow panelists offered practical, jurisdiction‑specific guidance on how misuse and failure‑to‑warn theories intersect in modern product liability litigation. Michael emphasized the unique challenges these claims present—particularly in states like Pennsylvania, where evidentiary rules diverge sharply from those applied in many other jurisdictions. Failure to Warn as the “Flip Side” of Misuse Salvati explained that failure‑to‑warn allegations often arise as a direct counter to a misuse defense. As he noted, “If our misuse defense is that the plaintiff didn't use a product properly or safely, then the failure to warn claim is that we didn't tell them how to use it properly.” He emphasized that these claims can stem from either the absence of warnings or criticisms of existing warnings, such as insufficient specificity or lack of clarity about risks. Pennsylvania’s Unique Evidentiary Landscape One of Salvati’s most notable points was the stark difference in how Pennsylvania treats evidence of compliance with industry standards. He highlighted that Pennsylvania is “one of the only states…where that evidence is not admissible” in strict liability cases. Manufacturers cannot rely on compliance with ANSI, UL, ISO, or even federal safety standards to defend the product against a strict liability claim—because the focus is solely on the product itself, not the manufacturer’s conduct. Salvati acknowledged the challenge this creates for defense counsel and clients who expect such compliance to carry weight. Understanding the Three Defect Theories Salvati also walked through the three primary defect theories recognized in many jurisdictions: - Design defect – a flaw in the product’s intended design - Manufacturing defect – a deviation affecting a specific unit - Failure to warn – inadequate instructions or warnings He noted that warnings claims are increasingly significant and sometimes stand alone when design or manufacturing theories are weak. As he put it, plaintiffs often default to warnings claims because “the default position seems to be, ‘If I got hurt, there must be something wrong.’” Warranties and State‑by‑State Variations Salvati addressed how breach‑of‑warranty claims fit into the broader framework, explaining that implied warranties—such as merchantability—often overlap with strict liability in Pennsylvania. He emphasized the importance of understanding local nuances, as warranty law and admissibility rules vary widely across states. Looking Ahead: The Growing Importance of Warnings In his closing remarks, Salvati stressed that warnings should never be treated as an afterthought in product liability defense. He observed that warnings‑only claims are becoming more common and urged manufacturers and insurers to continually evaluate the clarity and completeness of their instructions and warnings. His takeaway: “We should always be talking about what are the instructions that come with our products…to bolster a misuse defense.” Listen to the complete webinar here: https://www3.ambest.com/conferences/events/eventregister.aspx?event_id=WEB1074.