Professional Liability

The homeowner, Michael Kaiser, had a property insurance policy with Citizens when a hurricane damaged his home. The homeowner filed a claim and ultimately sued Citizens for allegedly failing to properly adjust his claim. Shortly thereafter, the homeowner and Citizens reached an agreement and settled the claim for $32,000. In conjunction with the settlement, the homeowner signed a full and final release agreement, releasing his right to pursue any and all legal claims he may have had with regard to this claim under the insurance policy. 

However, when Citizens took 40 days to send him the settlement payment and failed to include an additional nominal amount for “late-payment interest,” the homeowner proceeded to file a class action complaint under the insurance policy’s “Loss Payment” provision and Florida Statute § 627.4265. The policy’s Loss Payment provision stated that after Citizens receives a proof of loss and reaches a written agreement with the homeowner, the loss must be paid within 21 days. Similarly, Florida Statute § 627.4265 also requires an insurance company to “tender payment according to the terms of the [claim settlement] agreement no later than 20 days after such settlement is reached [or pay] interest at a rate of 12 percent per year.” Citizens denied any obligation to pay the interest. 

The matter proceeded through litigation, where the lower court ultimately granted judgment in Citizen’s favor, based primarily on the fact that the homeowner was seeking interest pursuant to the breach of contract claim he brought under his insurance policy instead of seeking interest for a breach of the terms of the settlement agreement between the parties. The lower court concluded that since the homeowner had released all claims related to the breach of contract claim he brought under his insurance policy, that Citizens did not breach the terms of the insurance policy. 

The homeowner appealed the lower court’s ruling to the First District Court, reiterating that Citizens’ failure to pay interest on its settlement payment constituted a new breach of contract claim arising from the prompt-payment requirement contained in the Loss Payment provision. 

The Appeals Court reviewed the settlement agreement between the parties and noted that the agreement “included a robust claim-discharge provision in which Kaiser received $32,000 in return for giving up his right to bring additional claim-related actions against Citizens.” Additionally, the settlement agreement expressly stated it was the parties’ intention to settle interest claims arising out of the insurance claim. The District Court of Appeals concluded that the settlement agreement discharged any right to interest the homeowner may have had under the policy’s Loss Payment provision. 

Moreover, the court noted that the insurance policy was not incorporated into the settlement agreement and, thus, the right the homeowner may have had to interest under the policy was also not carried over into the settlement agreement. As a result, the court concluded that any subsequent claim about the timeliness of Citizens’ payment could only arise from a breach of contract action related to the settlement agreement itself, which the homeowner did not assert as their basis for the right to interest in the class action lawsuit. 

Ultimately, the Appeals Court affirmed the lower court’s ruling, holding, because the homeowner broadly settled and released all matters under the policy, the terms of the insurance policy no longer governed the matter. 

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_{Legal Update for Florida Coverage & Property Litigation – December 2025 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. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2025 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.}