Ezequiel Lugo obtained an appellate opinion in an insurance “bad faith” appeal that clarified the level of specificity required for a civil remedy notice of insurance violation under section 624.155, Florida Statutes.
The plaintiff made a claim for fire damage under a homeowners’ insurance policy. During the adjustment of the claim, the plaintiff filed a civil remedy notice complaining of claim delay, an unsatisfactory settlement offer, unfair trade practices, failure to properly investigate the claim, and failure to acknowledge and act promptly to communications regarding the claim. The civil remedy notice listed fourteen statutory provisions, twenty-one administrative regulations, and all policy provisions as being relevant to the alleged violations.
After the claim was resolved through appraisal, the plaintiff sued the insurer alleging statutory insurance “bad faith” under section 624.155. The insurer moved to dismiss the lawsuit on the ground that the civil remedy notice was facially invalid because it failed to comply with the specificity requirement of section 624.155(3)(b). The trial court agreed with the insurer and dismissed the complaint, with prejudice, based on the invalidity of the civil remedy notice.
The plaintiff appealed and claimed that the civil remedy notice was sufficient as a matter of law because it provided the information required by the statute. The plaintiff noted that the Department of Financial Regulation had accepted the civil remedy notice and that decision was entitled to great deference. The plaintiff complained he could not be more specific without access to the claim file. The plaintiff also contended that the civil remedy notice was not required to reference specific policy language because the Legislature included the phrase “if any” in section 624.155(3)(b)(4).
Ezequiel Lugo argued that section 624.155 was enacted, in derogation of the common law, to allow first-party “bad faith” claims under limited circumstances. One key limitation is that a claimant must provide written notice of any alleged violation on a specific form that “shall state with specificity” specific statutory language and specific policy language. The plaintiff’s civil remedy notice did not comply with this statutory requirement of specificity because it included a boilerplate statement that listed whole sections of the policy and cited 35 statutes and regulations. The civil remedy notice even alleged a violation of a statute that applies only to personal injury protection benefits that are available in auto policies but not in homeowners’ policies like the one at issue in this case.
The appellate court focused on the plain language of section 624.155(3)(b), which must be strictly construed because it is in derogation of the common law. In particular, the court noted that the statute requires that the civil remedy notice “state with specificity” information in the notice, specify “language of the statute, which the authorized insurer allegedly violated”, and “[r]eference . . . specific policy language that is relevant to the violation, if any. ”But the plaintiff’s civil remedy notice instead listed nearly all policy provisions and cited thirty-five statutory provisions.For this reason, the appellate court held that the plaintiff had failed to satisfy the statutory requirement that the civil remedy notice identify the specific statute and policy provisions relevant to the alleged violation.
The appellate court also rejected the plaintiff’s argument that the court should defer to the Department of Financial Services’s decision to accept the civil remedy notice. The appellate court explained that there was no evidence the agency even considered the legality of the civil remedy notice. Moreover, Florida law required that the appellate court independently review the notice even if the agency had made a specific determination about the notice’s legality.
The case is Julien v. United Property & Casualty Insurance Company, No. 4D19-2763, 2021 WL 824438 (Fla. 4th DCA Mar. 3, 2021).