Bay Farms Corp. v. Great American Alliance Insurance, 835 F. Supp. 2d 1227

Bay Farms owns racehorse breeding/training property in Ocala, Florida, insured by Great American under a policy effective 2008–2009.
Bay Farms claimed sinkhole losses; Great American planned to deny coverage for 25 of 26 buildings with only cosmetic damage, contending no structural damage.
The policy defines Sinkhole Loss as damage where structural damage to the building, including the foundation, is caused by sinkhole activity, but the term 'structural damage' is not defined in the policy.
Florida’s statutory scheme initially defined sinkhole loss and later, in 2005, narrowed it by not defining 'structural damage'; the 2011 Amendment added a detailed statutory definition of 'structural damage'.
The 2011 Amendment is retroactively challenged by Bay Farms as it would narrow coverage under the pre-existing policy; the policy was issued before the amendment, and losses occurred prior to May 17, 2011.
The court analyzes whether the 2011 Amendment is substantive or procedural and whether its retroactive application would impair vested contractual rights.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the 2011 Amendment’s definition of structural damage applies retroactively	Retroactive application would impair Bay Farms’ vested rights.	The amendment clarifies the statute and should apply retroactively to resolve disputes.	The 2011 Amendment cannot be applied retroactively to narrow Bay Farms’ policy coverage.
Whether the 2011 Amendment is a substantive change affecting rights	Amendment substantively narrows coverage, impairing vested rights.	Amendment is procedural/clarifying to align with legislative intent.	The amendment is a substantive change that would impair vested rights if applied retroactively.
Whether Bay Farms had vested rights to pre‑amendment policy terms governing sinkhole losses	Bay Farms had a vested right to coverage as understood before the amendment.	Rights were subject to future statutory changes, not vested in the sense prohibited by retroactivity.	Bay Farms possessed vested contractual rights that cannot be retroactively diminished.

Menendez v. Progressive Express Ins. Co., 35 So.3d 873 (Fla.2010) (two-step retroactivity analysis for substantive amendments)
Florida Hospital Waterman, Inc. v. Buster, 984 So.2d 478 (Fla.2008) (retroactivity constraints on substantive changes to contracts)
Arrow Air, Inc. v. Walsh, 645 So.2d 422 (Fla.1994) (remedial amendments may be retroactive; clarifications not always)
Laforet v. State Farm Mut. Auto. Ins. Co., 658 So.2d 55 (Fla.1995) (retroactivity analysis for amendments affecting substantive rights)
Hassen v. State Farm Mut. Auto. Ins. Co., 674 So.2d 106 (Fla.1996) (statutory amendments and retroactivity to substantive rights)
Chase Federal v. Walsh, 737 So.2d 494 (Fla.1999) (remedial vs substantive distinction in retroactivity)
Johnson v. Government Employees Ins. Co., 333 So.2d 542 (Fla.3d DCA 1976) (contracts construed with existing statutes in mind)
Szabo Food Services, Inc. of North Carolina v. Dickinson, 286 So.2d 529 (Fla.1973) (clarifying amendments and retroactivity considerations)
Kaplan v. Peterson, 674 So.2d 201 (Fla.5th DCA 1996) (clarification cannot nullify prior retroactive intent)
Lussier v. Dugger, 904 F.2d 661 (11th Cir.1990) (CRRA retroactivity context for federal statute clarification)
Yamaha Parts Distributors, Inc. v. Ehrman, 316 So.2d 557 (Fla.1975) (contract rights and retroactive impairment considerations)