695 F.3d 1215
11th Cir.2012Background
- Hurricane Wilma damaged Chalfonte Condominium; Chalfonte insured with QBE and submitted an initial damage estimate in Dec 2005 and a sworn proof of loss in Jul 2006.
- Chalfonte alleged declaratory judgment, breach of contract for failure to provide coverage, breach of the implied warranty of good faith and fair dealing, and a Florida statute claim under § 627.701(4)(a).
- The district court dismissed the § 627.701(4)(a) claim as not giving rise to a private right of action; trial proceeded on the remaining claims with a verdict for Chalfonte and damages including hurricane-related items.
- District court later amended the judgment to apply the hurricane deductible; QBE appealed, and the Eleventh Circuit certified five Florida-law questions to the Florida Supreme Court.
- Florida Supreme Court answered most questions, holding first-party claims are statutory bad-faith claims under § 624.155, that § 627.701(4)(a) imposes no private right of action and does not void hurricane deductibles for noncompliance, and that a clause requiring payment upon ‘entry of a final judgment’ does not waive post-judgment bond stays; the case was remanded to the Eleventh Circuit for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are first-party bad-faith claims distinguishable from statutory claims? | Chalfonte argues for a separate implied covenant claim. | QBE contends only § 624.155-based bad-faith relief is available. | Negative; first-party claims are statutory bad-faith under § 624.155. |
| Is the implied good-faith claim subject to § 624.155 bifurcation? | Chalfonte seeks separate remedies beyond § 624.155 bifurcation rules. | QBE relies on existing bifurcation standards for bad-faith claims. | Not reached; question moot after negative on first issue. |
| May an insured sue for failure to comply with § 627.701(4)(a) notice language/type size? | Chalfonte argues private right of action exists and damages follow. | QBE argues no private right of action for § 627.701(4)(a). | Negative; no private action for § 627.701(4)(a) noncompliance. |
| Does noncompliance with § 627.701(4)(a) void hurricane deductibles? | Noncompliance should render hurricane deductible void and unenforceable. | Noncompliance has no automatic voiding effect absent a penalty. | Negative; noncompliance does not void the deductible. |
| Does policy language requiring payment on ‘entry of a final judgment’ waive stay rights? | Such language may compel immediate payment and preclude stays. | Final-judgment language does not waive bond-stay rights under Rule 9.310. | Negative; bond stay rights preserved. |
Key Cases Cited
- Chalfonte Condo. Apartment Ass’n v. QBE Ins. Corp., 561 F.3d 1267 (11th Cir. 2009) (certified Florida-law questions; first-party claims are statutory bad faith claims)
- Ruiz v. Allstate Ins. Co., 899 So. 2d 1121 (Fla. 2005) (insurer duty to act in good faith in processing claims)
- Laforet v. Auto-Owners Ins. Co., 658 So. 2d 55 (Fla. 1995) (statutory bad-faith remedy extended to first-party context)
- Murthy v. N. Sinha Corp., 644 So. 2d 983 (Fla. 1994) (implied private action not inferred absent legislative intent)
- Roberts v. U.S. Fire Ins. Co., 541 So. 2d 1297 (Fla. 1st DCA 1989) (noncompliance penalties require express statutory authorization)
- Prida v. Transamerica Ins. Fin. Corp., 651 So. 2d 763 (Fla. 3d DCA 1995) (type-size notice as permissive; no penalty implied)