315 So.3d 7
Fla. Dist. Ct. App.2021Background
- Homeowners suffered water-line damage in 2017 and filed a claim under a State Farm policy; State Farm initially paid $43,708.01 after its inspection.
- Homeowners filed a CRN alleging statutory bad faith (cursory inspection, failure to retain experts, and a "low-ball" estimate) and later provided a public-adjuster estimate of $168,575.11.
- State Farm invoked the policy appraisal clause and, after the appraisal panel awarded $163,479.10, paid the award (less the prior payment) six days after the award was issued.
- Homeowners sued for statutory bad faith under section 624.155 (failure to attempt in good faith to settle); State Farm moved to dismiss or for summary judgment.
- Trial court granted summary judgment for State Farm, reasoning (1) invocation of appraisal tolled the 60-day CRN cure period and payment of the appraisal cured the CRN, and (2) the CRN lacked specificity; Fourth DCA reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does invoking appraisal toll the 60-day CRN cure period? | No — insurer must still reasonably evaluate and act within 60 days; appraisal invocation does not suspend statutorily mandated cure window. | Yes — appraisal is a condition precedent to payment, so invoking it tolled the cure period (relying on Talat). | Invocation of appraisal does not toll the 60-day cure period; insurer must reasonably evaluate and act during that period. |
| Does payment of the appraisal award (after appraisal) automatically cure alleged CRN violations? | No — a post-cure-period payment does not automatically absolve pre-award unreasonable conduct; focus is on insurer's conduct during cure period. | Yes — payment of the full contractual amount via appraisal cures the alleged violations. | Payment after the 60-day period does not as a matter of law cure alleged violations; reasonableness of insurers pre-award conduct is a factual question. |
| Was the CRN sufficiently specific to satisfy section 624.155? | Yes — CRN described cursory inspection, failure to retain experts, and a low estimate; Homeowners also provided a detailed estimate. | No — CRN allegedly failed to state facts/circumstances with sufficient specificity, including a cure amount. | CRN was sufficiently specific to put State Farm on notice of the alleged violations and corrective action. |
| Was summary judgment appropriate on the bad-faith claim? | No — factual inquiry into insurers conduct during the 60-day period precludes summary judgment. | Yes — appraisal process and payment cured the claim; CRN was deficient. | Reversed: summary judgment improper; bad-faith claim survives and must proceed. |
Key Cases Cited
- Talat Enters., Inc. v. Aetna Cas. & Sur. Co., 753 So. 2d 1278 (Fla. 2000) (discusses when contractual payment obligations and conditions precedent relate to cure under §624.155)
- Vest v. Travelers Ins. Co., 753 So. 2d 1270 (Fla. 2000) (insurer must evaluate claim in good faith based on proof of loss and its expertise before court/arbitration determination)
- Fortune v. First Protective Ins. Co., 302 So. 3d 485 (Fla. 2d DCA 2020) (invocation of appraisal does not toll §624.155(3)(d) cure period; payment after the period does not automatically cure)
- Fridman v. Safeco Ins. Co. of Ill., 185 So. 3d 1214 (Fla. 2016) (60-day window gives insurers final opportunity to comply with claim-handling obligations)
- Harvey v. GEICO Gen. Ins. Co., 259 So. 3d 1 (Fla. 2018) (critical inquiry is whether insurer diligently and reasonably protected insured's interests)
- Landers v. State Farm Fla. Ins. Co., 234 So. 3d 856 (Fla. 5th DCA 2018) (CRN need not await final determination; cure within 60 days negates action)
- Harper v. GEICO Gen. Ins. Co., 272 So. 3d 448 (Fla. 2d DCA 2019) (insurer's late payment did not bar insured's bad-faith action)
- Demase v. State Farm Fla. Ins. Co., 239 So. 3d 218 (Fla. 5th DCA 2018) (elements for ripeness of statutory bad-faith claim)
- Berges v. Infinity Ins. Co., 896 So. 2d 665 (Fla. 2004) (discusses jury role in bad-faith determinations; noted in concurrence)