The Florida Supreme Court has accepted for review a First District decision holding that Florida’s state insurer of last resort, Citizens Property Insurance Corporation, is not immune from a statutory bad faith failure to settle claim.  See Citizens Prop. Ins. Corp. v. Perdido Sun Condo. Ass’n, No. SC14-185.  To view the First District’s opinion, click here.

After its insured property was damaged by a hurricane, Perdido Sun made a claim on its insurance policy with Citizens.  Perdido Sun was not satisfied with the amount of Citizens’ eventual payment on the claim and sued for breach of contract to recover additional money.  Perdido Sun won its breach of contract claim and then filed a second lawsuit against Citizens alleging statutory bad faith failure to settle under section 624.155(1)(b)1., Florida Statutes.  Citizens moved to dismiss, asserting its immunity from suit under section 627.351(6)(s)1., Florida Statutes.  The trial court granted the motion.

On appeal to the First District, Perdido Sun argued that the “willful tort” exception to the immunity provision applied to its bad faith action.  Citizen argued the exception must be strictly construed and because it does not specifically reference a cause of action under section 624.155, it does not apply.  The First District found that “failing to attempt in good faith to settle claims as provided by section 624.155, Florida Statutes” is a “willful tort.”  It therefore reversed the order dismissing the complaint with prejudice.

The First District certified conflict with the Fifth District’s decision in Citizen Property Insurance Corp. v. Garfinkel, 25 So. 3d 62 (Fla. 5th DCA 2009), and certified the following question of great public importance to the Florida Supreme Court:  “Whether the immunity of Citizens Property Insurance Corporation, as provided in section 627.351(6)(s), Florida Statutes, shields the Corporation from suit under the cause of action created by section 624.155(1)(b), Florida Statutes for not attempting in good faith to settle claims?”

The supreme court held oral argument on October 7, 2014.  This article will be updated once the Court decides the case.

 Image courtesy of Flickr by Ed Hart (no changes).