Fortune and Domin v. First Protective Insurance Company d/b/a Frontline Insurance

By: Oliver B. Clark

302 So.3d 485 (Fla. 2d DCA 2020)

In this appeal, Florida’s Second District Court of Appeal (Second DCA) reversed a trial court’s grant of summary final judgment for First Protective Insurance Co. d/b/a Frontline Insurance (Frontline), where the trial court had determined as a matter of law that Frontline cured a Civil Remedy Notice of Insurer’s Violation (CRN) by invoking the appraisal process before the CRN was filed and by paying the appraisal award over sixty days after the CRN was filed.

Frontline issued Fortune & Domin a homeowner’s insurance policy effective on September 10, 2017 (Hurricane Irma). Fortune & Domin filed a claim with Frontline for the hurricane damage to the property. Frontline’s investigation resulted in a loss valuation of $3,013.20. Fortune & Domin disagreed and submitted their Public Adjuster’s estimate for the carrier’s consideration. On December 27, 2017, to resolve the dispute about the amount of loss, Frontline invoked the policy’s appraisal provision. On January 8, 2018, Fortune & Domin filed a CRN alleging “bad-faith” by Frontline. Frontline responded, denying the allegations. On June 1, 2018, the appraisal saw Fortune & Domin awarded $121,516.55. Frontline paid the net amount owed of $110,067.35.

On October 25, 2018, Fortune & Domin sued Frontline, seeking relief for Frontline’s “bad faith” under section 624.155(1)(b)(1). Florida’s bad-faith statutory scheme contains a “cure” provision which states that “No action shall lie if, within 60 days after filing notice, the damages are paid or the circumstances giving rise to the violation are corrected.” § 624.155(3)(d). Frontline filed a motion to dismiss or, in the alternative, a motion for summary judgment. The trial court’s written ruling stated “[t]hat, as a matter of law, [the Insurer] cured the Civil Remedy Notice of Insurer Violations by its invocation of the appraisal process before Fortune & Domin filed the Civil Remedy Notice of Insurer’s Violation and by Frontline’s subsequent payment of the appraisal award.”

The Second DCA considered the arguments, the prerequisites for bringing a statutory bad-faith action against Frontline, and the case law. Fortune & Domin contended that the trial court erred in concluding that Frontline cured the CRN merely by invoking the appraisal process and then paying the appraisal award outside the sixty-day cure period of section 624.155(3)(d). Frontline asserted that: “when the CRN does not state the amount necessary to cure the alleged bad faith, its invocation of the appraisal process (within the 60-day cure period) constituted a corrective action within the meaning of section 624.155(3)(d).” Such action, according to Frontline, mooted the bad-faith claim.

The Second DCA found no requirement that the CRN state a specific cure amount. See § 624.155(3)(b);  Hunt v. State Farm Fla. Ins. Co., 112 So. 3d 547, 548 (Fla. 2d DCA 2013). It further relied on the Florida Supreme Court’s reasoning in  Vest v. Travelers Ins. Co., 753 So. 2d 1270, 1275 (Fla. 2000) that “The insurer then has sixty days in which to respond [to the CRN] and, if payment is owed on the contract, to cure the claimed bad faith by paying the benefits owed on the insurance contract.” 753 So. 2d at 1275. Thus, the Second DCA concluded when payment is owed, the cure is paying the benefits owed; engaging the appraisal process and paying benefits outside of the 60-day cure period will not suffice to cure the CRN and defeat the bad-faith claim.

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