Supreme Court of Florida Rules on Bad Faith Insurance Claims

Remember when we asked if you could name one lawyer in Florida who has tried a first party bad faith case as it relates to property damage?

After years of fighting to hold the insurance company accountable in the insured’s claim, underlying lawsuit, and lawsuit for bad faith statutory violations, and after the insurer forced years of extensive litigation over the amount recoverable for attorney’s fees, going as far as filing an appeal of the trial court’s Final Judgment awarding attorney’s fees and costs pursuant to Florida Statute §624.155 and/or §627.428, Struble, P.A. has obtained not only a per curiam affirmance of the Final Judgment but also an Order for appellate attorneys’ fees for the appeal.

This all started over eight years ago when on January 21, 2015, a pipe broke in an insured’s home, inundating the home with water until she returned home only to discover three inches of standing water saturating building materials and the tile flooring. The insured immediately reported the loss to her insurer, identifying damage throughout the property including to the tile flooring and personal property. On the same day, the insurer sent a company to perform water mitigation, which commenced on January 22, 2015, and building materials were removed leaving bear concrete floors in some rooms.  In need of somewhere to live, the insured requested additional living expenses (“ALE”) pursuant to her policy, which the insurer internally denied despite being aware coverage was triggered. The insurer later provided coverage for one week and then cut-off the coverage, informing the insured she had to move back into the property because there was an operable kitchen and bathroom. Despite having ALE coverage for up to 24 months, the insurer paid for just one week of ALE.

The insured hired a Public Adjuster, who sent the insurer an estimate of damages and again requested coverage for ALE.  The Public Adjuster also sent the insurer photographs showing that the company sent out by the insurer to perform mitigation services failed to dry out the property and left building materials wet for forty-three days causing further damage.

On April 16, 2015, the insured retained Struble, P.A., and a Civil Remedy Notice (“CRN”) was filed.  On April 21, 2015, the insurer issued an additional payment and a partial denial letter maintaining the denial of coverage for the tile flooring.

On April 19, 2015, Struble, P.A. filed a petition for declaratory relief to obtain a ruling as to coverage for the tile flooring. The court ultimately ordered the parties to proceed with appraisal, which the insurer delayed. After Struble, P.A. filed a Motion to Compel Appraisal and Enforce Court Order, the insurer named an appraiser. Ultimately, on January 14, 2016, an appraisal award was entered for a total of $53,131—significantly more than the insurance company’s initial adjustment of the claim.

On February 29, 2016, Struble, P.A. filed a bad faith lawsuit alleging that when the insurer adjusted the insured’s claim it violated statutory requirements of Fla. Stat. §624.155 and §626.9541. The insured alleged that the insurer violated Fla. Stat. §626.9541 by failing to adopt and implement standards for the proper investigation of claims, hires companies with the intent to avoid payments and coverages owed and issues low-ball payments unless the insured obtains representation to challenge the payment. The insured also alleged that the insurer refused to settle the claim or consider repairs for the flooring and ignored evidence establishing coverage. The insurer attempted to conceal that it had no guidelines to properly adjust claims by violating multiple court orders for years, secretly creating guidelines after the subject lawsuit, and testifying just two weeks before trial that the guidelines were in effect during the adjustment of the insurer’s claim.

A weeklong jury trial commenced on October 29, 2019. Among other things, it was revealed during the trial that the insurer owns the company it deployed to perform mitigation services, which the insurer concealed and represented was an independent company through years of litigation. It was also revealed after a question submitted by a juror that the company owned the general contracting company and adjusting company preparing the estimate in the insured’s claim—despite the insurer previously suggesting these companies were completely independent of the insurer.

On November 4, 2019, the jury entered a verdict in favor of the insured. The jury found that the insurer violated Fla. Stat. §626.9541 by failing to adopt and implement standards for the proper investigation of claim. On September 9, 2020, Final Judgment was entered.    

On November 19, 2019, the insured sought attorney’s fees for the bad faith lawsuit pursuant to Fla. Stat. §624.155. After the insurer’s multiple attempts to delay the hearing, on January 28, 2022, the fee hearing occurred. The insurer’s expert was the same attorney that represented the insurer in the claim, underlying lawsuit and lawsuit for statutory violations. The expert had never tried a bad faith case, could not identify another bad faith trial, and was not aware of any insurer being found by a jury to have committed a statutory violation in a first party bad faith claim. Still, the insurer’s expert described this case as a “simple case” (though he would not disclose the amount of hours and rejected the chance to dispute that his firm billed Defendant less than 400 hours in this litigation) while also admitting such cases are rare.

On August 4, 2022, the court entered a detailed Final Judgment awarding Struble, P.A. fees and costs and a multiplier. The court entered an Amended Final Judgment on October 4, 2022, adding the following two paragraphs to the Fee Judgment:

The Court considered in its calculations the “results obtained.” Plaintiff sued in one count and prevailed as to that one count. The multiple claimed violations were all alternative violations each seeking the same relief.

It appears that [the insurer] decided to “go to the mat” over the Plaintiff's relatively small claim. Having chosen to stand and fight over this claim, [the insurer], of course, made a business judgment for which it should have known a day of reckoning would come should it lose in the end. The insured's counsel did not inflate this small case into a larger one; its protraction resulted from the stalwart defense. Although defendants are not required to yield an inch or to pay a dime not due, they may by militant resistance increase the exertions required of their opponents and thus, if unsuccessful, be required to bear that cost. See State Farm Fire & Casualty Company v. Palma, 555 So. 2^nd 836 (Fla. 1990).

Further deciding to "go to the mat," insurer appealed the Final Judgment on October 18, 2022. Oral Argument occurred on July 25, 2023. You can watch the Oral Argument Here. Struble, P.A. also filed a motion to appellate attorney’s fees because, as detailed in its Answer Brief, the insurer forced extensive litigation over the amount recoverable for years and still has not paid event the amount it concedes is owed as reasonable attorney’s fees, because of the insurer’s delays, the bad faith statute, and because Struble, P.A. exposed a wrongful practice.

The Final Judgment was per curiam affirmed on October 3, 2023, and the motion for appellate fees was granted with the matter remanded to the trial court to determine the amount of attorney’s fees for the appeal. The trailblazing continues.

Matthew Struble of STRUBLE, P.A. has obtained many of the primary decisions setting forth the procedure for an insured to pursue a bad-faith claim against an insurer. Zaleski v. State Farm Florida Ins. Co., 315 So. 3d 7 (Fla. 4th DCA 2021) (establishing the validity of a CRN filed by STRUBLE, P.A.); Cooper v. Federated Nat’l Ins. Co., 285 So. 3d 1036 (Fla. 5th DCA 2019) (establishing jury instructions to be submitted in a bad-faith case).  The firm represents policyholders throughout the State of Florida, as well as other attorneys on a co-counsel basis, by handling the trials and appeals of insurance claims.