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Fla. L. Weekly D2226aTop of Form

Insurance
— Bad faith — Insured’s action against insurer — Condition precedent —
Civil remedies notice — Trial court erred by entering final summary judgment
in favor of insurer on ground that insured did not timely send CRN as required
by statute and therefore could not maintain its bad faith cause of action where
record undisputedly established that insurer received insured’s CRN nearly four
years before bad faith suit was filed and responded to the CRN without
challenging its service

EVERGREEN LAKES HOA, INC.,
Appellant, v. LLOYD’S UNDERWRITERS AT LONDON, A/K/A UNDERWRITER’S AT LLOYD’S,
LONDON, Appellee. 4th District. Case No. 4D16-2657. October 18, 2017. Appeal
from the Circuit Court for the Seventeenth Judicial Circuit, Broward County;
Barbara McCarthy, Judge; L.T. Case No. CACE 06-19403 (21). Counsel: Nancy A.
Lauten and George A. Vaka of Vaka Law Group, P.L., and Kelly L. Kubiak of
Merlin Law Group, Tampa, for appellant. Patrick E. Betar, William S. Berk and
Melissa M. Sims of Berk, Merchant & Sims, PLC, Coral Gables, for appellee.

(BUCHANAN, LAURIE E., Associate
Judge.) Evergreen Lakes HOA, Inc. (“Evergreen”) appeals the trial court’s entry
of final summary judgment in favor of Lloyd’s Underwriters at London a/k/a
Underwriter’s at Lloyd’s London (“Underwriters”) in Evergreen’s bad faith
lawsuit against Underwriters. The trial court found that Evergreen did not
timely send Underwriters a Civil Remedies Notice (“CRN”) as required by section
624.155(3), Florida Statutes (2006) and, therefore, could not maintain its bad
faith cause of action. Because the record undisputedly establishes that
Underwriters received Evergreen’s CRN nearly four years before Evergreen filed
its bad faith suit and responded to the CRN without challenging its service, we
reverse and remand.

This case stems from an insurance
claim made by Evergreen after its property sustained damage in 2005’s Hurricane
Wilma. Evergreen became dissatisfied with Underwriters’ handling of its claim
and drafted a CRN on the form provided by the Florida Department of Financial
Services (“DFS”) in July of 2006. Evergreen mailed a copy of the CRN to DFS and
claims to have also mailed a copy to Underwriters at its address as identified
in DFS’s insurer database. DFS accepted the CRN as of August 15, 2006 and sent
out a notice providing that “the sixty (60) day time period required by Florida
Statutes 624.155(3)(a) began to run as of the date of acceptance.” Underwriters
replied to the CRN before the sixty day time period lapsed and in its response,
challenged the sufficiency of the CRN. Underwriters did not, however, raise any
issues with the service of the CRN or otherwise challenge the DFS acceptance
date of August 15, 2006.

Nearly four years later, Evergreen
sued Underwriters for bad faith. Evergreen’s bad faith claim was abated for
several more years pending resolution of Evergreen’s underlying breach of insurance
policy claim. The bad faith litigation eventually resumed in 2013 and
subsequent discovery revealed that the address Evergreen sent its CRN to may
not have been Underwriters’ correct address. However, it also established that,
at the latest, Underwriters’ counsel was in receipt of the CRN by October 2,
2006. Nonetheless, Underwriters moved for summary judgment, arguing that
Evergreen could not prove that Underwriters received the CRN on or before the
DFS acceptance date and therefore, Evergreen’s bad faith claim was precluded.
The court agreed with Underwriters and entered summary judgment in its favor.
We review the court’s entry of summary judgment de novo. Volusia Cty. v.
Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000).

Prior to 1982, an insured in Florida
had no common law cause of action for bad faith against its insurer and was
instead confined to breach of contract damages. Talat Enters., Inc. v. Aetna
Cas. & Sur. Co., 753 So. 2d 1278, 1281 (Fla. 2000). This changed upon
the Legislature’s adoption of section 624.155, the civil remedy statute of the
Florida Insurance Code. Id. Now, an insured may, among other reasons,
sue its insurer for “not attempting in good faith to settle claims when, under
all the circumstances, it could and should have done so, had it acted fairly
and honestly toward its insured and with due regard for her or his interests.”
§ 624.155(1)(b)1., Fla. Stat. (2006).

As a condition precedent to an
insured filing such a suit, however, “the department and the authorized insurer
must have been given 60 days’ written notice of the violation.” §
624.155(3)(a), Fla. Stat. (2006). Because there was no first-party common law
cause of action for bad faith before the enactment of section 624.155, the
Florida Supreme Court has instructed that this notice condition “must be
strictly construed.” Talat, 753 So. 2d at 1283. To that end, the statute
provides that the notice must “be on a form provided by the department” and
must specify the following:

1. The
statutory provision, including the specific language of the statute, which the
authorized insurer allegedly violated.

2. The
facts and circumstances giving rise to the violation.

3. The
name of any individual involved in the violation.

4.
Reference to specific policy language that is relevant to the violation, if
any. If the person bringing the civil action is a third party claimant, she or
he shall not be required to reference the specific policy language if the
authorized insurer has not provided a copy of the policy to the third party
claimant pursuant to written request.

5. A
statement that the notice is given in order to perfect the right to pursue the
civil remedy authorized by this section.

§ 624.155(3)(b), Fla. Stat. (2006).

In 2006, the statute did not contain
any guidance as to how (e.g. via email, certified mail, etc.) the insurer must
be “given” the CRN.1 However, the statute did clarify that
the CRN is meant to serve as an opportunity for the insurer to cure the alleged
violation and thereby avoid civil litigation. § 624.155(3)(d), Fla. Stat.
(2006) (“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.”).

Here, there is no dispute that both
DFS and Underwriters were “given” a copy of Evergreen’s CRN, which was on the
form provided by DFS, more than 60 days before Evergreen filed its bad faith suit.
Indeed, Underwriters had almost four years to cure the alleged violation before
it was sued for bad faith. Underwriters acknowledges this fact, but argues that
summary judgment was still appropriate because, due to Evergreen’s mailing
error, it did not have the benefit of the full 60 day cure period as governed
by the DFS acceptance date. Even if we were to construe section 624.155 as
requiring that the insurer be “given” a copy of the CRN on or before the DFS
acceptance date, Underwriters waived compliance with any such requirement by
responding to the CRN within 60 days of the DFS acceptance date without
challenging its timely receipt of the CRN. See, e.g., Ingersoll v.
Hoffman, 589 So. 2d 223, 224 (Fla. 1991) (holding that “failure to comply
with the prelitigation notice requirements of [the medical malpractice statute]
may be excused by a showing of estoppel or waiver” even though “[t]he presuit
notice and screening requirements of [the statute] represent more than mere
technicalities”); Schumacher v. Town of Jupiter, 643 So. 2d 8, 9 (Fla.
4th DCA 1994) (holding that although “strict compliance with statutory notice
requirements [for amending a zoning ordinance] is mandatory and jurisdictional,
a contesting landowner may waive the right, or be estopped, to assert a defect
in the notice if that landowner appeared at the hearing and was able to fully
and adequately present any objections to the ordinance”).

Based on the foregoing, we hold that
the court erred in granting Underwriters’ motion for summary judgment based on
its lack of proper notice argument. Accordingly, we reverse and remand for
further proceedings consistent with this opinion.

Reversed and remanded. (WARNER and LEVINE, JJ., concur.)

__________________

1In 2009,
DFS created an administrative rule requiring CRNs to be electronically
submitted through DFS’ website. Fla. Admin. Code R. 69J-123.002 (2009).

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