Procedural Introduction and Case Overview
Aileen Bailey (Homeowner) filed a first-party bad faith action against People’s Trust Insurance Company (People’s Trust) after her residence, covered by a policy with People’s Trust, suffered extensive water damage from a hurricane. People’s Trust acknowledged the claim but valued the damage at $4,457.53, below the $6,425 deductible, and elected to repair the property as per the policy terms. Dissatisfied with this assessment, Bailey filed a Civil Remedy Notice (CRN) alleging statutory violations.
People’s Trust responded to the CRN without addressing specific deficiencies, leading Bailey to pursue the bad faith claim. The trial court granted summary judgment in favor of People’s Trust, finding the CRN legally insufficient. Bailey appealed, arguing that People’s Trust waived its right to contest the CRN’s validity by not raising specific objections in its response.
Standard Rule for Ripening a Florida Bad Faith Claim
Under Florida law, a statutory bad faith claim against an insurer is ripe when three conditions are met:
1. There is a determination of the insurer’s liability for coverage.
2. The extent of the insured’s damages is established.
3. A Civil Remedy Notice (CRN) is filed with the Florida Department of Financial Services (DFS), providing the insurer 60 days to cure the alleged violation.
The CRN must specifically detail the facts and circumstances of the alleged violations, allowing the insurer an opportunity to address and rectify the issues within the 60-day period.
Court’s Review of Summary Judgment
In reviewing the grant of summary judgment, appellate courts apply a de novo standard. This means they consider the matter anew, as if no decision had been previously made. The key consideration is whether there is any genuine issue of material fact that would warrant a trial, or if the moving party is entitled to judgment as a matter of law.
Insurer Waived CRN Objections
The Fifth District Court of Appeal (DCA) reversed the trial court’s summary judgment ruling, determining that People’s Trust the insurer waived CRN objections by failing to raise specific objections in its response to the CRN within the Office of Insurance Regulation's web portal. Bay v. United Services Automobile Ass’n (insurer waived its right to contest CRN deficiencies by not specifying them in its response) Pin-Pon Corp. v. Landmark Am. Ins. Co. (technical defects in a CRN could not be grounds for dismissal if the insurer failed to raise them in its initial response). The court emphasized that by addressing the CRN on its merits without mentioning specific defects, People’s Trust effectively waived any claims of non-compliance with the statutory requirements. The court concluded that the trial court’s summary judgment was erroneous and remanded the case for further proceedings, allowing Bailey to pursue her bad faith action.
Conclusion
This case underscores the importance of insurers promptly and specifically addressing any perceived deficiencies in a CRN when responding. The Fifth DCA’s decision reflects a commitment to ensuring that procedural technicalities do not obstruct the substantive rights of policyholders to seek redress for alleged bad faith actions by insurers. By reversing the summary judgment, the court reinforced the principle that waiver of objections can occur if not properly and timely asserted.
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