IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FIFTH DISTRICT

NOT FINAL UNTIL TIME EXPIRES TO

 FILE MOTION FOR REHEARING AND

DISPOSITION THEREOF IF FILED

SANDRA BARTON AND GREGORY 

BARTON,

Appellants,

v. Case No. 5D15-1587

CAPITOL PREFERRED INSURANCE 

COMPANY, INC.,

Appellee.

________________________________/

Opinion filed December 9, 2016

Appeal from the Circuit Court 

for Marion County,

Lisa D. Herndon, Judge.

James J. Dye, Orlando, and Nicholas A. 

Shannin and Pamela R. Masters, of 

Shannin Law Firm, P.A., Orlando, for 

Appellants.

Brandon S. Vesely and Nicole M. Ziegler, 

of Keane, Reese, Vesely & Gerdes, P.A., 

St. Petersburg, for Appellee.

EVANDER, J.

Sandra and Gregory Barton appeal the final summary judgment entered in favor 

of Capitol Preferred Insurance Company, Inc., on the Bartons’ first-party bad-faith

complaint. In granting Capitol’s motion for summary judgment, the trial court found that 
2

by accepting Capitol’s proposal for settlement on their underlying breach of contract claim 

for an amount less than the policy limits, the Bartons had failed to obtain a determination 

of liability or the extent of their damages. We disagree and, accordingly, reverse. 

Capitol provided homeowners’ insurance to the Bartons from April 28, 2003,

through 12:01 a.m., April 28, 2011. The homeowners’ policy included sinkhole coverage

up to policy limits of $312,000. Capitol did not renew the Bartons’ policy after April 28, 

2011, and the Bartons then obtained homeowners insurance with Universal Property and 

Casualty Insurance Company, effective from April 28, 2011 through April 28, 2012. Within 

two weeks of obtaining insurance with Universal, the Bartons noticed damage to the walls 

and floor of their home. They filed a claim for sinkhole-related damages with Universal. 

Universal denied the claim, determining that the damage occurred prior to the effective 

date of its policy. Thereafter, by letter dated October 7, 2011, the Bartons, through their 

attorney, submitted a claim and request for sinkhole testing to Capitol, pursuant to section 

627.707, Florida Statutes (2011).

1

 The Bartons did not provide a date of loss in their 

claim. Capitol denied the claim by letter dated October 17, 2011. In its letter, Capitol 

identified the date of loss as “Unknown” and stated that it could not process any claim 

payments because the policy was not renewed on April 28, 2011. The letter also stated, 

“However, if you believe you have documentation which confirms that the incident 

occurred within the policy effective period, please forward it to this office for review.” 

 

1 Section 627.707 sets forth an insurer’s obligation to investigate sinkhole claims. 

Among other things, once an insurer receives a sinkhole claim for a covered building, the 

insurer must inspect the premises for structural damage that may have resulted from 

sinkhole activity and engage a professional engineer or geologist to conduct testing if the 

cause of damage cannot be ascertained or is consistent with sinkhole activity. § 

627.707(1)-(2), Fla. Stat. (2011).
3

The Bartons filed a breach of contract action against both Capitol and Universal in 

August 2012. Subsequently, Universal retained Ground Down Engineering (“GDE”) to 

perform sinkhole testing. GDE issued a report on January 8, 2013, determining that “the 

cracks and separations within and on the exterior of the Barton residence are likely the 

result of soil movement associated with sinkhole activity.” GDE estimated the cost of 

repairs would be between $129,220 and $146,220. The Bartons settled their breach of 

contract action with Universal for an undisclosed amount, but continued to pursue their 

action against Capitol. 

In March 2013, pursuant to section 624.155, Florida Statutes (2013),

2

the Bartons 

filed a “Civil Remedy Notice of Insurer Violation” with the Florida Department of Insurance. 

 

2 Section 624.155, Florida Statutes (2013), provides, in pertinent part:

624.155 Civil remedy.—

(1) Any person may bring a civil action against an 

insurer when such person is damaged:

. . . .

(3)(a) As a condition precedent to bringing an 

action under this section, the department 

and the authorized insurer must have been 

given 60 days' written notice of the violation. 

If the department returns a notice for lack of 

specificity, the 60-day time period shall not 

begin until a proper notice is filed.

(b) The notice shall be on a form provided by the 

department and shall state with specificity 

the following information, and such other 

information as the department may require:

1. The statutory provision, including the 

specific language of the statute, which 

the authorized insurer allegedly violated.
4

 

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.

. . . .

(d) 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.

(e) The authorized insurer that is the recipient of 

a notice filed pursuant to this section shall 

report to the department on the disposition of 

the alleged violation.

. . . .

(4) Upon adverse adjudication at trial or upon appeal, 

the authorized insurer shall be liable for damages, 

together with court costs and reasonable 

attorney's fees incurred by the plaintiff.

. . . .

(8) The civil remedy specified in this section does not 

preempt any other remedy or cause of action 

provided for pursuant to any other statute or 
5

Section 624.155 of the Florida Insurance Code,

3

requires insureds to file a civil remedy 

notice with the Department of Insurance (with a copy served on the insurer) as a condition 

precedent to bringing a bad-faith claim against an insurer. See § 624.155(1)(b), Fla. Stat. 

(2013). The notice must set forth the specific statutory provision the insurer allegedly 

violated, the facts giving rise to the violation, the relevant policy language, and a 

statement that the notice is given to perfect the right to pursue the civil remedy authorized 

by the statute. § 624.155(3)(b), Fla. Stat. (2013). If the insurer pays the damages or

corrects the violation within sixty days of the filing of the notice, then the insureds are 

precluded from filing a bad-faith claim. § 624.155(3)(a), (d), Fla. Stat. (2013).

In their civil remedy notice, the Bartons alleged that rather than perform a 

“complete, thorough and statutorily compliant sinkhole/subsidence investigation,” Capitol 

merely summarily denied the sinkhole claim, thereby placing its interests ahead of those 

of its insureds. The civil remedy notice further alleged that Capitol wrongly denied a valid 

claim. 

 

pursuant to the common law of this state. Any 

person may obtain a judgment under either the 

common-law remedy of bad faith or this statutory 

remedy, but shall not be entitled to a judgment 

under both remedies. This section shall not be 

construed to create a common-law cause of 

action. The damages recoverable pursuant to this 

section shall include those damages which are a 

reasonably foreseeable result of a specified 

violation of this section by the authorized insurer 

and may include an award or judgment in an 

amount that exceeds the policy limits.

3 The Florida Insurance Code is found at chapters 624-632, 634-636, 641-642, 

648, and 651 of the Florida Statutes (2013).
6

On April 5, 2013, Capitol responded to the civil remedy notice by denying all 

allegations. Approximately six months later, Capitol served the Bartons with a proposed 

settlement, pursuant to section 768.79, Florida Statutes (2013), offering to settle the 

Bartons’ claim for $65,000. Significantly, the proposal did not require the Bartons to 

execute a release or to expressly waive their right to pursue a bad-faith action against 

Capitol. The Bartons timely accepted Capitol’s proposal for settlement. Shortly 

thereafter, Capitol paid the Bartons $65,000, and the Bartons dismissed their breach of 

contract complaint. 

After settling the underlying action, the Bartons filed a first-party bad-faith action 

against Capitol, alleging that in handling the Bartons’ sinkhole claim, Capitol violated 

sections 624.155(1)(b) and 626.9541(1)(i)3,

4 Florida Statutes (2013), by, inter alia, failing 

 

4 Section 626.9541(1)(i)3., Florida Statutes (2013), provides:

626.9541 Unfair methods of competition and unfair or 

deceptive acts or practices defined.—

(1) Unfair methods of competition and unfair or 

deceptive acts.—The following are defined as 

unfair methods of competition and unfair or 

deceptive acts or practices:

. . . . 

(i) Unfair claim settlement practices.—

. . . .

3. Committing or performing with such frequency as to 

indicate a general business practice any of the 

following:

a. Failing to adopt and implement standards for the 

proper investigation of claims;
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b. Misrepresenting pertinent facts or insurance 

policy provisions relating to coverages at issue;

c. Failing to acknowledge and act promptly upon 

communications with respect to claims;

d. Denying claims without conducting reasonable 

investigations based upon available 

information;

e. Failing to affirm or deny full or partial coverage 

of claims, and, as to partial coverage, the dollar 

amount or extent of coverage, or failing to 

provide a written statement that the claim is 

being investigated, upon the written request of 

the insured within 30 days after proof-of-loss 

statements have been completed;

f. Failing to promptly provide a reasonable 

explanation in writing to the insured of the basis 

in the insurance policy, in relation to the facts or 

applicable law, for denial of a claim or for the 

offer of a compromise settlement;

g. Failing to promptly notify the insured of any 

additional information necessary for the 

processing of a claim; or

h. Failing to clearly explain the nature of the 

requested information and the reasons why 

such information is necessary.

i. Failing to pay personal injury protection 

insurance claims within the time periods 

required by s. 627.736(4)(b). The office may 

order the insurer to pay restitution to a 

policyholder, medical provider, or other 

claimant, including interest at a rate consistent 

with the amount set forth in s. 55.03(1), for the 

time period within which an insurer fails to pay 

claims as required by law. Restitution is in 

addition to any other penalties allowed by law, 

including, but not limited to, the suspension of 

the insurer's certificate of authority.
8

to properly investigate the Bartons’ claim and failing to act in good faith to settle that claim. 

Capitol filed an answer and affirmative defenses denying liability.5

Capitol filed a motion for summary judgment in December 2014. It alleged that it 

was entitled to judgment as a matter of law on the Bartons’ bad-faith claim because the 

Bartons failed to establish the necessary prerequisites to maintain such a claim against 

Capitol. Specifically, Capitol alleged that the Bartons failed to prove that: (1) the 

underlying breach of contract case had been resolved in their favor; and (2) there had 

been a determination of the “actual extent of [their] loss.” In support of summary 

judgment, Capitol submitted an affidavit from one of its claims supervisors, who averred 

that as a claims supervisor she oversaw all claims, evaluated liability, and made coverage 

decisions. According to her affidavit, Capitol never admitted liability for the Bartons’ claim 

and the proposal for settlement was made in an effort to dispose of litigation costs. The 

claims supervisor further averred that there had not been a determination of liability 

against Capitol, nor had there been a determination of the extent of the Bartons’ alleged 

damages. 

The Bartons filed a response in opposition to Capitol’s motion for summary 

judgment. They alleged that although a release was discussed, the parties ultimately 

agreed to a settlement without a release. Additionally, the Bartons’ posited that Capitol’s 

payment of $65,000 on the policy was a confession of judgment and constituted a 

determination of liability and damages. In support of their response, the Bartons filed the 

affidavits of the Bartons and their attorney. The trial court granted Capitol’s motion for 

 

5 Capitol also filed a counterclaim alleging that the Bartons had breached the 

settlement agreement by filing a bad-faith claim. 
9

summary judgment, stating that “a proposal for settlement does not equate to a 

determination of liability and the extent of damages.” The Bartons timely appealed the 

final summary judgment granted in favor of Capitol. 

A cause of action for an insurer’s failure to settle its insured’s claim in good faith 

does not accrue until and unless the insured’s underlying first-party action for insurance 

benefits is resolved favorably to the insured. Blanchard v. State Farm Mut. Auto. Ins. Co., 

575 So. 2d 1289, 1291 (Fla. 1991). Furthermore, a bad-faith action is premature until 

there is a determination of liability and extent of damages owed on the first-party 

insurance contract. Vest v. Travelers Ins. Co., 753 So. 2d 1270, 1276 (Fla. 2000). 

However, the Florida Supreme Court has specifically stated that the insured is not 

obligated to obtain the determination of liability and the full extent of his or her damages 

through a trial, but may do so by other means—such as a settlement: 

Certainly, the insured is not obligated to obtain the 

determination of liability and the full extent of his or her 

damages through a trial and may utilize other means of doing 

so, such as an agreed settlement, arbitration, or stipulation 

before initiating a bad faith cause of action.

Fridman v. Safeco Ins. Co. of Ill., 185 So. 3d 1214, 1224 (Fla. 2016). 

Here, Capitol’s payment of $65,000 constituted a favorable resolution for the 

Bartons. Cf. Ivey v. Allstate Ins. Co., 774 So. 2d 679, 684-85 (Fla. 2000) (holding that 

Allstate’s voluntary payment of additional monies after insured brought action to recover 

personal injury protection benefits operated as confession of judgment, thereby entitling 

insured to recover attorney’s fees). The settlement further served as a determination of 

liability and extent of the Bartons’ damages. See Fridman, 185 So. 3d at 1224 (stating 

that settlement may serve as determination of liability and full extent of insured’s 
10

damages); Brookins v. Goodson, 640 So. 2d 110, 112 (Fla. 4th DCA 1994), disapproved 

on other grounds, State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So. 2d 55, 62 (Fla. 1995)

(holding that insurer’s payment of policy limits pursuant to settlement of underinsured 

motorist claim established that insured had valid claim for underinsured motorist benefits 

for purpose of first-party bad-faith action against insurer). 

Capitol suggests that because it settled for an amount less than policy limits or the 

amount initially demanded by the Bartons, that there has been no determination of liability 

or extent of damages. We reject that argument. Section 624.155 authorizes an insured 

to bring a first-party bad-faith action where the insured has been damaged by the insurer’s 

failure to comply with certain enumerated statutory provisions. The statute does not 

condition the right to bring an action on the insured’s recovery of the policy limits or an 

amount equal to or greater than its initial demand in the underlying action. 

REVERSED AND REMANDED. 

LAWSON, C.J., and SCHUMANN, B.B., Associate Judge, concur.