Court Opinion

ID: 9948145
Source: CourtListenerOpinion
Date Created: 2024-03-06 16:06:12.850555+00
Date Added: 2024-06-11T14:29:12.285759
License: Public Domain

Third District Court of Appeal
                               State of Florida

                         Opinion filed March 6, 2024.
       Not final until disposition of timely filed motion for rehearing.

                            ________________

                             No. 3D22-1109
                     Lower Tribunal No. 21-24502 CC
                           ________________

                         Alma Sanchez, et al.,
                                 Appellants,

                                     vs.

                Security First Insurance, Company,
                                  Appellee.

     An Appeal from the County Court for Miami-Dade County, Michael G.
Barket, Judge.

    Buell & Elligett, P.A., and Raymond T. Elligett, Jr., and Amy S. Farrior
(Tampa); Duboff Law Firm, and Kenneth R. Duboff, for appellants.

      Butler Weihmuller Katz Craig LLP, and Mihaela Cabulea (Tampa);
Gunster, Yoakley & Stewart, P.A., and Joseph W. Jacquot (Jacksonville), for
appellee.

      Link & Rockenbach, PA, and Kara Rockenbach Link and Daniel M.
Schwarz (West Palm Beach); William W. Large (Tallahassee), for Florida
Justice Reform Institute, as amicus curiae.
      Bressler, Amery & Ross, P.C., and Hope C. Zelinger and Lilian
Rodriguez-Baz (Fort Lauderdale), for First Protective Insurance Company
d/b/a Frontline Insurance, as amicus curiae.

Before SCALES, LINDSEY, and GORDO, JJ.

      PER CURIAM.

      Affirmed. See Cantens v. Certain Underwriters at Lloyd’s London, 49

Fla. L. Weekly D360, D362 (Fla. 3d DCA February 14, 2024) (“[B]ecause the

presuit notice requirement of section 627.70152(3), taken in context, is

procedural in nature, and applies to all policies, regardless of date of

inception, the trial court correctly dismissed the action without prejudice

pursuant to section 627.70152(5).”); Cole v. Universal Prop. & Cas. Ins. Co.,

363 So. 3d 1089, 1095 (Fla. 4th DCA 2023) (“[B]ecause the presuit notice

requirement of section 627.70152 applies retroactively as a procedural

provision, it applies to existing policies in effect at the time of enactment.”).

But see Hughes v. Universal Prop. & Cas. Ins. Co., 374 So. 3d 900, 910 (Fla.

6th DCA 2023) (“[W]e find that section 627.70152 is substantive and cannot

be applied retroactively to insurance policies issued before the statute’s

effective date.”).

                                       2
            Alma Sanchez, et al., v. Security First Insurance Company,
                                                              3D22-1109

     SCALES, J., specially concurring.

     Because this panel is bound by the recent holding of another panel of

this Court in Cantens v. Certain Underwriters at Llyod’s London, 49 Fla. L.

Weekly D360, 2024 WL 591695 (Fla. 3d DCA Feb. 14, 2024),1 we are

compelled to affirm the trial court’s June 9, 2022 order dismissing Sanchez’s

complaint “without prejudice and without leave to amend.” I, therefore,

concur in the result reached in this case, but I write to express my

disagreement with Cantens, which followed the Fourth District’s decision in

Cole v. Universal Property & Casualty Insurance Co., 363 So. 3d 1089 (Fla.

4th DCA 2023).

     I.      Section 627.70152

     The issue in this case, as it was in Cantens and Cole, is whether the

Legislature’s new statutory condition precedent to an insured’s right to sue

the property insurer for an alleged breach of the insurance contract may

apply to an existing insurance policy without running afoul of Florida’s

1
 A panel of this Court is bound by a holding of a prior panel and only the
Court sitting en banc may recede from the decision of the prior panel. See
Nat’l Med. Imaging, LLC v. Lyon Fin. Servs., 347 So. 3d 63, 64 (Fla. 3d DCA
2020).

                                     3
prohibition on impairment with contracts.2 In 2021, the Legislature enacted

the new condition precedent, section 627.70152 of the Florida Statutes,

which, among other things, requires that, at least ten days prior to filing suit

against the insurer, an insured must provide notice to the Florida Department

of Financial Services of the insured’s intent to initiate litigation against the

insurer. The insured’s notice must state, with specificity, all of the following

information:

           1. That the notice is provided pursuant to section
      627.70152.

            2. The alleged acts or omissions of the insurer giving rise
      to the suit, which may include a denial of coverage.

2
  Courts apply a two-part test to determine whether a statute can apply
retroactively: “(1) whether the statute itself expresses an intent that it apply
retroactively; and, if so, (2) whether retroactive application is constitutional.”
Old Port Cove Holdings, Inc. v. Old Port Condo. Ass’n One, Inc., 986 So. 2d
1279, 1284 (Fla. 2008). I agree with the determination in both Cole and
Cantens that the Legislature intended for the new provision to apply to
existing policies, thus meeting the test’s first part. In my view, the new statute
fails the test’s second part, that is, whether retroactive application is
constitutional. Art. 1, § 10, Fla. Const. The Florida Constitution prohibits a
legislative enactment from impairing existing contractual obligations. A
legislative enactment cannot be applied retroactively “if the statute impairs a
vested right, creates a new obligation, or imposes a new penalty.” See
Menendez v. Progressive Exp. Ins. Co., 35 So. 3d 873, 877 (Fla. 2010);
Hughes v. Universal Prop. & Cas. Ins. Co., 374 So. 3d 900, 910 (Fla. 6th
DCA 2023) (holding that section 627.70152 does not apply retroactively
“both because the statute does not include clear evidence of intent for the
statute to apply retroactively and because the statute is substantive and
cannot constitutionally be applied retroactively”).

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           3. If provided by an attorney or other representative, that a
      copy of the notice was provided to the claimant.

           4. If the notice is provided following a denial of coverage,
      an estimate of damages, if known.

            5. If the notice is provided following acts or omissions by
      the insurer other than denial of coverage, both of the following:
          a. The presuit settlement demand, which must itemize the
      damages, attorney fees, and costs.
            b. The disputed amount.
§ 627.70152(3)(a), Fla. Stat. (2021).

      Under the new legislation, a trial court is required to dismiss any first-

party lawsuit filed by an insured who has not complied with the notice

requirement, which means that a plaintiff’s noncompliance cannot be cured

by compliance, followed by amending the plaintiff’s lawsuit. § 627.70152(5),

Fla. Stat. (2021).3

      II.   Retroactive Application of Section 627.70152

3
  Indeed, it is because of section 627.70152(5)’s dismissal penalty that we
have appellate jurisdiction to review the subject order. Normally, an order
dismissing a complaint without prejudice is not appealable. See Liebman v.
Miami-Dade Cnty. Code Compliance Office, 54 So. 3d 1043, 1045 (Fla. 3d
DCA 2011). But a “without prejudice” dismissal order, such as the one
challenged here, that requires a plaintiff to re-file a new lawsuit, rather than
merely to re-file an amended complaint in the existing lawsuit, is appealable.
See U.S. Bank Nat’l Ass’n v. Rodriguez, 206 So. 3d 734, 736 (Fla. 3d DCA
2016).

                                        5
        Ms. Sanchez and Security First did not include in their bargained-for

insurance contract the detailed notice now mandated by the statute, nor did

they contract for the statute’s mandatory dismissal penalty associated with

the statute’s new requirements. Hence, consistent with the constitutional

prohibition on contract impairment, we may apply the statute’s new condition

precedent to the parties’ existing insurance contract only if we determine that

the statute’s new requirements do not affect the parties’ substantive rights.

Menendez, 35 So. 3d at 875.

      In determining that the new notice requirement can be constitutionally

grafted into existing insurance contracts, Cole merely concludes that the

insured’s “rights and obligations are unchanged by the addition of [the

statute’s] presuit notice provision. . . .” Cole, 363 So. 3d at 1093. Cantens

concludes that the new statute “does not impose any new punishments or

penalties that substantively impact an insured’s ability to recover[.]” Cantens,

49 Fla. L. Weekly at D362. I strongly disagree with these conclusions. A

provision affects a parties’ substantive rights, and cannot be retroactively

applied, if it either creates significant new obligations or imposes new

penalties. Menendez, 35 So. 3d at 877. This new statute does both.

      The new notice requirements mandated by the statute plainly create

new substantive obligations on a policyholder. The statute significantly

                                       6
burdens an insured with a new pre-suit obligation that effectively requires the

insured to adjust his own claim. Before an insured can bring an action against

an insurer alleging that the insurer has breached the insurance contract by

underpaying a claim, the insured must specifically itemize the insured’s

damages and attorneys’ fees and costs, and calculate, presumably with

specificity, the disputed amount. Because insurers no doubt will vigorously

cross-examine    insureds    regarding    discrepancies   between    amounts

demanded at trial and amounts contained in the pre-suit notice, these

calculations cannot be approximations. Presumably, if at any time during the

proceedings, discrepancies arise between an insured’s actual damages and

those contained in the pre-suit notice, insurers will seek dismissal of the

insured’s lawsuit for failure to comply with the new statute’s itemization

requirement. From a practical perspective, compliance with the statute’s

pre-suit itemization requirement adds a significant, substantive, and

expensive pre-suit burden on an insured trying to enforce contractual rights.

      The new statute also imposes a new penalty – dismissal of the

insured’s lawsuit – for noncompliance with the statute’s notice requirement.

As mentioned earlier, section 627.70152(5)’s mandatory dismissal penalty

requires the trial court to dismiss the lawsuit without prejudice; the statute

does not allow a trial court the discretion to dismiss a complaint, with leave

                                      7
to amend following compliance with the new statute. Hence, in order to sue

his insurer, a policyholder whose lawsuit has been dismissed under section

627.70152(5), must comply with the statute’s notice requirements and then

re-file his lawsuit (paying the associated filing fees) and again serve process

on the insurer (paying those associated costs). Cantens characterizes this

penalty as not “substantively impact[ing] an insured’s ability to recover, as

the action may be refiled[.]” Cantens, 49 Fla. L. Weekly at D362.          But

Cantens’s conclusory holding in this regard provides little solace to a low-

income policyholder forced to again incur filing and service of process fees,

or worse, to a policyholder whose lawsuit has suffered section

627.70152(5)’s mandatory suit dismissal after the expiration of the statute of

limitations, and therefore, cannot re-file. It would seem that the remedies

available to such a policyholder are nonexistent.

      III.   Conclusion

                                      8
        It bears noting that virtually every pre-Cole federal case4 and, most

recently, our sister court’s Hughes case,5 hold that section 627.70152’s new

notice requirement cannot, consistent with Florida’s prohibition on contract

impairment, be applied to existing insurance contracts. While the statute’s

new requirements may very well be good public policy, I agree with the

reasoning uniformly expressed in those pre-Cole opinions and by the

Hughes Court: section 627.70152’s notice requirements impose new

substantive    burdens    on   policyholders,   and   therefore,   cannot   be

constitutionally applied to existing insurance policies.

4
  See e.g., Oceana III Condo. Ass’n v. Westchester Surplus Lines Ins. Co.,
658 F. Supp. 3d 1177,1183 (S.D. Fla. 2023) (holding that section 627.70152
cannot be applied retroactively because it “substantively alters an insurer’s
obligation to pay and an insured’s right to sue under contract”) (quoting
Rosario v. Scottsdale Ins. Co., No. 21-24005-Civ, 2022 WL 196528, at *1
(S.D. Fla. Jan. 21, 2022)); Dozois v. Hartford Ins. Co. of the Midwest, 595 F.
Supp. 3d 1204, 1207-08 (M.D. Fla. 2022); Williams v. Foremost Prop. & Cas.
Ins. Co., 619 F. Supp. 3d 1161, 1166 (M.D. Fla. 2022); Villar v. Scottsdale
Ins. Co., No. 22-cv-21362, 2022 WL 3098912, at *4 (S.D. Fla. Aug. 4, 2022);
Hershenhorn v. Am. Home Assurance Co., No. 2:21-Cv-897-JES-MRM,
2022 WL 3357583, at *2 (M.D. Fla. Aug. 15, 2022); see also O'Kelley v.
Lexington Ins. Co., No. 1:22-CV-21218, 2022 WL 17583683, at *3-4, 2022
(S.D. Fla. Sept. 16, 2022) (Magistrate’s Report and Recommendation).
5
    Hughes, 374 So. 3d at 907-10.

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