Changes to Florida Tort Laws

On March 24, 2023, Governor Ron DeSantis signed HB 837, changing Florida Tort and Bad Faith Laws. The bill repeals sections 627.428 and 626.9373, Florida Statutes, which previously entitled insureds to recover attorney fees in any lawsuit against their insurer where any recovery was awarded to the insured. The bill enacted Florida Statute Section 86.121- titled “Attorneys’ fees; action for declaratory relief to determine insurance coverage after total coverage denial.

 

Section 86.121 allows for a named insured, omnibus insured, or named beneficiary under a policy of insurance to collect attorney’s fees after rendition of a declaratory judgment in their favor after a carrier has completely denied coverage.

 

However, the statute specifically states that the right to attorney’s fees may not be transferred, assigned or acquired in any other manner by anyone other than the named insured, omnibus insured, or named beneficiary.

 

Therefore, the statute prevents an insured from assigning its right to attorneys’ fees to someone else. This effectively limits a plaintiff’s ability to recover attorney’s fees against a carrier by obtaining an assignment of the insured’s rights against the carrier. (i.e. after a Coblentz agreement).

 

Additionally, the statute specifically states that if a carrier provides a defense under a reservation of rights, that does not constitute a complete denial of coverage. Therefore, the statute will not apply to declaratory actions in which a carrier has provided a defense to its insured under a reservation of rights. 

 

The statute also specifically states that it will not apply to residential or commercial property insurance policies. 

 

Lastly, the statute states that either party is entitled to summary procedure under 51.011. Thus, Florida Statute 51.011 may apply to a dec action to determine insurance coverage after a total denial of the claim (except for residential and commercial property policies). Since either party is entitled to summary procedure, a carrier may invoke it, even if the insured does not wish to proceed under summary procedure.

 

Florida Statute 51.011 contains specific rules including rules on the time to respond to a complaint and regarding discovery. Under §51.011, an answer is required to be filed within 5 days of service of process and must include all defenses of law or fact. (“All defenses of law or fact shall be contained in defendant’s answer which shall be filed within 5 days after service of process.”) Additionally, under §51.011, the only discovery permitted without court order is depositions. Any other discovery and admissions can only be had by order of the court setting time for compliance.

 

Section 51.011 provides that, “Rules of procedure apply to this section except when this section or the statute or rule prescribing this section provides a different procedure.

 

Thus, Section 51.011 does not appear to change a parties’ right to file a motion for summary judgment, which is important in coverage actions as many coverage actions are resolved on summary judgment.

 

The bill’s strictures do not apply retroactively, so any case filed before March 24 will not be governed by the bill. 

 

Please contact our firm to discuss these issues further.