The Florida Legislature was busy in 2021 and 2022, passing the most sweeping insurance reform bills in history which severely limited policyholders' rights. Believing insurance litigation—not internal insurance company mismanagement—to be the cause of the current insurance crisis in Florida (collapsing companies and skyrocketing premiums), the new legislation placed significant restraints on a policyholder's ability to sue their insurance company when it refused to pay their claims in full. Likely the most important of these rights was the policyholder's ability to have their insurance company pay their attorney's fees if they were successful in litigation, rather than having to pay these fees upfront, which the typical homeowner simply cannot do. Effective January 1, 2023, Senate Bill (“SB”) 2A removed a policyholder's right to recover their attorney's fees from their insurance company. But, the new law begged the question:
The Question: Do the New Laws Apply to Policies Already In Existence?
SB 2A created more questions than it answered, the primary being: When will the attorney's fee removal take effect? For all suits filed after January 1, 2023? Or, just insurance policies issued after January 1, 2023? Thankfully, Florida's Fourth District Court of Appeal (“DCA”) recently answered that question in favor of policyholders, explaining SB 2A's January 1, 2023 removal of attorney's fees cannot be applied retroactively to policies issued in 2022. We stay on top of changes and interpretations of the law like this so we can keep you informed and aware of your rights. Here's what you need to know about the Fourth DCA's recent opinion affecting policyholders' rights to attorney's fees:
Cole v. Universal Prop. & Cas. Ins. Co., 2023 WL 3214643 (Fla. 4th DCA 2023) – The Facts
Cole had to sue his insurance company, Universal Property & Casualty, for breach of contract over damage his home sustained that was covered by insurance but that Universal refused to pay. The trial court, however, dismissed Cole's lawsuit for failure to comply with one of the new Florida property laws signed in 2021—Senate Bill 76—which went into effect July 1, 2022 and put a new restraint on policyholders requiring them to file a pre-suit notification, which grants their insurance company a 10-day opportunity to essentially “right their wrong” by reinspecting and then accepting or denying coverage, before the policyholder can then file an actual lawsuit.
Before Senate Bill (“SB”) 76, a homeowner could simply file suit. No pre-suit notice was required. However, SB 76 explicitly states any suit filed after its effective date that does not comply with the pre-suit notice is subject to dismissal. Cole took the matter up on appeal to argue the pre-suit notice requirement could not be applied retroactively—i.e., to his policy which was issued before the law's effective date of July 1, 2022. Universal argued it must be applied to any lawsuit filed after July 1, 2022 regardless of the date the policy was issued.
The Issue: Could the Pre-Suit Notice Requirement of SB 76 Be Applied Retroactively to Policies Issued Before Its Effective Date? YES
As the Fourth DCA explained in Cole, whether a new statute can apply retroactively depends on whether the right impacted is substantive—it creates duties and rights—as opposed to merely procedural—its sets out the means or methods by which those rights are enforced. The Cole court found the pre-suit notice requirement in SB 76 was merely procedural, i.e., requiring pre-suit notice be provided before a lawsuit against an insurance company can be filed. However, of importance to our clients, and attorneys like us who represent policyholders against their insurance companies, the more important aspect of Cole was the court's finding with respect to the legislature's recent changes removing a policyholder's ability to recover attorney's fees.
The More Important Question: Can the New Laws Removing Attorney's Fees Be Applied Retroactively to Policies Issued Before Its Effective Date? NO
Cole also analyzed whether a statute affecting rights to attorney's fees could be applied retroactively to policies issued before its effective date and answered this question, thankfully, with a resounding “No.” While the court found SB 76's substantive impact on attorney's fees could be separated from its procedural impact on filing requirements—allowing retroactive application to the procedural elements of the statute but not the substantive ones—the court reaffirmed what our attorneys had researched and believed to be true about the legislature's more recent SB 2A, effective January 1, 2023, which removed a policyholder's right to recover attorney's fees in an insurance property dispute. i.e. that it could not be applied retroactively to insurance policies issued prior to its effective date of January 1, 2023. Specifically, the court in Cole held the “statutory right to attorneys' fees is not a procedural right, but rather a substantive right[.]” Cole v. Universal Prop. & Cas. Ins. Co., 2023 WL 3214643, *4 (Fla. 4th DCA 2023) (citing Menendez v. Progressive Express Ins. Co., 35 So. 3d 873, 878 (Fla. 2010). Accordingly, such statutes are “not able to be applied retroactively.” Cole, 2023 WL 3214643, *4.
How The Cole Ruling Impacts You
This ruling will have a significant impact on any lawsuits filed based on insurance policies issued prior to 2023. This will include claims arising out of Hurricanes Michael, Sally, and—most importantly—Hurricane Ian as all Ian lawsuits will arise out of policies issued in 2022, before the effective date of SB 2A which removed attorney's fees, with almost all the resulting lawsuits being filed after the effective date of SB 2A: January 1, 2023.
If you or someone you know is struggling to get paid in full on a claim arising out of Hurricane Michael, Sally, or Ian, the Cole opinion supports a finding that you still have the ability to recover your attorney's fees if you have to sue your insurance company to recover the compensation you are owed. Often litigation is the only way to get an obstinate, nonresponsive insurance company to take notice and finally offer its policyholders the full amount they are due. That's where our experienced hurricane insurance attorneys come in. We never charge any fee or cost or require any obligation to simply review your claim and answer your questions. We're here to help and keep you informed of your rights. If you have a question about a hurricane or property damage claim, contact us today.