Thursday, the Florida Supreme Court issued its opinion in Citizens Property Insurance Corp., v. Perdido Sun Condominium Association, Inc., considering the issue as to whether Citizens Property Insurance could be liable for First Party Bad Faith Claims. The Supreme Court determined that Citizens was not liable for such claims and that no exception for such claims existed from Citizens statutory immunity. This places Citizens in a different position, in regard to insureds, than other insurance carriers who may be offering similar property policies.
The issue in was whether the Legislature intended CitizensProperty Insurance Corporation, a state-created entity that provides property insurance, to be liable for statutory first-party bad faith claims as an exception to its statutory immunity from suit. The issue had come before the Supreme Court from the First District’s decision in Perdido Sun Condominium Ass’n v. Citizens Property Insurance Corp., 129 So. 3d 1210 (Fla. 1st DCA 2014), which had determined that the “willful tort” statutory exception to Citizens’ immunity applied to statutory first-party bad faith claims. The First District opinion was at odds with the Fifth District’s opinion in Citizens Property Insurance Corp. v. Garfinkel, 25 So. 3d 62 (Fla. 5th DCA 2009) which held that Citizens was statutorily immune. The First District certified a conflict between Districts and the Supreme Court took up the issue.
Additionally, the First District passed the following question, which it certified to be of great public importance, to the Supreme Court:
WHETHER THE IMMUNITY OF CITIZENS PROPERTY INSURANCE CORPORATION, AS PROVIDED IN SECTION 627.351(6)(s), FLORIDA STATUTES, SHIELDS THE CORPORATION FROM SUIT UNDER THE CAUSE OF ACTION CREATED BY SECTION 624.155(1)(b), FLORIDA STATUTES[,] FOR NOT ATTEMPTING IN GOOD FAITH TO SETTLE CLAIMS?
As noted above, the Supreme Court answered this question in the affirmative. The basis for the opinion was a review of the statutory exceptions to Citizens’ immunity. The Supreme Court found no support for the proposition “that the Legislature intended for Citizens to be liable for a breach of the duty to act in good faith by allowing its policyholders to bring a statutory first-party bad faith cause of action.” The Supreme Court then reviewed the listed exceptions. The Court noted that an exception to immunity was not provided and for the contrary, “the Legislature chose to immunize Citizens for ‘any action taken by [it] in theperformance of [its] duties or responsibilities under . . . subsection [627.351(6)(s)],’ which necessarily includes a breach of the duty of good faith.”
The opinion is not yet final as there could be motions for rehearing.