USA – FLORIDA Trends and Developments Contributed by: John David Dickenson, Tiffany Bustamante and Alexandra Schultz, Cozen O’Connor
tion that it was without liability to Eason and Creamer for any amount above the policy limits. DGIC argued that it was not liable because it tendered the policy limit 23 days after the accident, well within the 90-day safe harbour. Indeed, Section 30 of HB 837, through which the amendments were enacted, clearly states that the act applies to causes of action filed after 24 March 2023. However, HB 837 Section 29 states that “This act shall not be construed to impair any right under an insurance contract in effect on or before the effective date of this act. To the extent that this act affects a right under an insurance contract, this act applies to an insurance contract issued or renewed after the effective date of this act”. Because the policy was issued before 24 March 2023, Eason argued that the 90-day safe harbour did not apply. The court sided with DGIC. It explained that Eason’s right to sue DGIC for bad faith accrued upon entry of judgment on 17 August 2023, which was after the statute’s effective date of 24 March 2023. Under Flor- ida law, a cause of action for bad faith accrues when the insured is legally obligated to pay a judgment that is in excess of the policy limits. The court disagreed that a bad faith failure to settle claim was a contrac- tual right contemplated by Section 29, particularly because Eason was not even an insured under the policy. Regardless, the court explained that even if Eason’s “right” to sue DGIC for bad faith can be con- strued as a contractual right contemplated by Section 29, this “right” did not arise until after 24 March 2023. Thus, there was no impermissible retroactive applica- tion of the law. The Creamer ruling is consistent with other federal courts who have ruled on the same issue, such as Oxo - nian v GEICO Gen. Ins. Co. , No 8:24-CV-1351-MSS- AAS, 2025 WL 555621 (M.D. Fla. Jan. 3, 2025); Dial v GEICO Gen. Ins. Co. , No 8:23-CV-1650-VMC-TGW, 2024 WL 3470363, at *10 n.1 (M.D. Fla. July 19, 2024); and Chambers v Progressive Select Ins. Co. , No 6:24-cv-141-JSS-DCI, 2025 WL 1665722 at *1 (M.D. Fla. June 12, 2025). Similar issues have arisen in the first party context. Section 624.1551, as amended on 16 December 2022, states that “in any claim for extracontractual damages under s. 624.155 (1)(b), no action shall lie
until [1] a named... insured... has established through an adverse adjudication by a court of law that the property insurer breached the insurance contract and [2] a final judgment or decree has been rendered against the insurer. Acceptance of an offer of judg- ment under s. 768.79 or the payment of an appraisal award does not constitute an adverse adjudication under this section. The difference between an insur- er’s appraiser’s final estimate and the appraisal award may be evidence of bad faith under s. 624.155 (1)(b), but is not deemed an adverse adjudication under this section and does not, on its own, give rise to a cause of action”. This provision was examined in In re Portofino Condo. Hurricane Sally Bad Faith Litig. , No 3:25CV52-TKW- HTC, 2025 WL 1927500 (N.D. Fla. July 14, 2025). There, a group of condominium associations insured under a tower of coverage made a claim for damage following Hurricane Sally in 2020. Certain of the insur- ers made payments, but the associations disputed the damages and demanded appraisal. The award was issued in several parts from February to July 2023. Following the first portion of the award in February 2023, the defendant insurers paid their policy limits, but not interest, attorney’s fees or costs. In September 2024, the associations filed suit against the insurers, seeking bad faith damages under Section 624.155 (1) (a) and (1)(b). The court granted the insurers’ motion to dismiss the associations’ claims brought pursuant to Section (1) (b), finding that because the insurers paid their portion of the appraisal award before a court rendered a final judgment or decree finding that the insurers breached the insurance policy. It is noted that “the upshot of § 624.1551 is that an insured can no longer assert a bad faith claim under § 624.155 (1)(b) if the insurer pays the appraisal award before a court has rendered a final judgment or decree finding that the insurer breached the insurance policy” (id at *5). The associations argued that application of 624.1551 constituted an impermissible retroactive application of the law because the underlying claim involved 2020 policies and a 2020 date of loss. The court disagreed, explaining that the determinative point in time sepa- rating prospective from retroactive application of an
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