Florida First District Court of Appeal Holds Statutory Changes in Fla. Stat. 624.1551 Cannot Apply Retroactively to Causes of Action that Accrued Prior to the Change

By Kelly M. Vogt

In Cindy Vo v. Scottsdale Ins. Co., No. 1D2023-2228 (Fla.1st DCA Feb. 26, 2025), the First DCA held that the statutory changes in Fla. Stat. § 624.1551, which require “an adverse adjudication by a court of law that the property insurer breached the insurance contract and a final judgment or decree . . . rendered against the insurer,” cannot be applied retroactively to causes of action which accrued prior to the change.

The appellant, Cindy Vo, filed a claim with Scottsdale Insurance Company in 2020 for hurricane damage to her property. Scottsdale estimated the damage at $420.64, concluding there was no storm-related exterior damage causing the reported interior damage. Since this amount did not exceed the policy’s wind deductible, Scottsdale denied payment. Vo’s public adjuster later estimated damages at $38,584, prompting Scottsdale to engage an independent adjuster, who agreed with the initial assessment. Vo then filed a Civil Remedy Notice of Insurer Violations with the Florida Department of Financial Services, alleging breach of contract and bad faith claims handling. The dispute proceeded to appraisal, resulting in an award of $34,545.66, which Scottsdale paid after deducting the applicable hurricane deductible. The parties settled the case in 2021.

In March 2023, Vo filed a lawsuit seeking extracontractual damages under Florida’s bad faith insurance statutes, citing Scottsdale’s alleged unfair claims handling and statutory violations. Scottsdale moved to dismiss, arguing that a 2022 legislative amendment to § 624.1551 of the Florida Statutes required an “adverse adjudication” of contract breach before a bad faith claim could proceed. The trial court agreed and dismissed the case, ruling that Vo’s complaint failed to allege a court determination that Scottsdale had breached the contract or that a final judgment had been rendered against the insurer.

On appeal, the First District Court of Appeal analyzed whether § 624.1551 could be applied retroactively. The court noted that statutes are generally presumed to apply prospectively unless explicitly stated otherwise. While remedial legislation may sometimes apply retroactively, the Florida Supreme Court has ruled that statutes eliminating existing rights or imposing new legal burdens should not be retroactively applied. Scottsdale argued that the amendment was remedial because it aimed to reduce insurance costs in Florida, but the appellate court disagreed, reasoning that the statute effectively abolished a previously recognized cause of action.

Citing precedent from Menendez v. Progressive Exp. Ins. Co., the appellate court applied a two-step test to determine retroactivity: first, whether the legislature intended for the statute to apply retroactively, and second, whether retroactive application would impair vested rights or impose new legal consequences. The court found that even if the legislature had intended for the amendment to be retroactive, doing so would improperly strip Vo of a cause of action that existed before the statute’s enactment. As a result, the court reversed the dismissal and remanded the case for further proceedings.

Ultimately, the ruling reinforced Florida’s general prohibition on retroactive application of statutes that alter substantive rights.