Florida Fourth District Court of Appeal Reverses Summary Judgment in Bad Faith Action

By Zachary D. Sonenblum

In Bailey v. People’s Trust Ins. Co., Florida’s Fourth District Court of Appeal reversed the trial court’s entry of summary judgment in favor of People’s Trust in a bad faith action.

People’s Trust accepted coverage for the underlying claim but valued the damage below the deductible. Disagreeing with this valuation, the insured filed a Civil Remedy Notice (“CRN”). People’s Trust responded to the CRN without specifying any deficiencies. The claim subsequently went to appraisal and the insured was awarded a significantly higher damage amount. The Insured filed a bad faith action against People’s Trust.

People’s Trust moved for summary judgment in the bad faith action, and argued that the CRN was invalid because it contained only “generic and factually unsupported allegations of statutory violations” and therefore, failed to meet Fla. Stat. § 624.155’s specificity requirements. The insured homeowner opposed summary judgment and argued that 1) the CRN was sufficient and 2) that People’s Trust waived any purported deficiencies in the CRN by failing to raise the specific objections in its CRN Response that it now raised in its MSJ. The trial court granted the motion and entered summary judgment in favor of People’s Trust.

On appeal, the insured homeowner argued that “by responding to the CRN on the merits and failing to identify any specific defect with the CRN in its response, People’s Trust waived the right to contest the validity of the CRN in the bad faith action.” Bailey v. People’s Trust Ins. Co., 2024 Fla. App. LEXIS 4845 at *3(Fla. 4th DCA 2024).

The appellate court agreed with the insured and reasoned as follows:

In Bay v. United Services Automobile Ass’n, we explained that an insurer waives its right to contest a defect in the CRN if it fails to identify the specific defect in its response to the CRN. 305 So. 3d 294, 299-300 (Fla. 4th DCA 2020) (also holding that “one can waive any contractual, statutory or constitutional right” (quoting Miami Dolphins, Ltd. v. Genden & Bach, P.A., 545 So. 2d 294, 296 (Fla. 3d DCA 1989))); see also Neal v. GEICO Gen. Ins. Co., 358 So. 3d 749, 752-53 (Fla. 4th DCA 2023) (citing Bay and holding the insurer waived its claim that the CRN did not comply with the statute where insurer failed to allege the deficiencies in its response to the CRN); Evergreen Lakes HOA, Inc. v. Lloyd’s Underwriters at London, 230 So. 3d 1, 3 (Fla. 4th DCA 2017) (holding that by responding to a CRN without challenging its timeliness, the insurer waived compliance with the requirement that it be given a copy of a CRN on or before the date on which the DFS accepted the CRN); Pin-Pon Corp. v. Landmark Am. Ins. Co., 500 F. Supp. 3d 1336, 1348 (S.D. Fla. 2020) (holding that “the technical defects raised by [insurer] in its Motion to Dismiss may not serve as the grounds for dismissing this lawsuit, given that [insurer] waived the majority of them in failing to raise same in its responses to the CRNs”).

Ultimately, the appellate court reversed the trial court’s summary judgment and remanded the case for further proceedings, allowing the insured to pursue her bad faith claim.