Florida’s Second District Court of Appeal Reverses Insurer Summary Judgment in Late Notice Case

By Kelly M. Vogt

Florida’s Second District Court of Appeal reversed a trial court’s summary judgment in a hurricane damage claim dispute involving late notice and alleged prejudice. While the appellate court agreed with the original decision to strike a settlement that was accepted after the court granted summary judgment, the original summary judgment was reversed and remanded for further proceedings.

The Original Judgment

The case arose from Wild Oak Bay Owners Association’s (Wild Oak Bay) claim of damage caused by Hurricane Irma. Wild Oak Bay filed its claim with American Coastal Insurance Company (American Coastal) on July 29, 2020, nearly three years after Hurricane Irma’s landfall.

In August 2020, Wild Oak Bay assigned its benefits under its insurance policy to SFR Services (SFR), which subsequently submitted an estimate of repairs for forty-eight buildings. In March 2021, SFR filed suit against American Coastal for breach of contract, alleging that American Coastal had refused to pay for all covered damages.

American Coastal later filed a motion for summary judgment, arguing that Wild Oak Bay had failed to provide prompt notice of its claim, and that the delay in notice prejudiced American Coastal’s investigation. The trial court agreed and granted summary judgment.

Following summary judgment, SFR filed a notice accepting a previous settlement offer. The trial court struck the acceptance, as it was filed after summary judgment was already entered.

Appellate Court’s Opinion

The Second District Court of Appeal relied on a two-step analysis in deciding the appeal: whether the notice was prompt, and if not, whether the late notice prejudiced American Coastal. On the first issue, the court agreed with the trial court that Wild Oak Bay did not provide prompt notice of its claim as was required by the insurance policy.

On the second issue, the court found that the subject insurance policy language placed the burden on the insurer to prove prejudice. While common law allows a presumption of prejudice in late notice cases, the court ruled that the following policy language governing the prompt notice provision removed that presumption:

In the case of a loss to covered property, [American Coastal] ha[s] no duty to provide coverage under this Policy if the failure to comply with the following [listed] duties is prejudicial to [American Coastal].

This is almost identical to the language in Perez v. Citizens Prop. Ins. Co. (Fla. 4th DCA 2022) and Arce v. Citizens Prop. Ins. Co. (Fla. 3d DCA 2024), but the courts reached different conclusions in each. While the Perez ruling shifted the burden to the insurer, the Arce ruling said there are no policy language exceptions to the common law presumption of prejudice.

The Second District agreed with the Fourth District, stating that the “if” in the policy language shifted the burden of proof to the insurer to demonstrate prejudice.

The appellate court opinion also stated the trial court had improperly weighed the expert engineer’s evidence, which, in the appellate court’s view, overcame any presumption of prejudice. Based on this analysis, the Second District reversed and remanded the summary judgment.

The appellate court upheld the trial court’s decision to strike the post-judgment acceptance of the settlement offer, stating that an entry of judgment or a jury verdict supersedes any previous settlement offers.