Northern District of Florida Rules That the December 2022 Amendment to Florida Statute Section 627.428, Eliminating an Insured’s Right to Recover Attorney’s Fees, Does Not Apply Retroactively

In Baptist Coll. of Fla. Inc. v. Church Mut. Ins. Co. Si, No. 5:22cv158-MW/MJF, 2023 U.S. Dist. LEXIS 117527 (N.D. Fla. June 23, 2023), the parties entered into an insurance agreement, executed on October 15, 2017 (the “Policy”). After filing a claim, a dispute arose over the amount of the loss leading the Plaintiff to file a lawsuit. The Court eventually granted Plaintiff’s motion for summary judgment with respect to Defendant’s liability under the Policy.

The Court then examined whether the Plaintiff was entitled to attorney’s fees given the amendment to section 627.428, which at the time the Policy was entered, entitled Plaintiff to recover attorney’s fees after obtaining a judgment against the insurer pursuant to their insurance agreement.

A December 2022 amendment to section 627.428 eliminated an insured’s right to recover attorney’s fees in lawsuits arising under residential or commercial property agreements (the “December 2022 Amendment”). The Court noted that Florida courts apply a two-prong test to determine if a change to a Florida statute should apply retroactively, citing Menendez v. Progressive Exp. Ins. Co., Inc., 35 So. 3d 873, 877 (Fla. 2010). First, the Court must ascertain whether the [Florida] Legislature intended the statute to apply retroactively. Second, if such an intent is clearly expressed, the Court must determine whether retroactive application would violate constitutional principles, noting that a violation of constitutional principles occurs when the statute “attaches new legal consequences” to a pre-existing contractual agreement between the parties.

The Court found that because the Florida Legislature did not express intent for the December 2022 Amendment to apply retroactively, it did not, and the December 2022 Amendment was inapplicable to this Policy. Although the Court could have ended its analysis there, the Court further held that the December 2022 Amendment did not apply retroactively because it attaches new legal consequence to the Policy, a complete prohibition on an insured’s right to recover attorney’s fees.