Citizens Property Insurance Corporation Sued For Bad Faith, by: The Liberis Law Firm

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On Thursday, November 15, 2012, the Florida Supreme Court released its opinion in Citizens Property Insurance Corp. v. San Perdido Association, Inc., 2012 Fla. LEXIS 2354. The central issue in the case is whether Florida’s quasi-governmental insurance company, Citizens Property Insurance Corporation, can be held liable for bad faith. However, the Florida Supreme Court denied the appeal on procedural grounds and sent the case back to the Escambia County Circuit Court.

"Without the threat of bad faith liability, Citizens has no incentive whatsoever to settle claims in a fair and timely manner and will not do so."

On Thursday, November 15, 2012, the Florida Supreme Court released its opinion in Citizens Property Insurance Corp. v. San Perdido Association, Inc., 2012 Fla. LEXIS 2354. According to the complaint, the central issue in the case is whether Florida’s quasi-governmental insurance company, Citizens Property Insurance Corporation, can be held liable for bad faith associated with failure to promptly pay damage claims from Hurricane Ivan; however, the Florida Supreme Court denied the appeal on procedural grounds and sent the case back to the Escambia County Circuit Court.

Richard Beckish, of Liberis Law Firm, attorneys for San Perdido said, “This case has the potential for widespread impact on Florida property owners. San Perdido’s case is a Hurricane Ivan claim. We recovered a judgment against Citizens for breach of their contract with our client, but it took us nearly five years just to get them to pay what they should have paid in the first place. San Perdido, and its sister case, Perdido Sun v. Citizens, are perfect examples of why, without the threat of bad faith liability, Citizens has no incentive whatsoever to settle claims in a fair and timely manner and will not do so.”

Beckish further noted that, “It’s being reported in the press that the Supreme Court has simply “kicked the can down the road” here, but that’s not entirely the case. In fact, the Supreme Court really didn’t do Citizens any favors. In the first place, there were two cases out of the Fifth District Court of Appeals, Garfinkle and LeMer that the Supreme Court expressly disapproved. Both of those cases, which held that Citizens is immune to liability for bad faith, are gone. Citizens now faces the prospect of having to try the Garfinkle and LeMer cases, and the San Perdido and Perdido Sun cases. Further, the immunity issue itself really turns on interpretation of Citizens’ enabling statute, which grants it immunity to being sued, but carves out some very specific exceptions to that immunity. In its opinion, the Supreme Court signaled in a footnote, that, under egregious circumstances, bad faith could fall under one of the exceptions to Citizens immunity. Whether the circumstances are egregious in one, or all, of these cases will now be decided by juries. This could be a boon to the property owners of the State of Florida who have had to fight in the past to get their claims paid.”

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Richard Beckish
rbeckish@liberislaw.com
850-438-9647
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