Property Insurance Coverage Law Blog : Florida Insurance Lawyer & Attorney : Merlin Law Group Law Firm : Tampa, Houston, Coral Gables, Gulfport

In Vision I, a homeowner’s association in Palm Beach County sustained damage to its property from hurricane Wilma on October 24, 2005. The association’s insurance policy required that it provide “prompt notice” of damage to the insurer. The association gave verbal notice of a lesser loss to the insurer about eight months after the hurricane, but did not give written notice of property-wide damage until August 2007, some 22 months after the loss. The association filed suit after the insurer did not pay, and the insurer filed a motion for summary judgment, arguing a defense of late notice.

The insurer argued that prejudice should be presumed, given the nearly two year delay between the hurricane and the notice given by the insured. The association argued that the calculation for any delay should be between discovery of the damage and notice given to the insurer. The Southern District Court sided with the association on the calculation for delay in a late notice claim.

“Under Florida law, a failure to provide timely notice of loss in contravention of a policy provision is a legal basis for the denial of recovery under the policy. See Waldrep, 400 So.2d at 785 (‘Notice is necessary when there has been an occurrence that should lead a reasonably prudent man to believe that a claim for damages would arise.’). Indeed, Florida law provides that the failure to give timely notice creates a rebuttable presumption of prejudice to the insurer. ‘If the insured breaches the notice provision, prejudice to the insurer will be presumed, but may be rebutted by a showing that the insurer has not been prejudiced.’ Macias, 475 So.2d at 1216. The ‘determinations of (I) whether the notice provision was complied with and (ii) what is a reasonable time under the surrounding circumstances are questions of fact.’ Bray & Gillespie IX, LLC v. Hartford Fire Ins. Co., 2009 WL 1513400, at *6 (M.D.Fla.2009) (citing Waldrep, 400 So.2d at 785). In order to prevail on a late notice defense, ‘a party must therefore show that there are no genuine issues of material fact regarding 1) what the Policy required with respect to notice, 2) when notice was provided, within the meaning of the Policy and Florida law, 3) whether notice was timely, and 4) whether prejudice exists, either by operation of the unrebutted presumption or otherwise.’ Id. The Court concludes that [the insurer] cannot carry that burden on this record.

The Bray court faced a similar scenario to the present facts-that is, the insurer argued that the insured provided late notice in violation of the policy provision requiring notice ‘as soon as practicable.’ Id. The court held that under Florida law, application of this specific policy language is for the jury, as such language means that ‘notice is to be given within a reasonable time in view of all the facts and circumstances of each particular case.’ Id. at *7 (citing Morton v. Indemnity Ins. Co. of North America, 137 So.2d 618 (Fla. 2d DCA 1962), State Farm Mut. Auto. Ins. Co. v. Ranson, 121 So.2d 175 (Fla. 2d DCA 1960)). The Bray court concluded that the ‘surrounding circumstances’ of that case were ‘replete with factual disputes’ regarding when notice was required to be given and the manner in which notice was provided. Id. For example, the court noted that the plaintiff ‘presented evidence which, if credited, shows that [the plaintiff] did not know the extent of the claimed damage would implicate the [insurer's] policy until 2005, after certain reports were concluded.’ Id. at *7, fn. 9. The court emphasized that since ‘the duty to provide notice arises when a reasonable person, viewing all available facts and information, would conclude that an award implicating the policy is likely,’ the insurer could not establish for purposes of summary judgment, when the duty to notify the insurer first arose. Id. (citing See Harbor Ins. Co. v. Trammell Crow Co., Inc. 854 F.2d 94, 99 (5th Cir.1988)). Therefore, the court concluded that ‘[a]bsent a finding as to exactly when the duty to notify arose, the [c]ourt cannot determine that notice was untimely as a matter of law,’ precluding the granting of summary judgment on the issue of late notice. Id.”

While this case is not binding on all Florida courts, it does cite Florida state case law in its analysis and offers some excellent reasoning as to why late notice claims should be evaluated based on the date the damage was discovered rather than the date of the event that initiated the loss.