Is there a specific period of time in which insurance claims must be made before they are barred as a matter of law? In What Has Happened to the Rebuttable Presumption of Prejudice in a Recent Late Notice Case?, Shaun Marker focused on one sentence fragment from the recent Florida case of Kroener v. Florida Ins. Guar. Ass’n, 63 So. 3d 914 (Fla. 4th DCA 2011), which appears to have turned the issue of notice of Florida insurance claims on its ear. That sentence says:
[A]s a matter of law, notice to the insurer of a claim of loss more than two years and two months after the loss occurred was not prompt notice; the untimely reporting of the loss violated the insurance policy and was sufficient to bar the claim.
It is no surprise that insurance defense attorneys and even some judges have latched on to this sentence fragment. Unfortunately, it means legitimate insurance claims may not get paid. Thankfully, not all courts are finding that Kroener creates a per se cutoff of two years and two months for insurance claims. In Banta Properties, Inc. v. Arch Specialty Ins. Co., 10–61485–CIV, 2011 WL 5928578 (S.D. Fla. Nov. 23, 2011), the insurance company argued that Kroener barred the policyholder’s claim because it was brought too late, but the United States District Court for the Southern District of Florida disagreed.
Arch cites Kroener v. Fla. Ins. Guar. Ass’n, 63 So.3d 914, 916 (Fla. 4th DCA 2011), for the proposition that an insured’s notice to its insurer two years and two months after an event giving rise to a claim makes notice untimely per se. … Most Florida courts, however, consider timeliness an issue to be decided on the circumstances of each case and do not set a per se bar on timeliness. See Renuart–Bailey–Cheely Lumber & Supply Co. v. Phoenix of Hartford Ins. Co., 474 F.2d 555, 558 (5th Cir.1972)5; see also Employers Cas. Co. v. Vargas, 159 So.2d 875, 877 (Fla. 2d DCA 1964); Laster v. U.S. Fid. & Guar. Co., 293 So.2d 83, 86 (Fla. 3d DCA 1974). The former Fifth Circuit, interpreting Florida law, found that a delay of four years was not untimely as a matter of law. See Phoenix of Hartford, 474 F.2d at 558. This Court agrees that there is no per se timeliness bar for filing a notice of a claim and that notice must be considered under the circumstances.
Unfortunately, not all courts have read Kroener the same way as the Southern District. There are currently at least three appeals pending before the Fourth District Court of Appeal in Florida that involve this issue: Kramer v. State Farm Florida Ins. Co., 4D10-3978; Stark v. State Farm Florida Ins. Co., 4D10-4945; and Slominski v. Citizens Prop. Ins. Corp., 4D10-4372. In each of these cases, it appears that the courts held that the policyholders’ insurance claims were barred for being too late under Kroener. The policyholders have appealed those decisions and have advanced several arguments: Kroener does not overrule existing Florida Supreme Court precedent; Kroener only applies to assignments of insurance claims; and that a rebuttable presumption of prejudice is the appropriate standard used to determine “late notice” cases. These appeals mean that Kroener will likely not be the last word on the subject of notice of insurance claims. We will post new decisions about this important issue as they are released.
With respect to the rebuttable presumption of prejudice, the Banta Properties Court went further to explain how this standard is applied. For more on rebutting the presumption of prejudice in late notice cases, check this blog in the upcoming weeks.