In May 2012, in Surplus Lines Insurance; Bridging The Gap In Coverage, we wrote about surplus lines insurance and how it is regulated by the Surplus Lines Law.1 Free from the rate and form regulations which govern authorized insurers, the surplus lines industry can fill the gaps in available insurance for Florida residents. In a recent order, the U.S. District Court for the Southern District of Florida ruled that the provisions within Florida Statute 627.409 are inapplicable to surplus lines insurers.2 Florida Statute 627.409 deals with misrepresentations of material facts in policy applications, and has some insurance friendly language regarding the insurer’s burden of proof.


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The Florida Fourth District Court of Appeals has been busy with late notice Hurricane Wilma cases on appeal. Trial courts within the Fourth District have disposed of these cases, finding as a matter of law that late notice prejudiced insurers. Judges generally decide questions of law, while questions of fact are left for the trier of fact, typically a jury. It is often a reversible error for a judge to take a factual determination away from the jury.


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Those familiar with Hurricane Wilma litigation in South Florida may be fully aware of a recent trend of trial court rulings which take cases away from juries, seemingly depriving policyholders of their days in court. Summary judgment rulings on “late notice” defenses basically ended the cases and took the factual determinations away from the jury. Terms such as “late notice as a matter of law” and “the insurer was prejudiced in its investigation of the damage” suddenly appeared at summary judgment phase rulings. Many members of the plaintiffs’ bar contend that the nature of such disputes contain factual issues that should not be decided by courts at the summary judgment phase, but should be left for determination by a jury.


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Expert witnesses are crucial to support disputed insurance claims, especially when the claims involve extensive damage, as is often the case in hurricane claims. While the standards for expert witness testimony may differ between state and federal courts, all federal courts are bound by Federal Rule of Evidence 702 and the United States Supreme Court’s decisions in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137 (1999). Recently, in Palm Bay Yacht Club Condo. Ass’n, Inc. v. QBE Ins. Corp., 10-23685-CIV, 2012 WL 1345317 (S.D. Fla. Apr. 18, 2012), an insurance company challenged a condominium association’s expert witness and sought to have him excluded from testifying at trial about Hurricane Wilma damage.


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Hurricane Wilma litigation carries on in Florida courts, now almost 6 and a half years after the storm. One issue often raised in the litigation is timely notice of the claim. While policies differ, most require that the insured provide notice of a loss to the insurer with some degree of expediency. Late notice of a claim is generally ground for an insurer’s defense in not paying the claim. Whether notice was timely is generally a question of fact for the jury that precludes summary judgment. However, a South Florida federal court reminded us a few weeks ago that this is not always the case.


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The Florida Insurance Guaranty Association (FIGA) is Florida’s public entity for resolving claims for certain insolvent insurers. FIGA is controlled mostly by statute, and attorney’s fees are no exception. Generally, under Florida Statute § 627.428, attorney’s fees are available for an insured who succeeds on legal action against his or her insurance company. However, Florida Statute § 631.70 exempts FIGA from § 627.428 unless FIGA, “denies by affirmative action, other than delay, a covered claim or a portion thereof.”


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After two recent trials in federal court in South Florida, two different juries found different results in allegedly late filed hurricane insurance claims. Most property insurance policies require that the policyholder notify the insurance company of loss or damage with some degree of expediency, however most policies do not specify when notice will be late enough to deny the claim. Under current Florida law, late notice will only bar an insurance claim if it prejudices the insurance company. If the notice is determined to be late, the insurance company is entitled to a presumption of prejudice that may be rebutted by the policyholder. See Bankers Ins. Co. v. Macias, 475 So. 2d 1216 (Fla. 1985).


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In a recent case before the U.S. District Court in Ft. Lauderdale, the Court had to decide whether a policyholder’s expert should be allowed to testify on certain issues in the trial of the case involving Hurricane Wilma damages. Clena Investments, Inc. v. XL Specialty Ins. Co., 2012 WL 266422 (S.D. Fla. January 30, 2012). Often in litigation, parties challenge the validity of the opposing side’s expert testimony, and the courts must resolve these disputes. In essence, courts acts as a gatekeepers in deciding whether to admit expert testimony.


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