In Florida, a negligence action must be commenced within four years from when the cause of action accrued.1 The question is: When does a cause of action accrue? The statute in Florida says "a cause of action accrues when the last element of the cause of action occurs." The last element of a cause of action based on negligence is actual loss or damage.

In a recent case, Florida’s Fourth District Court of Appeals reviewed a trial court’s determination that the statute of limitations had run in an agent negligence case.2 Medical Data Systems ("MDS") is a medical debt collector that relied on its agent to procure liability coverage appropriate for its needs. The policy obtained through the agent excluded liability coverage for debt collection activities.

Lawsuits were filed against MDS out of alleged violations of the Fair Debt Collection Practices Act. MDS retained counsel and paid the first bill for legal services on June 1, 2006. MDS’s insurance carrier denied coverage under the policy in September 2006. The claims related to the Fair Debt Collection Practices Act were settled in June 2008.

In November 2009, MDS filed suit against Coastal and it’s agent for negligence in failing to obtain appropriate coverage. In August 2010, MDS filed an amended complaint adding American Professional Liability Underwriters as a Defendant, a broker that Coastal allegedly retained to procure the policy.

APLU moved for summary judgment arguing that the cause of action against it was barred by the four year statute of limitations. APLU argued MDS’s cause of action accrued when it retained counsel and first started paying legal fees in June 2006. MDS argued that the statute of limitations against APLU did not begin to run until June 2008 when the underlying claims against it were settled.

Florida’s Fourth DCA held that the negligence cause of action against APLU did not accrue until June 2008, when the underlying claims were settled. In support of it’s holding, the Court held that a negligence cause of action accrues when the client incurs damages at the conclusion of the underlying judicial proceedings, or if there are no underlying judicial proceedings, when the client’s right to sue in the underlying proceeding expires.

The appellate court reversed the trial court ruling and remanded the case and allowed the cause of action against APLU to proceed. Always consult with experienced legal counsel and do not wait if you have a question whether a cause of action has accrued and whether the statute of limitations has run.

1 Florida Statutes § 95.11(3)(a).
2 Medical Data Systems, Inc. v. Coastal Ins. Group, Inc., 2014 WL 2101238 (Fla. 4th DCA May 21, 2014).