Many, if not all, policyholders’ advocates are aware of the recent legislative changes to Florida’s sinkhole statutes. One of our greatest concerns is the definitional change of the term “structural damage” and whether this change can be applied retroactively. Chip Merlin’s July 7, 2011, post highlighted a recent circuit court’s decision finding the new law’s definition of “structural damage” inapplicable to previous policies of insurance. On the very next day, July 8, 2011, the Florida Supreme Court addressed a similar retroactivity issue in Optical Corporation v. Spiewak.

In Spiewak, the plaintiffs (“appellees”) sued the defendant (“appellant”) for injuries resulting from exposure to asbestos. After the exposure, but prior to litigation, the Florida Legislature passed the Florida Asbestos and Silica Compensation Fairness Act (“the Act”). Prior to the Act, an injured person had the burden to prove they suffered an injury from an asbestos released disease. After the Act was passed, an injured person’s burden was heightened to proving malignancy or actual physical impairment for which asbestos exposure was a substantial contributing factor. The appellant argued the Act’s changes, including the burden of proof, applied retroactively, barring the appellees’ claims. The Fourth District Court found in favor of the appellees, finding the Act could not be applied retroactively. The issue was then brought before the Florida Supreme Court.

Fortunately, the Florida Supreme Court has been consistent in finding substantive changes to laws cannot be applied retroactively, and Spiewak continued this precedent.

The Supreme Court held:

Retroactive application of the Act here would operate to completely abolish the Appellees’ vested rights in accrued causes of action for asbestos-related injury. For this reason, we conclude that the Act cannot be constitutionally applied to them.

Many policyholders are currently involved in litigation over their sinkhole claims and we can anticipate insurers arguing the new definition of “structural damage” applies retroactively. The Property Insurance Coverage Law Blog will post updates on related legislation and litigation.