Holland & Knight Secures Major Victory for Insurance Industry in Florida Supreme Court

MIAMI – June 1, 2012 - On May 31, The Florida Supreme Court ruled unanimously in favor of Holland & Knight client QBE Insurance Corp. on several key issues of Florida insurance law.

The case stems from a claim filed by the Boca Raton-based Chalfonte Condominium Apartment Association against QBE Insurance Corp. after Hurricane Wilma in 2005. The association won a $7.2 million jury award in federal court. QBE appealed the award to the Eleventh Circuit Court of Appeals, which in turn certified five questions of Florida law to the Florida Supreme Court.

Most importantly, the Court found that Florida law does not recognize claims for a breach of the "implied warranty of good faith" based on an insurer's failure to promptly settle its insured's claim. The Court explained that such first-party claims are actually statutory bad faith claims that must be brought under Section 624.155 of the Florida statutes. In Florida, policyholders must first win a breach of contract claim against their insurer before pursuing a bad faith claim.

The Supreme Court also sided with QBE on the other issues. It found that an insured cannot bring a claim against an insurer for failure to comply with the language and type-size requirements in section 627.701(4)(a), and that such failure does not render a noncompliant hurricane deductible provision in an insurance policy void and unenforceable because the Legislature has not provided for this penalty.

Holland & Knight Appellate partner Rodolfo Sorondo, Jr. and associate Monica Vila, both in the firm's Miami office, represented QBE in the matter in conjunction with Raoul Cantero of White & Case LLP and William Berk of Berk, Merchant & Sims, PLC.