Florida Insurance Law Blog

4th DCA Analyzes Late Notice and Failure to File Proof of Loss

Yesterday, in Kramer v. State Farm Florida Insurance Company, ____ So.3d ____ (Fla. 4th DCA July 18, 2012), the 4th DCA reiterated the analysis courts must go through when evaluating late notice and late submission of Proof of Loss cases. 

In Kramer, the insured homeowners claimed that their home was damaged by a hurricane. However, they didn’t submit the claim until four years later when their roof began to leak. Because of the late notice and an untimely submission of a Proof of Loss form, the homeowners insurer refused to pay. The homeowners filed suit.

In a Motion for Summary Judgment, the homeowners’ insurer asked the trial court to dismiss the case because of the late notice and the late submission of a Proof of Loss. The insurance company recognized that the issues were controlled by the Florida Supreme Court decision in Bankers Insurance Co. v. Macias, 475 So.2d 1216 (Fla. 1985). Under Macias, “[i]f the insured breaches the notice provision, prejudice to the insurer will be presumed.” However, the insurer conceded that under Macias, the presumed prejudice “may be rebutted by a showing that the insurer has not been prejudiced by the lack of notice.” The insurer argued, however, that the insureds failed to make any such showing in the record. 

The trial court agreed and granted the insurer’s motion. The insureds appealed.

The first issue addressed by the 4th DCA was whether notice and Proof of Loss provisions were “conditions precedent” to filing suit, or “conditions subsequent.” Under the conditions precedent analysis, the insured has the burden of proving no prejudice to the insurer; and under the conditions precedent subsequent analysis the insurer has the burden of proving that it was not prejudiced. So, whether these provisions are conditions precedent, or conditions subsequent matter – a lot. (Isn’t this the most interesting stuff you’ve ever read?)

Following a long line of cases, the Court quickly concluded that the notice and Proof of Loss provisions in the policy were “conditions precedent” to filing suit. Having concluded that these were “conditions precedent” to filing suit, the 4th held that Macias controlled its analysis. In ruling, the Court stated:

Despite the fact that a notice of loss and a sworn proof of loss are conditions precedent to suit, however, our supreme court long has held that “[s]uch a condition can be avoided by a party alleging and showing that the insurance carrier was not prejudiced by noncompliance with the condition.” Bankers, 475 So. 2d at 1218. In other words, “[i]f the insured breaches the notice provision, prejudice to the insurer will be presumed, but may be rebutted by a showing that the insurer has not been prejudiced by the lack of notice.” Id. (citations omitted). 

 

Applying that principle to this case, the insureds’ untimely pre-suit notice of the alleged loss and untimely pre-suit submission of the sworn proof of loss is presumed to have prejudiced the insurer. Thus, the burden shifted to the insureds to show that the insurer was not prejudiced by their untimely pre-suit notice of the alleged loss and the untimely pre-suit submission of the sworn proof of loss. This burden shifting is consistent with the burden shifting which occurs on a motion for summary judgment when the movant has met the initial burden of demonstrating the nonexistence of any genuine issue of material fact.

This case is really nothing new. However, it is an important decision to me personally. Recently I tried a case very similar to this one in front of a jury. The trial judge performed a Macias analysis, and allowed me to argue to the jury that the insurance company was not prejudiced by my clients’ failure to submit a Proof of Loss form. The jury specifically found on the verdict that the insurance company had not been prejudiced. In spite of this, the insurance company has appealed arguing that Macias should not apply. This new case out of the 4th will further support our position in my case. 

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