PERSONAL INJURY CORNER
An Insurers Liability for Breach of Contract and Extra Contractual Damages
TED BABBITT
Citizens Property Insurance Corporation vs . Manor House , LLC , SC 19-1394 , 46 FL Law Weekley S21 ( January 21 , 2021 ) was a suit brought by an insured apartment house seeking to recover lost rents when it ’ s insurer allegedly failed to adjust and pay claims under its property insurance policy . The Plaintiff alleged that because the Defendant insurer delayed in paying what was due under the policy , that delay resulted in loss of rental income and the Plaintiff sought extra contractual damages related to that income . The Trial Court granted partial summary judgment dismissing the claim . The 5th District in Manor House LLC vs . Citizens Property Insurance Corporation 277 So . 3d 658 ( Fla 5th DCA 2019 ), reversed the Trial Court holding “ When an insurer breaches an insurance contract , the insured is entitled to recover more than the pecuniary loss involved in the balance of the payments due under the policy in consequential damages , provided the damages were in contemplation of the parties at the inception of the contract ”
The case came to The Supreme Court of Florida because the 5th District certified the following question to be of great public importance .
“ IN A FIRST-PARTY BREACH OF INSURANCE CONTRACT ACTION BROUGHT BY AN INSURED AGAINST HIS INSURER , NOT INVOLVED IN A SUIT UNDER SECTION 624.155 , FL STATUTES , DOES FLORIDA LAW ALLOW THE INSURED TO RECOVER EXTRA-CONTRACTUAL , CONSEQUENTIAL DAMAGES ?"
The Supreme Court answered the question in the negative , holding that the insurance contract in question did not provide for lost rental income and that in a first-party insurance claim extra contractual damages are not available and the only claim available is monetary damages contemplated by the insurance contract . when the insured has been damaged extra contractually by the bad faith of a carrier . This includes an insurer failing to attempt in good faith to settle claims when all the circumstances require that the insurer should have done so had it fairly and honestly acted towards its insured with due regard to the insured ’ s interests .
In this case , however , the Court finds , “ Citizens is a government entity that is an integral part of the state , and that is not a private insurance company , and this court has concluded that Citizens is statutorily immune from first-party bad faith claims .”
The court concludes “ For the above reasons , we answer the certified question in the negative , quash the 5th District decision , and remand for proceedings consistent with this opinion . In doing so , we conclude that the extra-contractual , consequential damages are not available in a first-party breach of insurance contract action because the contractual amount due to the insured is the amount owed pursuant to the express terms and conditions of the insurance policy . Extra-contractual damages are available in a separate bad faith action pursuant to Section 624.155 but are not recoverable in this action against Citizens because Citizens is statutorily immune from first-party bad faith claims .
The Supreme Court pointed out that under FS 624.155 an insured could bring an action against an insurer
PBCBA BAR BULLETIN 12