Florida’s Fourth District Court of Appeal holds that a response to a Civil Remedy Notice must raise specific deficiencies or those arguments are waived.

The Fourth District Court of Appeal agreed with Bailey, the homeowner, that People’s Trust Insurance Company waived the right to contest the validity of the Civil Remedy Notice of Insurer Violations (CRN) in the pending bad faith action because it responded to the CRN on the merits and failed to identify any specific defect with the CRN in its response. 

Bailey filed a CRN in which she alleged People’s Trust undervalued the loss. People’s Trust responded to the CRN, asserting it did not agree with the scope of repairs alleged necessary by Bailey. The response also cited the general requirements of a valid CRN and generally concluded it “violates all those principles.” However, the CRN response did not raise any specific deficiencies with the CRN. The matter proceeded to appraisal, where Bailey was awarded well over the amount initially determined by People’s Trust. Thereafter, Bailey filed a first-party bad faith action against People’s Trust. 

During the underlying litigation, People’s Trust moved for summary judgment, arguing the CRN was invalid because it contained generic and factually unsupported allegations of statutory violation and, therefore, failed to meet the specificity requirements under Florida Statute § 624.155. Bailey opposed summary judgment by arguing the CRN was sufficient. In addition, Bailey argued People’s Trust waived any objections to the alleged deficiencies since it did not raise the specific objections in its response to the CRN. Ultimately, the trial court granted summary judgment in favor of People’s Trust.

The Fourth District Court of Appeal has consistently held that an insurer waives its right to contest a defect in a CRN if it fails to identify the specific defect in the CRN response. Bay v. United Services Automobile Ass’n, 305 So. 3d 294, 299-300 (Fla. 4th DCA 2020); see also Neal v. GEICO Gen. Ins. Co., 358 So. 3d 749, 752-53 (Fla. 4th DCA 2023); Evergreen Lakes HOA, Inc. v. Lloyd’s Underwriters at London, 230 So. 3d 1, 3 (Fla. 4th DCA 2017). 

Here, the CRN response included a reiteration of the requirements of a valid CRN and a general conclusion that the CRN “violates all those principles.” The District Court concluded the response to the CRN failed to raise any specific deficiencies with the CRN; thus, People’s Trust waived any claim of noncompliance with the requirements of Fla. Stat. § 624.155. 

Based on its conclusions, the District Court reversed the order granting summary judgment and the final judgment in favor of People’s Trust and remanded for further proceedings. 

_{Legal Update for Florida Coverage & Property Litigation – August 2024 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2024 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.}