By: Jeremy W. Rogers
For those insurance defense attorneys and insurance carriers handling liability cases or claims in Florida, unless you have not been paying attention for the past 35 years, you are aware of Fla. Stat. § 627.4137 and its requirements. This statute gives claimants access to information about a defendant’s liability insurance. This usually occurs at or near the outset of plaintiff’s engagement of his or her attorney because, as is always the case, insurance coverage is a major factor (or, in reality, THE factor) in how a plaintiff pursues the case and negotiations toward settlement. The statute requires a liability insurer to produce a copy of the policy and to disclose the following information, under oath, within 30 days of a claimant’s request: a) the name of the insurer; b) the name of each insured; c) the limits of liability coverage; d) a statement of any policy or coverage defense which such insurer reasonably believes is available to such insurer at the time of filing such statement; and (e) a copy of the policy.
While we know the requirements, a question often arises about what are the consequences of failing to comply. The statute has no provision for a private right of action. See Lucente v. State Farm Mut. Auto. Ins. Co., 591 So.2d 1126, 1127-28 (4th DCA 1992)(stating there is no implicit third party right of action against an insurer for failure to comply); Brannan v. Geico Indemnity Co., 569 Fed.Appx. 724, 728 (11th Cir. 2014)(indicating there is no first-party private cause of action). Without a private right of action, where are the “teeth” in the statute? Most or all of the decisions on the issue appear to fall within two categories:
- Invalidating settlements
- Invalidating or striking of defenses or pleadings
In the first category, the courts reason that the purpose of disclosure is to guide the parties in their handling of the case and negotiations. The failure to disclose, or to supplement as new information is obtained, means that the plaintiff is proceeding with false or incomplete information. Thus, the statutory disclosure requirement is an essential term of the settlement. The end result is that motions to enforce settlement are denied or defenses based on a pre-suit settlement are not tenable. There was no settlement because there was not meeting of the minds. See, e.g., Cheveire v. Geisser, 783 So. 2d 1115 (Fla. 4th DCA 2001); Schlosser v. Perez, 832 So. 2d 179 (Fla. 2d DCA 2002).
The second category of cases are usually those where the carrier is sued and assert various policy defenses. The court will invalidate or strike a policy defense as a sanction for failure to comply with § 627.4137. In United Auto. Ins. Co. v. Rousseau, 682 So. 2d 1229 (Fla. 4th DCA 1996), because the carrier failed to comply with § 627.4137, the court affirmed a denial of the carrier’s motion for directed verdict that was based upon the failure of plaintiff to comply with certain policy conditions. In Figueroa v. U.S. Security Ins. Co., 664 So. 2d 1130 (Fla. 3d DCA 1995), the court reversed summary judgment in favor of the carrier for the same reason.
The most disturbing decision is a case where a defendant’s pleadings were stricken entirely and the case went forward on damages only. In Oceanside 932 Condominium Assoc., Inc. v. Landsouth Construction, LLC, Case No. 16-2009-CA-007958, plaintiff made a pre-suit insurance disclosure request under the statute. The defendant responded, but not completely. Shortly before trial, Plaintiff’s counsel discovered additional policies which provided coverage. As a result, upon plaintiff’s motion, the Court struck the defendant’s pleadings, entered a default judgment as to liability, and allowed a trial on damages which resulted in an excess verdict. While this is a trial court decision and not binding, it illustrates that there is real jeopardy in the most egregious failures to comply.
So, to answer the question of whether there are “teeth” in § 627.4137, the answer is certainly a yes. It is important, therefore, that when faced with a disclosure request, one complies with the requirements set forth in the statute.
For any questions, please contact Jeremy Rogers at [email protected].