We have seen several recent cases in Florida addressing prompt notice requirements in property policies, many of which are related to Hurricane Wilma claims. This latest decision by the Fourth District Court of Appeal, Leben v. State Farm Florida Ins. Co. 2012 Fla. App. LEXIS 12522 (Aug. 1, 2012) seems to be contrary to the holding of the Fourth District Court of Appeal’s decision in Soronson, which was decided just one week before Leben and discussed in one of our prior blog posts.

As a reminder, typical property policies require the insured to cooperate with the insurer in the investigation of the claim, and specifically require the insured to submit a sworn proof of loss, provide timely responses to an insurer’s request for documentation related to the claim and, if requested, submit to examinations under oath. If the insured fails to abide by such requirements, the issue, in many jurisdictions, then becomes whether the requirement is a condition precedent to coverage (which may result in a presumption of prejudice to the insurer that may be rebutted), or whether the requirement is a condition subsequent (which may place the burden on the insurer to establish a material breach that prejudices the insurer). See, e.g., Bankers Ins. Co. v. Macias, 475 So. 2d 1216 (Fla. 1985).

In Leben, the insureds noticed damage to their home in 2005 when Wilma made landfall, but did not report the damage to State Farm until February 2009. Leben at *2. It is unclear from the opinion whether State Farm denied the claim or whether suit was filed before State Farm had fully investigated the claim. State Farm’s motion for summary judgment was granted by the trial court, but reversed on appeal. The Fourth District Court of Appeal agreed with the court in Soronson that failure to provide timely notice of the loss “is a legal basis for the denial of recovery,” that “prejudice to the insurer will be presumed,” and that the assumption of prejudice may be “rebutted by a showing that the insurer has not been prejudiced by the lack of notice.” Leben at *3-4. State Farm provided an affidavit indicating that State Farm was “unable to independently determine whether roof and interior damage to the home was caused by Hurricane Wilma because the Lebens’ failure to comply with the post-loss conditions precedent to recovery of their policy prejudiced and compromised State Farm.” In opposing State Farm’s motion for summary judgment, the Lebens provided two expert reports indicating that the claimed damages were caused by Hurricane Wilma.

The Fourth District Court of Appeal (Judge Gerber issued the decision with Judges Taylor and Levine concurring) determined, without any analysis, that the affidavit of State Farm and the expert reports of the insured were “sufficient to raise a genuine issue of material fact.” Id. at *4. This seems to directly contradict the holding in Soronson (Judge Stevenson issued the decision with Judges Warner and Conner concurring), where there was no affidavit submitted by the insurer, prejudice was presumed, and the affidavit of the insureds, which had attached engineer reports,

“merely adopt[ed] unsworn statements that Hurricane Wilma damaged their roof and that their roof needs to be replaced as a result. Their affidavit d[id] not present sufficient counterevidence to overcome the insurer’s presumption of prejudice.”

It is unclear whether the fact that the expert reports provided in Soronson were “unsworn” was dispositive to the ruling, nor is it clear from the Leben decision whether the expert reports were unsworn. This distinction, if valid, may be the only basis for reconciling these two decisions. It seems possible that en banc rehearing may be sought to clarify the apparent inconsistency between these two decisions.

The topic of late notice, especially with regard to Hurricane Wilma claims, will likely be the subject of more Florida appellate decisions that may reach the Florida Supreme Court.