The statute of limitations for bringing suit against a property insurer may be far shorter for policies issued after May 17, 2011, under Florida law. As a Florida federal court recently explained in West Palm Gardens Villas Condo Assn v. Aspen Specialty Ins Co., 2012 U.S. Dist. LEXIS 104861 (S.D. Fla. June 25, 2012), under a new Florida statute claims for breach of contract against property insurers will start accruing on the date of loss rather than the date on which the contract was allegedly breached. West Palm Gardens Villas Condominium Association (“West Palm”) was insured under a homeowners insurance policy issued by Aspen Specialty Insurance Company (“Aspen”), and sustained property damage from Hurricane Wilma on October 24, 2005. Aspen initially acknowledged coverage, but upon investigation, concluded that the loss did not exceed the policy’s deductible, and made no payment. West Palm disagreed, and demanded appraisal to determine the amount of its claimed loss. After Aspen allegedly failed to proceed with the appraisal, West Palm brought suit on October 31, 2011, alleging breach of contract. Aspen moved to dismiss the lawsuit, arguing that it was time-barred under Florida’s five-year statute of limitations for contract claims. Aspen argued that the statute of limitations period began to run as of the October 24, 2005 date of loss, and that more than five years had therefore passed before the filing of the lawsuit on October 31, 2011. The court disagreed. The court explained that prior to May 17, 2011, Fla. Stat. 95.11(2) did not specify the date from which the five-year limitations period ran. Because the Aspen policy was issued to West Palm before 2011, the court relied on a statute providing that “[a] cause of action accrues when the last element constituting the cause of action occurs.” Fla. Stat. § 95.031 (2006). West Palm argued that the last element of its cause of action occurred when Aspen failed to comply with the appraisal process and allegedly denied coverage on October 13, 2011, well within the limitations period. The court agreed, and denied Aspen’s motion to dismiss. It stated as follows:
“Thus, for the purposes of the present matter, West Palm’s claim is governed by the version of § 95.11(2) that was in effect at the time that the Policy was executed, prior to the May 17, 2011 amendment. Under Florida law, the five-year limitations period began to run not upon the date of loss of October 24, 2005, but upon the accrual of West Palm’s cause of action, which occurred when the last element constituting the cause of action occurred—that is, when Aspen denied coverage for West Palm’s claim by refusing to proceed with the appraisal process under the Policy.” Id. at *14-15 (citations omitted.)
In reaching its holding, the court explained, however, that insurance policies issued after May 17, 2011, are likely subject to a much shorter statute of limitations period based upon the adoption of Section 95.11(2)(e) as of that date. Section 95.11(2)(e) provides a five-year limitations period “for an action for breach of a property insurance contract, with the period running from the date of loss.” (Emphasis added.) Because the court determined that the statute does not apply retroactively, it held that the statute of limitations period only runs from the date of loss for claims brought under policies executed on or after May 17, 2011, the effective date of the amendment. As the court explained,
“Section 95.11(2)(e) changed th[e] prior understanding with respect to actions founded upon insurance contracts, designating the date of loss as the new date from which the limitations period would run. The date of loss often precedes the date of alleged breach, meaning that this clarification effectively caused the limitations period for insurance contract actions to run earlier than it would have under previous versions of the statute.”
Id. at *10. The new language of Fla. Stat. 95.11 will likely be the subject of many litigated cases where suit is filed long after the loss occurs, and therefore the topic of further reports on decisions interpreting this new language.