In 1500 Coral Towers Condominium Association, Inc. v. Citizens Property Ins.Co., No. 3D12-132 (3rd DCA April 3, 2013), upon rehearing and de novo review, Florida’s Third District Court of Appeal withdrew its February 6, 2013 late notice ruling (see our analysis of that decision in the February 11 posting), and affirmed the lower court’s grant of summary judgment to the insurer. In its prior ruling, the 3rd DCA reversed the trial court’s grant of summary judgment to Citizens as to whether the insured’s late notification to the insurer was prejudicial and determined that it was an issue of fact for the jury. Based upon a second review of the entire record and the controlling case law, the court withdrew its February 6, 2013 opinion, and ruled that: (1) the trial court was correct in finding Citizens was presumed prejudiced by Coral Towers’ late notice; and (2) Coral Towers failed to overcome the presumption of prejudice.

In Coral Towers, there was a five-year delay in giving notice. Hurricane Wilma took place in October 2005 and Coral Towers first notified Citizens that the property had sustained damages on June 29, 2010. During the litigation, Coral Towers admitted knowledge of the loss in 2005 and that it made repairs in response to the hurricane damage. Coral Towers did not notify Citizens immediately after the hurricane because there was a question as to whether the damages would exceed the policy deductible. Citizens moved for summary judgment on late notice and other grounds, asserting that it was prejudiced by the inability to investigate and evaluate the claim under the policy. Coral Towers responded that the type of damages it had sustained appeared over time and would not have necessarily evidenced themselves within the first two years after the hurricane.

In affirming the trial court’s summary judgment ruling, the 3rd DCA addressed the two critical components of late notice in Florida: timely notice, and prejudice (i.e., failure to give timely notice creates a presumption that the insurer was prejudiced). First, with respect to timeliness, the court agreed with the trial court that there was no factual dispute that Coral Towers failed to give timely notice of the loss. An insured must give notice without waiting for the full extent of the damages to become apparent, and the reasons given by Coral Towers did not excuse its failure to comply with prompt notice policy requirements. Second, with respect to prejudice, the court ruled that Coral Towers failed to overcome the prejudice presumption. As an insured, Coral Towers may rebut the presumption of prejudice by alleging and showing that the late notice did not prejudice the insurer. The primary evidence submitted by Coral Towers was a conclusory statement by one of its engineers that, in his opinion, the late notice did not prejudice Citizens. The court concluded that this was not legally sufficient evidence to overcome the presumption.

With many of these Hurricane Wilma late notice cases, where first notice is given years after the storm struck, the key issue is prejudice.  The 3rd DCA’s previous ruling cast considerable doubt upon the viability of the rebuttable presumption of prejudice defense in a summary judgment context. In its April 3, 2013 ruling, the court has restored the viability of this defense.