In Linares v. Universal Property and Cas. Ins. Co., 2014 Fla. App. LEXIS 10168, (Fla. 3rd DCA, July 2, 2014), the Court reversed the trial court’s summary judgment ruling in favor of the insurer (“Universal”), which determined that the homeowners’ breach of contract action was barred by the five-year statute of limitations period. The 3rd DCA determined that the limitations period did not begin to run until Universal’s August 24, 2010 denial letter was issued, and therefore the homeowners’ 2012 lawsuit was not barred.

This case involved a residential Hurricane Wilma claim.  Shortly after the homeowners filed their insurance claim, Universal issued a letter on February 21, 2006 advising that the hurricane damage fell below the insurance policy’s deductible. There was no express denial of the claim at that time and Universal encouraged the homeowners to submit any newly discovered damages or information to Universal for its consideration. In December 2009, the homeowners submitted a damages estimate which substantially exceeded the policy deductible and demanded appraisal.  After conducting an examination under oath and considering the homeowners’ sworn proof of loss, Universal issued an August 24, 2010 letter denying the claim and reaffirming that the damages were below the deductible.

The homeowners filed suit on July 9, 2012, and the trial court granted Universal’s summary judgment motion based upon the statute of limitations. The trial court accepted Universal’s argument that the statute of limitations began to run when Universal sent the February 21, 2006 letter (i.e., the time when the insurance policy was allegedly breached). The 3rd DCA rejected this analysis, relying heavily on Oriole Gardens Condominiums, III v. Independence Cas. & Sur. Co., No. 11-60294-CIV, 2012 WL 718803 (S.D. Fla. Mar. 6, 2012) and concluded:

The [Oriole Gardens] court held the cause of action was not barred by Florida’s five-year statute of limitations period…First, the initial letter informing the insured that its claim fell below the policy’s deductible contained no language clearly denying the claim…Second, the insurer’s correspondence and actions regarding the insured’s claim indicated that the claim was open and ongoing… We find this reasoning to be persuasive and applicable to the present case.

Readers may recall a recent case where the 3rd DCA reversed another statute of limitations ruling involving a Hurricane Wilma claim in Rizo v. State Farm Fla. Ins. Co.,  No. 3D12-3088 (Fla. 3rd DCA, Feb. 5, 2014).

These recent decisions indicate that it may be preferable, from a statute of limitations perspective, for insurer denial letters to be more explicit as to whether the claim is being denied. It should be noted, though, that such older claims which may not be barred by the statute of limitations often have a viable late notice defense. In addition, while not applicable in this case, we note that in 2011 the Florida Legislature shortened the limitations period for property insurance claims by specifying that such actions begin to run from the date of loss (not the date of policy breach).