Background
Maria and Christopher Suarez notified Citizens Property Insurance Corporation in September 2019 of alleged Hurricane Irma damage to their home from September 2017. Citizens denied coverage, asserting that the insureds had not promptly reported the loss and had failed to provide requested documents under the policy. The Suarez plaintiffs then sued Citizens for breach of contract, attaching a public adjuster’s estimate seeking $141,580.36.
Citizens raised the late notice and alleged noncompliance with post-loss obligations as affirmative defenses. In March 2021, it served each plaintiff a $100 proposal for settlement. After the offers were rejected, the trial court granted Citizens summary judgment. Citizens sought fees and costs under Florida Statutes section 768.79, but the trial court denied fees after finding the nominal offers were not made in good faith.
The Court’s Holding
The Third District reversed. It held that the trial court abused its discretion by finding Citizens’ $100-per-plaintiff offers were made in bad faith. Citizens had a reasonable foundation for treating its exposure as nominal: the two-year delay in reporting the hurricane claim and the Suarez plaintiffs’ failure to comply with Citizens’ requests for documents.
The relevant inquiry is whether the insurer had a reasonable basis for a nominal offer when it made the offer, the court explained. The trial court improperly relied on Citizens’ lack of pre-offer discovery and the public adjuster’s estimate. The reasons supporting Citizens’ coverage denial were apparent before suit and supported its view that the claim had nominal value.
Key Takeaways
- A nominal proposal for settlement may be made in good faith when the offeror has a reasonable basis to believe its exposure is nominal.
- In a homeowners-insurance dispute, an insured’s late notice and failure to satisfy post-loss obligations can supply that reasonable basis.
- The timing of discovery does not control the good-faith analysis when the basis for the offer already existed.
Why It Matters
The decision reinforces that a public adjuster’s damages estimate does not by itself establish substantial exposure when an insurer has viable coverage defenses based on the insured’s noncompliance with policy conditions. Insurers evaluating nominal settlement offers should assess whether their contemporaneous coverage defenses provide a reasonable foundation for the offer.
The case was remanded with instructions to grant Citizens’ fee motion and determine the amount of attorney’s fees.