Arce v. Citizens Property Insurance Company, 3D22-0722

The trial court granted the defendant’s motion for summary judgment by applying the presumption of prejudice in a case where the insureds submitted a claim for Hurricane Irma damages almost three years after landfall. The defendant relied in part on the insured’s record statement in which he “unequivocally revealed” he was aware of the alleged damage to the property right after the date of loss, yet reported the claim to the defendant almost three years later. The insureds attempted to explain away the recorded statement via declaration, but it failed to articulate why they were unaware of the alleged damage to their property for almost three years. As there was no record of evidence rebutting the presumption of prejudice, the trial court granted the defendant’s motion.

The Third District Court of Appeals upheld the trial court’s ruling by utilizing the following two-step analysis: first, the court must determine whether the notice was provided in a timely manner; and second, if the notice was untimely, the court must determine whether the insured rebutted the presumption of prejudice that arose from the untimely notice of the claim (see, Navarro v. Citizens Prop. Ins. Corp., 353 So. 3d 1276, 1279 (Fla. 3d DCA 2023)).

As to the first step, the court echoed the trial court’s decision and pointed to the recorded statement and the insureds’ failure to show recorded evidence as to why they were unaware of the damage or the possibility of damage to the property for more than three years.

Next, as to the second step, the court declined to adopt the “policy language exception” articulated in Perez v. Citizens Property Insurance Corp., 345 So. 3d 893 (Fla. 4th DCA 2022) for three reasons. First, the court states the “policy language exception,” which states the presumption of prejudice should not apply when the policy language expressly conditions the insurer’s contractual right to deny coverage upon a breach resulting in prejudice, frustrates the purpose of a prompt notice provision in that the insureds are (typically) in a better position to articulate when the damage happened. As such, because the insurer must adjust and pay a covered claim a timely manner, prejudice from a breach of the notice provision is “manifest.” Second, the court states the policy language in question “does nothing more than recognize that, for [defendant] to deny coverage, the insured must breach the policy and the breach must result in prejudice to [defendant].” Lastly, declining to utilize the “policy language exception” upholds to the court’s value of stability and predictability in law, as the court has either “unqualifiedly applied or favorably referenced the presumption of prejudice in cases involving policy language identical to the language in this case” in three cases within the last year.