CHAD LORD vs FEDNAT INSURANCE COMPANY

• Court: District Court of Appeal of Florida
• Decided: June 23, 2023
• Docket: 22-1648
• Status: Published

Opinion

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FIFTH DISTRICT

NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

CHAD LORD,

Appellant,

v. Case No. 5D22-1648 LT Case No. 2018-CA-000428

FEDNAT INSURANCE COMPANY,

Appellee.

________________________________/

Opinion filed June 23, 2023

Nonfinal Appeal from the Circuit Court for Flagler County, Terence R. Perkins, Judge.

Matthew Struble, of Struble, P.A., Indialantic, for Appellant.

Lauren J. Smith, of Luks, Santaniello, Petrillo, Cohen & Peterfriend, Stuart, for Appellee.

HARRIS, J.

Appellant, Chad Lord, appeals the trial court’s non-final order denying

his motion for leave to amend his complaint to assert a claim for punitive damages. Because Appellant has not demonstrated reversible error, we

affirm.

On July 9, 2017, Appellant’s house was struck by lightning, causing

significant damage to his home. That same day, he reported the claim to his

homeowner’s insurance company, FedNat Insurance Company (“FedNat”).

Over the next several weeks, FedNat ordered inspections of the property,

prepared numerous status reports, and provided an estimate for the structural

damage caused by the lightning strikes. However, two months after the

incident, FedNat had still not assessed the electrical component damages

claimed by Appellant. On October 20, 2017, Appellant filed a civil remedy

notice (CRN) of insurer violations against FedNat.

In November 2017, FedNat’s litigation manager noted that the claim

had been open for 120 days with no coverage determination, that there was

a CRN pending, and requested that FedNat’s adjuster review the file to

complete the claim evaluation. The following month, some payments were

made to Appellant, but FedNat acknowledged that the payments were not

issued within 90 days of the reported claim as required by law.

On June 1, 2018, an appraisal award was entered in favor of Appellant

for an amount significantly greater than the payments previously tendered by

FedNat. Appellant filed a complaint against FedNat for violations of section

2 626.9541, Florida Statutes (2018), and in October 2021, he moved to amend

the complaint to add a claim for punitive damages. He argued that he was

entitled to assert a claim for punitive damages pursuant to section 624.155(5),

Florida Statutes (2021), because the acts giving rise to the alleged violations

occurred with such frequency as to indicate a general business practice and

these acts were in reckless disregard for the rights of the insured. Following

a hearing, the court denied Appellant’s motion, finding, inter alia, that

Appellant failed to present a sufficient proffer to constitute a general business

practice as required by section 624.155(5). We agree.

A trial court’s decision on a motion for leave to amend a complaint to

add a punitive damage claim is reviewed de novo. See Progressive Select

Ins. Co. v. Ober, 353 So. 3d 1190, 1192 (Fla. 4th DCA 2023). “In any civil

action, no claim for punitive damages shall be permitted unless there is a

reasonable showing by evidence in the record or proffered by the claimant

which would provide a reasonable basis for recovery of such damages.” §

768.72(1), Fla. Stat. (2021). “The claimant may move to amend her or his

complaint to assert a claim for punitive damages as allowed by the rules of

civil procedure.” Id.; accord Fla. R. Civ. P. 1.190(f).

In his complaint, Appellant alleged violations of section

626.9541(1)(i)(3)(a) and (c)—failure to implement standards for proper

3 investigation of claims and failure to act promptly upon communications with

respect to claims. Section 624.155(5) allows for punitive damages if the

claimant can prove the acts giving rise to the violations occur with such

frequency as to indicate a general business practice and these acts are:

(a) Willful, wanton, and malicious;

(b) In reckless disregard for the rights of any insured; or

(c) In reckless disregard for the rights of a beneficiary under a life insurance contract.

§ 624.155(5), Fla. Stat. (2021). Appellant only claims entitlement to punitive

damages under section 624.155(5)(b). Accordingly, he must make a

reasonable showing by evidence in the record or by proffer that the alleged

violations constitute a general business practice and that the acts are in

reckless disregard for his rights as an insured.

In asserting that FedNat’s violations of section 626.9541(1)(i)(3)(a) and

(c) were a general business practice, Appellant primarily relies on the

deposition from FedNat’s vice president of claims, Brian Turnau, taken in

2018 during a separate unrelated case. In that deposition, Turnau stated that

in 2015, he was unaware of any written guidelines related to settling a claim

after receiving a CRN. Appellant also relies on the deposition of FedNat’s

field adjuster who testified that he was not aware of any guidelines for the

adjustment of lightning strike claims at the time FedNat adjusted Appellant’s

4 claim. Appellant argues that a jury could find that as a business practice,

FedNat failed to implement standards for the proper investigation of lightning

strike claims or that it at least failed to provide the guidelines to its adjusters.

To establish that an insurer committed violations with such frequency

as to indicate a general business practice, the insured must provide evidence

of violations beyond his own claim. See Jablonski v. St. Paul Fire & Marine

Ins. Co., No. 2:07-cv-00386, 2010 WL 1417063, at *1 (M.D. Fla. Apr. 7,

2010); see also Fox Haven of Foxfire Condo. IV Ass’n, Inc. v. Nationwide

Mut. Fire Ins. Co., No. 2:13-cv-399-FTM-29CM, 2015 WL 667935, at *6

(M.D. Fla. Feb. 17, 2015) (“Typically, a plaintiff establishes a general

business practice by demonstrating that the insurer also acted in [bad] faith

when evaluating numerous other claims.”); Shannon R. Ginn Constr. Co. v.

Reliance Ins. Co., 51 F. Supp. 2d 1347, 1353 (S.D. Fla. 1999) (“[I]t seems

clear that ‘general business practice’ means more than acting in the

proscribed manner in the plaintiff’s own claim.”). A claimant must show “other

acts” and not necessarily “other claims.” Jablonski, 2010 WL 1417063, at *1.

The only evidence to support a punitive damages claim provided by

Appellant is deposition testimony suggesting that FedNat had no specific

standards relating to settling claims after receiving a CRN or for adjusting a

lightning strike claim. Otherwise, the evidence established that the policies

5 and procedures for investigating and adjusting claims were contained in

FedNat’s claims manual. We conclude that, even if failing to have policies

that are specific to these types of claims violates section 626.9541(1)(i)(3), it

does not demonstrate that the acts giving rise to the violations occur with

such frequency as to establish a general business practice.

Accordingly, we agree with the trial court that Appellant has not made

a reasonable showing that FedNat’s alleged violations of section

626.9541(1)(i)(3)(a) and (c) occurred with such frequency as to indicate a

general business practice. See Howell-Demarest v. State Farm Mut. Auto.

Ins. Co., 673 So. 2d 526, 528 (Fla. 4th DCA 1996) (explaining that insured

only established that insurer engaged in practice in insured’s case and three

other cases cited by insured, and that insured would need to demonstrate

insurer engaged in practice far more frequently than that); see also

Sandpiper Isle Condo. Ass’n v. Empire Indem. Ins. Co., No. 2:21-cv-105-

JLB-MRM, 2022 WL 2316999, at *1 (M.D. Fla. June 28, 2022) (finding

insured failed to plead general business practice because beyond its own

claim, insured only identified one other comparable instance); cf. Hogan v.

Provident Life & Accident Ins. Co., 665 F. Supp. 2d 1273, 1289 (M.D. Fla.

2009) (finding insured adequately pled claim for punitive damages by

6 alleging that insurer committed similar acts of bad faith in more than 4,000

other claims).

Because we conclude that Appellant has not reasonably shown

evidence of other instances to establish a general business practice of

committing the alleged violations, we need not reach the next step of whether

he established the acts were in reckless disregard for his rights. The order

denying Appellant’s motion for leave to amend his complaint to assert a claim

for punitive damages is AFFIRMED.

EISNAUGLE and PRATT, JJ., concur.