Joan Riley v. Heritage Property & Casualty Insurance Company

• Court: Court of Appeals for the Eleventh Circuit
• Decided: February 21, 2025
• Docket: 23-11678
• Status: Unpublished

Opinion

USCA11 Case: 23-11678 Document: 50-1 Date Filed: 02/21/2025 Page: 1 of 12

[DO NOT PUBLISH] In the United States Court of Appeals For the Eleventh Circuit

____________________

No. 23-11678 Non-Argument Calendar ____________________

JOAN RILEY, LINDA SCOTT, Individually and on behalf of all others similarly situated, Plaintiffs-Appellants, versus HERITAGE PROPERTY & CASUALTY INSURANCE COMPANY,

Defendant-Appellee.

Appeals from the United States District Court for the Southern District of Florida USCA11 Case: 23-11678 Document: 50-1 Date Filed: 02/21/2025 Page: 2 of 12

2 Opinion of the Court 23-11678

D.C. Docket No. 1:22-cv-22893-RNS ____________________

No. 23-12283 Non-Argument Calendar ____________________

JAMES WILLIE WILLIAMS, WILLIE MAE WILLIAMS, CRISTOBALINA FERNANDEZ, NERITZA CAIN, Plaintiffs-Appellants, versus UNIVERSAL PROPERTY & CASUALTY INSURANCE CO.,

Appeals from the United States District Court for the Southern District of Florida D.C. Docket No. 1:22-cv-22890-KMW ____________________ USCA11 Case: 23-11678 Document: 50-1 Date Filed: 02/21/2025 Page: 3 of 12

23-11678 Opinion of the Court 3

Before ROSENBAUM, GRANT, and LAGOA, Circuit Judges. PER CURIAM: In this consolidated appeal, Appellants bring breach-of-con- tract actions against two insurance companies for failure to pay in- terest on untimely payments for awarded claims. The district courts below dismissed Appellants’ actions because: (1) Appellants failed to identify an express contractual term in the applicable in- surance policies that obligated the insurers to pay interest in the event of late payment and (2) Appellants’ attempt to predicate their claims on Fla. Stat. § 627.70131(5)(a)’s interest-payment provision was precluded by Subsection 5(a)’s bar on private actions for viola- tions of its provisions. After careful review, we affirm. I. FACTUAL AND PROCEDURAL BACKGROUND Plaintiffs Joan Riley and Linda Scott (together, “the Riley Plaintiffs”) purchased residential property insurance policies from Defendant Heritage Property & Casualty Insurance Company. Plaintiffs Willie James Williams, Willie Mae Williams, Cristobalina Fernandez, and Neritza Cain (collectively, the Williams Plaintiffs, and together with the Riley Plaintiffs, “Appellants”) purchased resi- dential property insurance policies from Defendant Universal Property and Casualty Insurance Company (together with Herit- age, “Appellees”). Primarily due to Hurricane Irma back in 2017, Appellants’ respective homes incurred damage, which Appellants sought cov- erage for from Appellees. The parties failed to agree on the value of the damage in each case, so they submitted their disputes to USCA11 Case: 23-11678 Document: 50-1 Date Filed: 02/21/2025 Page: 4 of 12

4 Opinion of the Court 23-11678

appraisal panels which awarded each Appellant some amount of compensation. Appellees paid out the prescribed awards, but Ap- pellants allege that Appellees failed to make these payments in a timely manner, triggering an obligation to pay interest on those payments. Appellees did not pay the interest. Accordingly, the Ri- ley Plaintiffs brought suit against Heritage for breach-of-contract, contending that their policies’ loss-payment provision entitled them to interest. And the Williams Plaintiffs filed a similar suit against Universal. Appellants’ insurance policies’ loss payment provisions are substantively similar.1 As relevant to this appeal, none of the

1 The Riley Plaintiffs’ policies provided:

Within 90 days after we receive notice of an initial, reopened, or supplemental property insurance claim from you, where for each initial, reopened, or supplemental property insurance claim, we shall pay or deny such claim or portion of such claim, unless there are circumstances beyond our control which reasonably prevent such payment. Paragraph c. above does not form the sole basis for a private cause of action against us. The Williams Plaintiffs’ policies provided: Under Florida Statutes we are required to pay or deny an ini- tial, reopened, or supplemental property insurance claim, within ninety (90) days of notice of such claim unless there are reasonable circumstances which prevent us from so doing. Our failure to comply with this paragraph shall not form the sole basis for an action against us for breach of contract under this policy or for benefits under this policy. USCA11 Case: 23-11678 Document: 50-1 Date Filed: 02/21/2025 Page: 5 of 12

23-11678 Opinion of the Court 5

policies contained a term obligating Appellees to pay interest in the event of late payment. But Appellants claimed that their policies implicitly incorporated Fla. Stat. § 627.70131(5)(a) 2, which man- dates an insurer to pay interest in the event it fails to make payment on a claim within a statutorily prescribed time. Appellees moved to dismiss the respective actions, which both district courts granted with prejudice. The district courts found that because Appellants’ breach-of-contract actions were ul- timately predicated on Subsection 5(a), they ran headlong into Sub- section 5(a)’s bar on pursuing a private cause of action based solely on an insurer’s failure to comply with the subsection. Both deci- sions were timely appealed, and in light of the overlapping factual allegations and basis for dismissal, we ordered the two actions con- solidated for purposes of appeal. II. STANDARD OF REVIEW We review de novo a Federal Rule of Civil Procedure 12(b)(6) dismissal for failure to state a claim, “accepting the allega- tions in the complaint as true and construing them in the light most favorable to the plaintiff.” Belanger v. Salvation Army, 556 F.3d 1153,

2 The Statute was amended in 2021. The relevant interest provision was un- changed, but now appears in a different subsection. See Fla. Stat. § 627.70131(7)(a) (2022). Neither Party contends that the amendment substan- tively effected the statute or its applicability to this appeal. Like the district courts below, we refer to the applicable statutory section as (5)(a), even though it is now codified at (7)(a). USCA11 Case: 23-11678 Document: 50-1 Date Filed: 02/21/2025 Page: 6 of 12

6 Opinion of the Court 23-11678

1155 (11th Cir. 2009). We also review a district court’s interpreta- tion of a statute de novo. Id. III. ANALYSIS Appellants’ insurance policies with Appellees do not contain a standalone contractual provision obligating interest in the event of late payment of a claim. Despite the absence of any such provi- sion, Appellants nevertheless pursue breach-of-contract actions against Appellees for their alleged failure to pay out interest on un- timely claims payments. Appellants argue that Appellees are con- tractually obligated to pay them interest because their policies im- plicitly incorporate Fla. Stat. § 627.70131(5)(a), which contains an interest-payment provision in the event of late payment. But predicating their breach-of-contract claims on Subsec- tion 5(a) cannot salvage those claims. Even granting Appellants’ contention that their policies implicitly incorporate Subsection 5(a)’s interest-payment provision, Subsection 5(a) itself, as inter- preted by binding Florida precedent, forecloses Appellants’ breach- of-contract actions. Fla. Stat. § 627.70131(5)(a) provides as follows: Any payment of an initial or supplemental claim ... made 90 days after the insurer receives notice of the claim, or made more than 15 days after there are no longer factors beyond the control of the insurer which reasonably prevented such payment, which- ever is later, bears interest at the rate set forth in s.55.03. Interest begins to accrue from the date the USCA11 Case: 23-11678 Document: 50-1 Date Filed: 02/21/2025 Page: 7 of 12

23-11678 Opinion of the Court 7

insurer receives notice of the claim. The provisions of this subsection may not be waived, voided, nullified by the terms of the insurance policy ... However, failure to comply with this subsection does not form the sole basis for a private cause of action. Id. (emphasis added). Florida law interprets the emphasized language above as “clos[ing] the door on any insured unless there is a viable independent cause of action” to seek interest on their claim. State Farm Fla. Ins. Co. v. Silber, 72 So. 3d 286, 290 (Fla. 4th Dist. Ct. App. 2011). In other words, Subsection 5(a) bars any private action predicated solely on non-compliance with Subsection 5(a). In Taylor v. State Farm Fla. Ins. Co., Florida’s Fifth District Court of Appeal clarified that “a standalone independent obligation to pay interest” can form the basis for a private action for breach- of-contract “that is not precluded by the statutory limitation on ac- tions.” 388 So. 3d 307, 311 (Fla. 5th Dist. Ct. App. 2024). 3 The court found that an insurance policy provision stating that “interest will be paid in accordance with § 627.70131(5)” gave rise to a private action for breach-of-contract because such a provision constitutes “a separate and independent loss payment provision” and “the only

3 Taylor was first issued subsequent to Appellants’ opening briefs and then re-

heard and reissued after the completion of the parties’ briefing. This opinion references only the superseding opinion. USCA11 Case: 23-11678 Document: 50-1 Date Filed: 02/21/2025 Page: 8 of 12

8 Opinion of the Court 23-11678

reference to section 5(a)…simply deals with the manner in which interest will be paid.” Id. at 310 (emphasis added). Crucially, however, in holding so, Taylor expressly distin- guished the district courts’ decisions in the consolidated cases be- fore us. As the Taylor court explained, while the plaintiffs’ claim there arose from an “express contractual promise to pay interest,” Appellants’ claims here were “statutory claims barely clothed as con- tractual ones.” Id. at 310 n.3 (emphasis added). Thus “those [i.e. Appellants’] statutory claims in breach-of-contract clothing are readily distinguishable from the true contractual claim…here, as the parties’ contract contains an express promise to pay interest.” Id. As the court held in Taylor, it is immaterial that Appellants couch their claims as sounding in breach-of-contract when the predicate basis for their claims is Subsection 5(a). Id. In such in- stances, Subsection 5(a)’s private action bar applies, as it is the de- fendants’ “failure to comply with [5(a)]” that actually “form[s] the sole basis for a private cause of action.” § 627.70131(5)(a). Indeed, in Sandra Safont, et al, v. State Farm Florida Ins. Co., this Court characterized a hypothetical insurance policy provision that “explicitly incorporated [5(a)] into the [p]olicy as giving rise to a claim for “breach of the statute rather than a breach of the[] con- tract.” 2025 WL 212286, at *3 n.4 (11th Cir. Jan. 16, 2025) (emphasis in original). We distinguished that hypothetical from the allega- tions before us, which, like Taylor, alleged contractual breach based on “a separate and independent loss payment provision USCA11 Case: 23-11678 Document: 50-1 Date Filed: 02/21/2025 Page: 9 of 12

23-11678 Opinion of the Court 9

that…provided for the payment of interest.” Id. at *3 (quoting Tay- lor, 388 So. 3d at 310). And review of the allegations presented in Appellants’ re- spective complaints confirms that their breach-of-contract claims are thinly disguised claims for statutory breach of Subsection 5(a). The Riley Plaintiffs’ complaint alleges that “[a]lthough not refer- enced in the Policy, Section 627.701317[5](a)…provides that inter- est must be included with [late claim payments]” and that “[a]s a result of Heritage’s failure to timely pay, Plaintiffs were entitled to payment of interest as required by the Policy’s Loss payment pro- vision and the statutory language incorporated in that provision.” (em- phasis added). The Williams Plaintiffs’ complaint makes substan- tively identical allegations. Such “statutory claims in breach-of- contract clothing” are not “true contractual claim[s]” and are there- fore precluded by Subsection 5(a)’s private action bar. See Taylor, 388 So. 3d 310 n.3. Besides conflicting with binding Florida precedent, Appel- lants’ “breach-of-contract via implied incorporation of Subsection 5(a)” theory lacks merit. Accepting Appellants’ contention 4 that

4 Appellants argue, without citation to any on-point authority, that Subsection

5(a)’s provision providing that “[t]he provisions of this subsection may not be waived, voided, nullified by the terms of the insurance policy,” along with Fl. Stat. § 627.418(1)’s requirement that policy terms “not in compliance with the requirements” of the insurance code “shall be construed” as being “in full com- pliance with” the code, somehow effect an implicit incorporation of Subsec- tion 5(a)’s interest-payment provision into all insurance policies. USCA11 Case: 23-11678 Document: 50-1 Date Filed: 02/21/2025 Page: 10 of 12

10 Opinion of the Court 23-11678

Subsection 5(a) and Fl. Stat. § 627.418(1) effect an implicit incorpo- ration of Subsection 5(a)’s interest payment provision into all insur- ance policies renders its statutory bar provision a nullity—a plain- tiff could always circumvent the statutory bar on private actions by simply recharacterizing their claim as a contractual breach of the “implied” interest-payment provision. But relegating Subsection 5(a)’s statutory bar provision “to insignificance would run counter to the Supreme Court’s consistent refusal to construe statutes ‘in a manner that renders [them] entirely superfluous in all but the most unusual circumstances.’” In re Shek, 947 F.3d 770, 778 (11th Cir. 2020) (quoting Roberts v. Sea-Land Servs., Inc., 566 U.S. 93, 103 (2012)). Appellants offer no compelling response on this point. Thus, either (1) Subsection 5(a)’s statutory bar on private actions still precludes a breach-of-contract action under Appellants’ theory or (2) Appellants are wrong that Florida’s insurance code effects an implicit incorporation of Subsection 5(a)’s interest-

Besides lacking any real legal support for this contention, as the district courts and Appellees correctly note, Appellants fail to identify any material provision of the insurance policies that contravenes the terms of Subsection 5(a) or the Florida insurance code more generally. So Subsection 5(a)’s prohibition on waiving or nullifying its terms has no application here. Nor does § 627.418(1). At bottom, Appellants do not explain why Subsection 5(a)’s interest payment provision must be impliedly incorporated into every insurance policy. The above provisions Appellants rely on simply invalidate policy terms that di- rectly conflict with the Florida code. Here, Appellees’ insurance policies do not contain terms governing interest payment that conflict with Subsection 5(a) for they do not contain terms obligating interest payments at all. USCA11 Case: 23-11678 Document: 50-1 Date Filed: 02/21/2025 Page: 11 of 12

23-11678 Opinion of the Court 11

payment provision. Regardless, Appellants’ breach-of-contract claims fail. Appellants rely heavily on the Florida Supreme Court’s deci- sion in Found. Health v. Westside EKG Assocs., 944 So. 2d 188 (Fla. 2006) to support their theory, but that case has no bearing on the proper interpretation of Subsection 5(a). There, the Florida Su- preme Court held that the “prompt pay provisions” of the Health Maintenance Organization (“HMO”) Act are implicitly incorpo- rated into HMO contracts to establish a breach-of-contract. Id. at 195–97. Besides dealing with a different statute altogether, Westside predicated its holding on two immediately distinguishable facts: (1) that the prompt pay provision is impliedly incorporated into all HMO contracts because “a number of other provision reveal [that] that ‘prompt pay provision’ serves an integral role in providing sub- stance…to the rights of subscribers and responsibilities of HMOs established in the HMO Act” and (2) that “the HMO Act does not foreclose a common law contract action for breach of the statuto- rily imposed prompt payment provision.” Id. at 196. Appellants provide no analogous rationale justifying implicit incorporation of Subsection 5(a)’s interest-payment provision into every insurance policy. But more significantly, unlike the HMO Act, Subsection 5(a) does foreclose private actions for breach of the statutorily imposed interest-payment provision. Thus, as the dis- trict courts correctly reasoned, it would be “illogical for the inter- est-payment requirement of Subsection (5)(a) to be imported into the policy…without also incorporating Subsection (5)(a)’s private- USCA11 Case: 23-11678 Document: 50-1 Date Filed: 02/21/2025 Page: 12 of 12

12 Opinion of the Court 23-11678

cause-of-action bar.” Williams, 2023 WL 3750608, at *1 (alterations adopted) (quoting Riley, 2023 WL 2988847, at *3). That is the im- movable object Appellants cannot surmount—dressing up Appel- lees’ alleged statutory violation as a contractual breach cannot fa- cilitate bypass of Subsection 5(a)’s private action bar. IV. CONCLUSION For these reasons, we affirm the dismissal of the Appellants’ breach-of-contracts claims. AFFIRMED.