Florida Court Restricts Litigation Notice Rule Under No-Fault

A 2001 amendment to Florida’s no-fault law that requires insureds to notify their insurer that they intend to sue cannot be applied retroactively to policies issued before the amendment was enacted.

The Florida Supreme Court has ruled that the amendment, known as the statutory presuit notice, constituted a “substantive change” to the statute and thus cannot be applied retroactively.

In so ruling, the state’s high court reversed a decision by the Third District court, which had held the notification amendment to be “merely procedural.”

The case, Menendez v. Progressive Express Insurance Co., Inc., involved Progressive’s denial of personal injury protection (PIP) benefits to an insured who was injured in a car accident covered under a policy that was issued before the enactment date of the 2001 amendment.

Writing for the court, Justice Barbara J. Pariente wrote, “In our view, the statute, when viewed as a whole, is a substantive statute.” The presuit notice provision is “not procedural” and “should not be given retroactive application.”

The statutory presuit notice provision enacted in late 2001 states that before filing any action for an overdue claim, the insurer must be provided with written notice of an intent to initiate litigation.

The Supreme Court acknowledged that the Legislature intended for the statutory presuit notice provision to be applied retroactively. However, the court said that even where the Legislature has expressly stated that a statute will have retroactive application, the court will reject retroactive application “if the statute impairs a vested right, creates a new obligation, or imposes a new penalty.”

Before the addition of the presuit notice provision, the law did not require an insured to provide notice to an insurer before filing an action for overdue benefits. The statute as amended in 2001 also mandates that the payment from the insurer must include interest and penalties not exceeding $250. Third, if the insurer pays within the additional time provided by the statute, the payment precludes the insured from bringing suit for late payment or nonpayment and shields the insurer from a claim for attorneys’ fees.

The insured argued that the amendment created various obligations and burdens that are substantive and therefore could only be applied prospectively. The insured also argue that the statutory presuit notice provision, as a whole, affects an insured’s ability to retain counsel because there is no longer a right to reasonable attorneys’ fees if the insurer subsequently pays the claim within the additional time prescribed by statute.

The Supreme Court said that the “most problematic provisions” of the statute are those which impose a penalty, implicate attorneys’ fees, grant an insurer additional time to pay benefits, and delay the insured’s right to institute a cause of action.

The ruling could affect other PIP claims.

“While this opinion officially holds the notice letter provision cannot be applied retroactively, this opinion will have potential implications on enforcing it on all PIP claims,” said Shawn Jewell, an attorney at Fisher, Rushmer, Werrenrath, Dickson, Talley & Dunlap, P.A. in Orlando, who practices in the area of insurance defense.

“Ultimately, quashing the Third District’s decision may challenge a loophole that PIP claimants have utilized to circumvent the statute to seek attorneys fees without providing notice to the insurer prior to initiating litigation.”