Chalfonte Condo. Apartment Ass'n, Inc. v. QBE Ins. Corp.

• Decision Date: 20 September 2012
• Docket Number: 08–10783 and 08–11337.,Nos. 08–10009,s. 08–10009
• Citation: 695 F.3d 1215
• Parties: CHALFONTE CONDOMINIUM APARTMENT ASSOCIATION, INC., Plaintiff–Appellee Cross–Appellant, v. QBE INSURANCE CORPORATION, Defendant–Appellant Cross–Appellee. Chalfonte Condominium Apartment Association, Inc., Plaintiff–Appellant, v. QBE Insurance Corporation, Defendant–Appellee. Chalfonte Condominium Apartment Association, Inc., Plaintiff–Appellee, v. QBE Insurance Corporation, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

695 F.3d 1215

CHALFONTE CONDOMINIUM APARTMENT ASSOCIATION, INC., Plaintiff–Appellee Cross–Appellant,

v.QBE INSURANCE CORPORATION, Defendant–Appellant Cross–Appellee.

Chalfonte Condominium Apartment Association, Inc., Plaintiff–Appellant,

v.QBE Insurance Corporation, Defendant–Appellee.

Chalfonte Condominium Apartment Association, Inc., Plaintiff–Appellee,

v.QBE Insurance Corporation, Defendant–Appellant.

Nos. 08–10009, 08–10783 and 08–11337.

United States Court of Appeals,

Eleventh Circuit.

Sept. 20, 2012.^*

Background: Insured brought suit against property y insurer, alleging breach of contract and breach of implied warranty of good faith and fair dealing in failing to pay for hurricane loss. After jury returned verdict awarding damages to insured and final judgment was entered, the United States District Court for the Southern District of Florida, No. 06–81046–CV–DMM, Donald M. Middlebrooks, J., 526 F.Supp.2d 1251, granted in part and denied in part parties' motions to amend judgment. Parties appealed, and the Court of Appeals, Dubina, Circuit Judge, 561 F.3d 1267, certified questions of law to Florida's Supreme Court. The Supreme Court of Florida, Quince, J., 94 So.3d 541, answered.

Holdings: The Court of Appeals held that:

(1) insured's first–party claims for breach of implied covenant of good faith and fair dealing were statutory bad–faith claims;

(2) Florida law did not provide private cause of action for failure to comply with statutory requirements for hurricane deductible notice;

(3) insurer's failure to comply with statutory requirements for hurricane deductible notice did not render provision void and unenforceable; and

(4) policy language did not require insurer to waiver its procedural right to post bond to stay execution of money judgment.

Monica Vila, Rodolfo Sorondo, Jr., Holland & Knight, LLP, Miami, FL, for Appellant in Nos. 08–10009, 08–11337.

Daniel S. Rosenbaum, John M. Siracusa, Richard Chambers Valuntas, Rosenbaum Mollengarden Janssen & Siracusa, PLLC, West Palm Bch, FL, for Appellee in Nos. 08–10009, 08–11337 and for Appellant in No. 08–10783.

Affirmed in part and reversed and remanded in part.Monica Vila, Rodolfo Sorondo, Jr., Holland & Knight, LLP, Miami, FL, for Appellant in Nos. 08–10009, 08–11337.

Daniel S. Rosenbaum, John M. Siracusa, Richard Chambers Valuntas, Rosenbaum Mollengarden Janssen & Siracusa, PLLC, West Palm Bch, FL, for Appellee in Nos. 08–10009, 08–11337 and for Appellant in No. 08–10783.

Anthony J. Russo, Butler Pappas Weihmuller Katz Craig, LLP, Tampa, FL, for Florida Defense Lawyers Ass'n and Federation of Defense & Corporate Counsel, Amici Curiae.

William Stewart Berk, Berk, Merchant & Sims, PLC, Monica Vila, Rodolfo Sorondo, Jr., Holland & Knight, LLP, Miami, FL, for Appellee in No. 08–10783.

Appeals from the United States District Court for the Southern District of Florida.

Before DUBINA, Chief Judge, CARNES, Circuit Judge, and RESTANI, ^** Judge.

PER CURIAM:

In October 2005, Hurricane Wilma caused extensive damage to property owned by Chalfonte Condominium Apartment Association, Inc. (“Chalfonte”). Chalfonte filed a claim with its property insurer, QBE Insurance Corporation (“QBE”), pursuant to an insurance policy providing property coverage to Chalfonte. Chalfonte submitted an estimate of damages to QBE in December 2005 then submitted a sworn proof of loss to QBE in July 2006. After a period of time, Chalfonte became dissatisfied with QBE's investigation and processing of its claim and filed suit against QBE in federal district court. In its amended complaint, Chalfonte asserted claims for declaratory judgment, breach of contract for failure to provide coverage, and breach of contract for the breach of the implied warranty of good faith and fair dealing. The complaint also claimed that QBE had violated Section 627.701(4)(a) of the Florida Statutes. QBE moved to dismiss that claim, and the district court granted its motion, concluding that Section 627.701(4)(a) does not create a private right of action.

The remaining claims proceeded to trial. The jury reached a verdict for Chalfonte on all of its claims and in a special verdict form awarded Chalfonte $7,868,211 for QBE's failure to provide coverage and $271,888.68 for breach of the implied warranty of good faith and fair dealing. The jury also found that the insurance policy did not comply with Section 627.701(4)(a) of the Florida Statutes, even though Chalfonte's claim based on that provision had been dismissed before trial.

The district court entered a final judgment in favor of Chalfonte in the amount of $8,140,099.68 and post-judgment interest. QBE filed a motion for judgment as a matter of law, a motion for new trial, and a motion to alter or amend the judgment. The district court denied all motions except the motion to alter or amend the judgment. The district court granted that motion and amended the judgment by applying the hurricane deductible contained in the policy. After the district court entered an amended judgment, QBE filed a notice of appeal.

On appeal, we certified five questions to the Supreme Court of Florida because these unanswered questions of state law affected the disposition of the case. Chalfonte Condo. Apartment Ass'n, Inc. v. QBE Ins. Corp., 561 F.3d 1267, 1274–75 (11th Cir.2009). The specific questions we certified were as follows:

(1) Does Florida law recognize a claim for breach of the implied warranty of good faith and fair dealing by an insured against its insurer based on the insurer's failure to investigate and assess the insured's claim within a reasonable period of time?

(2) If Florida law recognizes a claim for breach of the implied warranty of good faith and fair dealing based on an insurer's failure to investigate and assess its insured's claim within a reasonable period of time, is the good faith and fair dealing claim subject to the same bifurcation requirement applicable to a bad faith claim under Fla. Stat. § 624.155?

(3) May an insured bring a claim against an insurer for failure to comply with the language and type-size requirements established by Fla. Stat. § 627.701(4)(a)?

(4) Does an insurer's failure to comply with the language and type-size requirements established by Fla. Stat. § 627.701(4)(a) render a noncompliant hurricane deductible provision in an insurance policy void and unenforceable?

(5) Does language in an insurance policy mandating payment of benefits upon “entry of a final judgment” require an insurer to pay its insured upon entry of judgment at the trial level?

Id. at 1274–75.

Recently, the Supreme Court of Florida answered all the questions, save number two, in the negative. QBE Ins. Corp. v. Chalfonte Condo. Apartment Ass'n Inc., 94 So.3d 541 (Fla.2012). Because the state supreme court answered the first question in the negative, the court did not need to answer the second certified question, which had been rendered moot. Specifically, the state supreme court concluded that first-party claims are actually statutory bad-faith claims that must be brought under Section 624.155 of the Florida Statutes; that an insured cannot bring a claim against an insurer for failure to comply with the language and type-size requirements; that an insurer's failure to comply with the language and type-size requirements does not render a noncompliant hurricane deductible provision in an insurance contract void and unenforceable; and that a contractual provision mandating payment of benefits upon “entry of a final judgment” does not waive an insurer's procedural right to post a bond and stay the execution of the money judgment pending any appeal. Id. at 556. Accordingly, based on the Florida Supreme Court's answers to our certified questions, attached hereto as an appendix, we affirm in part and reverse in part the district court's judgment. We affirm the district court's judgment of dismissal of Chalfonte's claim under Section 627.701(4)(a) of the Florida Statutes, because an insured cannot bring a claim against an insurer for failure to comply with the language and type-size requirements established under that statutory provision, and we instruct the district court on remand to disallow any evidence of the policy's failure to comply with these requirements. We reverse the district court's order denying QBE a new trial and instruct the court on remand to bifurcate the contract claim from the bad faith claim and to apply the deductible to any judgment Chalfonte may obtain on retrial.

AFFIRMED in part, REVERSED and REMANDED in part.

APPENDIX

Supreme Court of Florida

____________

No. SC09–441

____________

QBE INSURANCE CORPORATION,

Appellant,

vs.

CHALFONTE CONDOMINIUM APARTMENT ASSOCIATION, INC.,

Appellee

[May 31, 2012]

CORRECTED OPINION

QUINCE, J.

This case is before the Court for review of five questions of Florida law certified by the Eleventh Circuit Court of Appeals as being determinative of a cause pending in that court and for which there appears to be no controlling precedent. We have jurisdiction. Seeart. V, § 3(b)(6), Fla. Const. Based on the facts and analysis outlined below, we answer the first, third, fourth, and fifth questions certified by the Eleventh Circuit in the negative. In doing so, we need not reach the second certified question.

FACTS

This action arises from an appeal to the United States Court of Appeals for the Eleventh Circuit wherein the plaintiff-appellee and cross-appellant Chalfonte Condominium Apartments Association, Inc. (Chalfonte) appealed the dismissal of claims under section 627.701(4)(a), Florida Statutes (2009), and the denial of a motion to enforce execution of the judgment, and the defendant-appellant and cross-appellee QBE Insurance Corporation (QBE) appealed the denial of motions for a new trial and for judgment as a matter of law.

The facts in this case are succinctly set forth in Chalfonte Condominium Apartment Ass'n v. QBE Insurance Corp., 561 F.3d 1267, 1269–70 (11th Cir.2009):

On October 24, 2005, Hurricane Wilma struck...