Skip to Content

June 2, 2015

On May 14, 2015, the Supreme Court of Florida handed down an important victory to Citizens Property Insurance Corporation. The high court declared that Citizens is shielded from statutory bad-faith suits, and that bad faith is not a “willful tort,” which is a statutory exception to the immunity granted by the Florida Legislature. The vindication was a long time coming for Citizens. The Legislature created Citizens with a broad immunity that seemed clearly intended to shield it from bad-faith actions. But the immunity has been tested in the courts steadily over the years.

The battle started back in 2009 when the Fifth District Court of Appeal issued Citizens v. Garfinkel, 25 So. 3d.62 (Fla. 5th DCA 2009). In the underlying case, Mr. Garfinkel had convinced the trial judge to let him assert a statutory bad-faith claim against Citizens. Citizens responded by requesting a writ of prohibition from the Fifth District, saying its statutory immunity prevented the trial judge from subjecting Citizens to bad-faith liability. The Fifth District agreed, first finding the authority to issue a writ of prohibition, and then holding Citizens was immune from statutory bad-faith suits. But even then, in 2009, everyone knew the law of the land would be written ultimately by Florida’s Supreme Court. Over the six years since that initial victory, there were many pitched contests.

The procedural half of the Garfinkel decision was reversed by Florida’s Supreme Court three years later in Citizens vs. San Perdido Ass’n, 104 So. 3d 344 (Fla. 2012). The court said it was inappropriate to grant a writ of prohibition, and that Citizens could just appeal an Order allowing a policyholder to use it for bad faith at the end of the bad-faith case. The San Perdido Ass’n decision left intact the second part of the Garfinkel opinion, which held Citizens immune from the statutory insurance bad-faith claims.

The value of Citizens’ immunity was greatly diminished by the San Perdido Ass’n case. Citizens could be subjected to the full length and breadth of a bad-faith case, all the way through a verdict and judgment, and allowed to enforce its immunity only on appeal at the end of the bad faith case. It would seem an immunity designed to ward off such cases in the first place could – and should – be enforced earlier in the proceedings. Better to be spared the pain of a bad-faith trial in the first place, than allowed to vindicate yourself only after a long, expensive trek through a bad-faith suit.

Meanwhile, Citizens was sued for bad faith by the Perdido Sun Association (not the same as the San Perdido Ass’n plaintiff). The trial court applied what was left of the Garfinkel decision and dismissed the bad-faith action. The Association appealed, and the First District reversed, ruling that Citizens was not immune from a statutory insurance bad-faith case. The First District declared a conflict with the immunity ruling in Garfinkel and certified the question to the Supreme Court.

The collision between Garfinkel and Perdido Sun Ass’n has now been resolved in favor of Citizens’ immunity. The Supreme Court has quashed the First District’s decision in Perdido Sun Ass’n, approved the substantive section of the Fifth District’s decision in Garfinkel, and reinstated the case back to the First District to dismiss the Association’s bad-faith claim against Citizens. It took six long years of litigation in the appellate courts to get this final answer.

But of course, there’s always a sequel. Stay tuned.