In the past several years, Florida homeowners have accounted for somewhere between 65 to 80 percent of all property lawsuits filed nationwide. In just this calendar year, insurers in the Florida market have either stopped writing business or have gone under. For instance, since February 2022, at least three insurers – Lighthouse Property Insurance, Avatar Property & Casualty, and St. John’s Insurance Co. – have been declared insolvent.

In an attempt to stabilize the marketplace, a few weeks ago, in a special session called by Governor Ron DeSantis, the Florida legislature passed a slew of new reforms. These new laws (SB 2-D  and SB 4-D (not at issue in this article) are now in effect as they were signed by the Governor on May 26, 2022.

This article focuses on the law’s three most impactful changes to the litigation landscape. We also specifically focus on mechanics of how the legislature tried to make those changes. Those three key areas are: (1) attorneys’ fee recovery in assignment of benefits lawsuits; (2) plaintiff fee multiplier recovery; and (3) elements underpinning statutory “bad faith” recovery.

No Fees for AOB’s

The Legislature amended two statutes, intended to ensure this new law applies equally to admitted and surplus carriers. Two years ago, the legislature enacted what became Florida Statutes §627.7152, which took a first “stab” at reducing attorneys’ fee recovery in assignments of benefits (AOB) cases by creating a “sliding-scale” approach to fee recovery in an AOB case.

This “sliding scale” requires a plaintiff to make a pre-suit settlement demand as part of a Notice of Intent to Initiate Litigation. In response, the insurer can accept that offer, make a counteroffer, or do nothing. At trial, a plaintiff’s fee recovery is based upon the difference between the amount of plaintiff’s judgment and the pre-suit settlement offer. If that difference is less than twenty-five percent of the disputed amount (the difference between the pre-suit demand and the insurer’s offer), the insurer recovers fees. If that difference is between at least twenty-five percent and less than fifty percent, each party bears their own fees and costs. If that difference is at least fifty percent, then the plaintiff is entitled to an award of reasonable attorney fees.

SB 2-D now eliminates this “sliding scale” and amends §627.7152(10) to say that fee recovery in AOB cases is only allowed under Florida Statutes §57.105, or Florida’s sanctions statute.

SB 2-D also amends Florida Statutes §627.428 (the fee recovery statute against admitted carriers) by adding subsection (4) which provides that the right to fees under this statute “may not be transferred to, assigned to, or acquired in any other manner by anyone other than a named or omnibus insured or a named beneficiary.”

Going further, the law amends the statutory right to fee recovery against surplus/non-admitted carriers: Florida Statutes §626.9373. The law does the same thing that it did to §627.428. It adds subsection (3) which provides that the right to fees under this statute “may not be transferred to, assigned to, or acquired in any other manner by anyone other than a named or omnibus insured or a named beneficiary.”

Presumption Against Fee Multipliers

The Florida legislature also attempted to limit the cases in which plaintiff’s attorneys recover two or three times more than their “Lodestar recovery” (the attorney’s hours worked multiplied by the attorney’s hourly rate). To do this, the legislature amended the statute created by the legislature’s attempt last year to lower exorbitant plaintiff fee recovery: §627.70152.

Section 627.70152(8) authorizes fee recovery under either §626.9373 (against surplus carriers) or §627.428 (against admitted carriers), both mentioned above, by creating that same sliding-scale method that used to be in place solely for AOB lawsuits. SB 2-D created subsection 8(c) which says that, when awarding fees, there is a strong presumption that

[T]he lodestar fee is sufficient and reasonable. Such presumption may be rebutted only in rare and exceptional circumstance with evidence that competent counsel could not be retained in a reasonable manner.

Requiring plaintiff’s attorneys to prove their case is a “rare and exceptional” one should make it more difficult for them to prove entitlement to a fee multiplier, especially in Florida where there is absolutely no shortage of attorneys willing to represent insureds in their lawsuits against their insurers.

New Standard for Statutory “Bad Faith”

The new law also takes Florida back to the future by amending Florida’s statutory vehicle for “bad faith” recovery, Section 624.155. The amendment appears to have been in response to the Cammarata case and its progeny.

Cammarata1 held that an appraisal award above and beyond what was initially adjusted is a “favorable resolution,” akin to a jury verdict in favor of a plaintiff. So armed with a favorable appraisal award and an expired Civil Remedy Notice, a plaintiff/insured in Florida could initiate a “bad faith” action against his or her insurer. This has caused insurers to not invoke appraisal as often as the process now carries an added risk of allowing an insured to “fast track” a “bad faith” case.

So in SB 2-D, the Legislature created a brand new statute, §624.1551, which arguably returns Florida to “pre-Cammarata” days. This section now reads:

Civil remedy actions against property insurers. Notwithstanding any provision of s. 624.155, a claimant must establish that the property insurer breached the insurance contract to prevail in a claim for extracontractual damages under s. 624.155(1)(b).”

While it remains to be seen how this new law will apply, it is anticipated that insurers will now use this new statute to argue that a plaintiff is not entitled to bring a “bad faith” action where a plaintiff has only secured an appraisal award above the amount adjusted. Such a recovery would not flow from a “breach of the contract.” In fact, it would be exactly the opposite; a recovery allowed for and authorized under the policy’s appraisal clause.

Thus, this new statute may allow courts to recede from Cammarata. In turn, this would likely cause insurers to invoke appraisal more often, which, generally speaking, allows for faster and less expensive insurance claim dispute resolutions.

The team at Wood, Smith, Henning & Berman will continue to monitor the application and impact of this significant legislation and will and keep you apprised of any developments.


1 Cammarata v. State Farm Florida Ins. Co., 152 So. 3d 606 (Fla. 3d DCA 2015).

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