Citizens Property Insurance Corp., etc. v. Perdido Sun Condominium Association, Inc., etc.

Supreme Court of Florida
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No. SC14-185
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CITIZENS PROPERTY INSURANCE CORP., etc.,
Petitioner,
vs.
PERDIDO SUN CONDOMINIUM ASSOCIATION, INC., etc.,
Respondent.
[May 14, 2015]
PARIENTE, J.
The issue in this case is whether the Florida Legislature intended Citizens
Property Insurance Corporation, a state-created entity that provides property
insurance, to be liable for statutory first-party bad faith claims as an exception to
its statutory immunity from suit. The First District Court of Appeal in Perdido Sun
Condominium Ass’n v. Citizens Property Insurance Corp., 129 So. 3d 1210 (Fla.
1st DCA 2014), determined that the “willful tort” statutory exception to Citizens’
immunity applied to statutory first-party bad faith claims and certified conflict with
the Fifth District Court of Appeal’s decision in Citizens Property Insurance Corp.
v. Garfinkel, 25 So. 3d 62 (Fla. 5th DCA 2009), disapproved on other grounds by
Citizens Property Insurance Corp. v. San Perdido Ass’n, 104 So. 3d 344 (Fla.
2012), which held to the contrary that Citizens is statutorily immune. Additionally,
the First District passed upon the following question, which it certified to be of
great public importance:
WHETHER THE IMMUNITY OF CITIZENS PROPERTY
INSURANCE CORPORATION, AS PROVIDED IN SECTION
627.351(6)(s), FLORIDA STATUTES, SHIELDS THE
CORPORATION FROM SUIT UNDER THE CAUSE OF ACTION
CREATED BY SECTION 624.155(1)(b), FLORIDA STATUTES[,]
FOR NOT ATTEMPTING IN GOOD FAITH TO SETTLE
CLAIMS?
Perdido Sun, 129 So. 3d at 1213.1
We conclude, as more fully explained below, that a statutory first-party bad
faith cause of action under section 624.155(1)(b) is not an exception to the
immunity granted to Citizens by the Legislature. Accordingly, we quash Perdido
Sun, approve the reasoning of Garfinkel on this issue, and answer the certified
question in the affirmative.
BACKGROUND
After prevailing in a breach of contract action against its insurance company,
Citizens Property Insurance Corporation, Perdido Sun Condominium Association
sued Citizens a second time. In the second lawsuit, Perdido Sun alleged a statutory
1. We have jurisdiction. See art. V, § 3(b)(4), Fla. Const.
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first-party bad faith claim, pursuant to section 624.155(1), Florida Statutes (2009),
which provides in relevant part:
(1) Any person may bring a civil action against an insurer
when such person is damaged:
....
(b) By the commission of any of the following acts by the
insurer:
1. Not attempting in good faith to settle claims when, under all
the circumstances, it could and should have done so, had it acted fairly
and honestly toward its insured and with due regard for her or his
interests[.]
Specifically, Perdido Sun claimed that Citizens (1) refused to pay the full
amount owed to Perdido Sun under the insurance policy; (2) refused to take part in
the required appraisal process and instead used that process in an attempt to
forestall litigation; (3) delayed payment of the appraisal award and improperly
attempted to condition payment of the award upon the execution of a universal
release; and (4) engaged in a pattern and practice of seeking to avoid or delay full
settlement of claims.
Citizens moved to dismiss the complaint, citing its immunity from suit under
section 627.351(6)(s)1., Florida Statutes (2009), which provides:
There shall be no liability on the part of, and no cause of action
of any nature shall arise against, any assessable insurer or its agents or
employees, the corporation or its agents or employees, members of the
board of governors or their respective designees at a board meeting,
corporation committee members, or the office or its representatives,
for any action taken by them in the performance of their duties or
responsibilities under this subsection. Such immunity does not apply
to:
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a. Any of the foregoing persons or entities for any willful tort;
b. The corporation or its producing agents for breach of any
contract or agreement pertaining to insurance coverage;
c. The corporation with respect to issuance or payment of debt;
d. Any assessable insurer with respect to any action to enforce
an assessable insurer’s obligations to the corporation under this
subsection; or
e. The corporation in any pending or future action for breach of
contract or for benefits under a policy issued by the corporation; in
any such action, the corporation shall be liable to the policyholders
and beneficiaries for attorney’s fees under s. 627.428.
(Emphasis added.)
Perdido Sun relied on the statutory exception to immunity for “any willful
tort” in asserting that immunity did not apply. The trial court disagreed and
dismissed the complaint with prejudice, reasoning that a statutory bad faith action
under section 624.155 was not among the specifically listed exceptions to the
immunity provided in section 627.351(6)(s). On appeal, the First District reversed,
concluding that “Citizens’ immunity does not extend to the ‘willful tort’ of failing
to attempt in good faith to settle claims as provided by section 624.155.” Perdido
Sun, 129 So. 3d at 1213. The First District certified conflict with Garfinkel, 25 So.
3d 62, which had held to the contrary—that a cause of action for statutory first-
party bad faith did not constitute a “willful tort” for purposes of the statutory
exceptions from Citizens’ immunity. Perdido Sun, 129 So. 3d at 1213. The First
District also certified the question to be one of great public importance. Id.
ANALYSIS
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 The issue in this case turns on a question of statutory construction—namely,
whether the Legislature intended Citizens to be liable for statutory first-party bad
faith claims. The answer to this question requires us to review the specific
exceptions that the Legislature provided to Citizens’ statutory immunity and to
examine whether liability on this ground is included within the statutory phrase
“willful tort.” Perdido Sun argues, and the First District agreed, that a statutory
bad faith cause of action constitutes a “willful tort” for purposes of the statutory
immunity. Citizens counters that a statutory bad faith cause of action is not a tort.
Both Perdido Sun and Citizens rely on statutory construction principles to support
their respective positions.
As the issue presented involves a question of statutory construction, this
Court’s review is de novo. See Diamond Aircraft Indus., Inc. v. Horowitch, 107
So. 3d 362, 367 (Fla. 2013). In applying principles of statutory construction,
courts must “begin with the ‘actual language used in the statute.’ ” Raymond
James Fin. Servs., Inc. v. Phillips, 126 So. 3d 186, 190 (Fla. 2013) (quoting Borden
v. E.–European Ins. Co., 921 So. 2d 587, 595 (Fla. 2006)). A court, in construing a
statute, is required to “give effect to legislative intent, which is the polestar that
guides the court in statutory construction.” Id. (quoting Gomez v. Vill. of
Pinecrest, 41 So. 3d 180, 185 (Fla. 2010)).
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In examining the relevant statutory provisions at issue, we find no support
that the Legislature intended for Citizens to be liable for a breach of the duty to act
in good faith by allowing its policyholders to bring a statutory first-party bad faith
cause of action. The clearest expression of legislative intent is found in the listed
exceptions to Citizens’ immunity. See § 627.351(6)(s)1., Fla. Stat. Although the
Legislature codified Citizens’ duty to handle claims in good faith, see
§ 627.351(6)(s)2., Fla. Stat., the Legislature never listed statutory first-party bad
faith claims as one of the exceptions to Citizens’ immunity. To the contrary, the
Legislature chose to immunize Citizens for “any action taken by [it] in the
performance of [its] duties or responsibilities under . . . subsection
[627.351(6)(s)],” which necessarily includes a breach of the duty of good faith.
If the Legislature had intended to exempt first-party bad faith claims from
Citizens’ statutory immunity, listing this category within section 627.351(6)(s)1.
would have been a simple and explicit way to indicate this. Certainly, the
Legislature knew how to accomplish an exception to the immunity because it
created a specific exception to the immunity for attorney’s fees, as authorized by
section 627.428, Florida Statutes. See § 627.351(6)(s)1.e., Fla. Stat.
As this Court has recognized, where the Legislature made one exception
clearly, if it had “intended to establish other exceptions it would have done so
clearly and unequivocally.” Dobbs v. Sea Isle Hotel, 56 So. 2d 341, 342 (Fla.
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1952). Accordingly, where the Legislature articulates clear exceptions to a statute,
“no other exceptions may be implied.” Garfinkel, 25 So. 3d at 65. As Garfinkel
observed, “because the Legislature identified five exceptions to its grant of
immunity, there is no reason to think that another grant would show up in a nearby
but separate paragraph, unless specifically identified as such.” Id. The Legislature
has not included statutory first-party bad faith claims among the limited exceptions
to Citizens’ immunity when it could have easily chosen to do so.
Besides the failure to include a specific exception for statutory causes of
action under section 624.155(1)(b)1., we do not agree with the First District’s
conclusion that the statutory cause of action for first-party bad faith is a tort or
specifically a “willful tort”—a principle that becomes clear after considering the
history of first-party bad faith causes of action. Unlike common law causes of
action for third-party bad faith, first-party bad faith actions are purely a creature of
statute that did not previously exist at common law. As explained by the Fifth
District in Garfinkel:
The reason why first-party bad faith claims are not considered
to be willful torts is best explained by examining the history of this
cause of action. A third-party bad faith action (that is, a claim against
one’s own insurer for failing in good faith to settle a third-party’s
claim, thus exposing the insured to liability in excess of the available
insurance coverage), was recognized in Florida as part of the common
law as early as 1938. The foundation for this claim is found in the
fiduciary nature of the insurance carrier’s relationship with the
insured. The carrier was required to act in good faith to negotiate a
settlement for the benefit of its insured, and not to protect its own
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interest alone. Opperman v. Nationwide Mut. Fire Ins. Co., 515 So.
2d 263, 265 (Fla. 5th DCA 1987), review denied, 523 So. 2d 578 (Fla.
1988). Because of the perceived absence of the fiduciary relationship,
however, there was no first-party bad faith action by an insured
against the insurer recognized at common law. See Allstate Indem.
Co. v. Ruiz, 899 So. 2d 1121 (Fla. 2005); State Farm Mut. Auto. Ins.
Co. v. Laforet, 658 So. 2d 55, 58-59 (Fla. 1995); Baxter v. Royal
Indem. Co., 285 So. 2d 652 (Fla. 1st DCA 1973); cert. discharged,
317 So. 2d 725 (Fla. 1975). Thus, unless the insured could allege an
independent tort such as fraud, the only relief available on a first-party
claim was a cause of action for breach of contract. Butchikas v.
Travelers Indem. Co., 343 So. 2d 816 (Fla. 1976); Rubio v. State
Farm Fire & Cas. Co., 662 So. 2d 956, 957 (Fla. 3d DCA 1995),
review denied, 669 So. 2d 252 (Fla. 1996); Opperman; Allstate Ins.
Co. v. Kelley, 481 So. 2d 989 (Fla. 5th DCA 1986).
The Legislature addressed this issue in 1982 by the adoption of
section 624.155, Florida Statutes. As our Supreme Court has
indicated, “[t]hrough this statute, the Legislature created a first-party
bad faith cause of action . . . .” Laforet, 658 So. 2d at 59.
Garfinkel, 25 So. 3d at 68. Thus, as the Fifth District succinctly stated, statutory
first-party bad faith causes of action “now exist in Florida not because they are
torts, but because they are a statutory cause of action. Accordingly, a first-party
bad faith claim cannot be wedged into the statutory exception for willful torts
because it is not a tort of any variety.” Id. at 68-69.
Citizens also argues that subjecting it to statutory first-party bad faith claims
would reduce the funds available to pay insureds’ claims for property damage so
that further amounts that might be awarded would be borne by the taxpayers.
Citizens asserts that is “antithetical to its enabling statute, which provides that
Citizens have the maximum financial resources to pay its claims.” A competing
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argument made by Perdido Sun is that unless Citizens is liable for amounts in
excess of the policy limits, the statutory obligation to act in good faith would be
meaningless. However, legislative intent must be determined primarily from the
language of the statute and not from this Court’s view of the best policy. See, e.g.,
Rollins v. Pizzarelli, 761 So. 2d 294, 299 (Fla. 2000) (“An interpretation of a
statutory term cannot be based on this Court’s own view of the best policy.”); State
v. Ashley, 701 So. 2d 338, 343 (Fla. 1997) (“[T]he making of social policy is a
matter within the purview of the legislature—not this Court.”).
In this case, Perdido Sun’s complaint does not allege that Citizens
committed a “willful tort.” As we have previously recognized, “where a plaintiff
claims a defendant engaged in egregious and outrageous actions, bad faith can be
elevated to a willful tort, an issue that could turn on the facts of the case.” Citizens
Prop. Ins. Corp. v. San Perdido Ass’n, 104 So. 3d 344, 355 n.7 (Fla. 2012).
Perdido Sun’s complaint is based solely on the statutorily created first-party bad
faith cause of action under section 624.155. No additional allegations of willful
misconduct outside of the statutory bad faith claim are alleged. Although the
complaint contains allegations that the conduct was “intentional, willful, wanton
and malicious or done in a reckless disregard for Perdido Sun’s rights,” these
allegations were made to preserve Perdido Sun’s right to add a count for punitive
damages and not to allege a separate willful tort. Because specific allegations of
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willful misconduct are not contained in the complaint, the trial court properly
dismissed the complaint.
CONCLUSION
Perdido Sun brought a first-party bad faith claim pursuant to section
624.155(1). That claim is a statutory cause of action and does not fall within the
willful tort exception to Citizens’ immunity under section 627.351(6)(s)1.
Therefore, we answer the certified question in the affirmative, quash the First
District’s decision in Perdido Sun, and approve the Fifth District’s reasoning in
Garfinkel on this issue. We remand this case to the First District with instructions
to reinstate the trial court’s order of dismissal.
It is so ordered.
LABARGA, C.J., and QUINCE and PERRY, JJ., concur.
LEWIS, CANADY, and POLSTON, JJ., concur in result.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
IF FILED, DETERMINED.
Application for Review of the Decision of the District Court of Appeal - Certified
Direct Conflict of Decisions
First District - Case No. 1D13-1951
(Escambia County)
Kara Berard Rockenbach of Methe & Rockenbach, P.A., West Palm Beach,
Florida; Raoul G. Cantero, III, David P. Draigh, and Ryan Andrew Ulloa of White
& Case LLP, Miami, Florida,
for Petitioner
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Charles S. Liberis, Jr. and Thomas F. Condon of the Liberis Law Firm, P.A.,
Pensacola, Florida,
for Respondent
Pamela Jo Bondi, Attorney General, Allen C. Winsor, Solicitor General, and
Rachel Erin Nordby, Deputy Solicitor General, Tallahassee, Florida,
for Amicus Curiae State of Florida
Mark Lawrence Zientz of the Law Offices of Mark L. Zientz, P.A., Miami,
Florida,
for Amicus Curiae Florida Workers’ Advocates
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