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In Florida, “no claim for punitive damages shall be permitted unless there is a reasonable showing by evidence in the record or proffered by the claimant which would provide a reasonable basis for recovery of such damages.” § 768.72(1), Fla. Stat. (2023); see also Fla. R. Civ. P. 1.190(f).

In Lord v. FedNat Insurance Company, 2023 WL 4139152 (Fla. 5th DCA 2023), Plaintiff’s house sustained property damage due to a lightning strike on July 9, 2017.  He reported a claim to his insurance carrier that same day.  On October 20, 2017, Plaintiff filed a civil remedy notice (“CRN”) of insurer violations against the carrier since it had not completed its investigation.  Plaintiff subsequently filed suit against the carrier alleging that it failed to implement standards for proper investigation of claims and failure to act promptly upon communications with respect to claims, in violation of Section 626.9541, Florida Statutes.  Plaintiff then sought leave to add a claim for punitive damages pursuant to Section 624.155(5)(b), Florida Statutes because the acts giving rise to the alleged violations occurred with such frequency as to indicate a general business practice and those acts were in reckless disregard of Plaintiff’s rights.

The only evidence Plaintiff relied on was deposition testimony of the carrier’s Vice President of Claims and a Field Adjuster that the carrier did not have any written guidelines relating to settling a claim after receiving a CRN, or for the adjustment of lightning strike claims.

The trial court ruled that Plaintiff failed to make a reasonable showing that the carrier’s alleged violations of Section 626.541 occurred with such frequency as to indicate a general business practice.  The trial court’s ruling was affirmed on appeal by the Fifth District Court of Appeal.

The Point

There is no bright-line rule as to how many violations constitute a “general business practice” in order to assert a punitive damages claim pursuant to Section 624.155(5)(b).  However, such evidence must consist of violations beyond an insured’s own claim.

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