The Second District Court of Appeal, reversing a trial court's decision, ruled the 60-day cure period for bad faith by an insurer begins when the insured files a civil remedy notice — not when the insurer receives a copy of it. The decision broadens the number of situations in which insurers may be at risk of statutory bad faith claims brought by their insureds.

The Case

Serenity Harper was involved in an automobile accident on June 30, 2013 in which she sustained serious injuries. The GEICO Insurance Co. insured both Harper and the other driver, and Harper made claims under both the other driver's liability coverage and her own underinsured motorist, or UM, coverage.

On Dec. 10, 2013, contending her claims had not been promptly paid, Harper sued both the at-fault driver and GEICO.

GEICO subsequently paid Harper the at-fault driver's liability limits under his policy.

GEICO continued to refuse to pay Harper benefits under her UM policy and, on Dec. 18, 2013, she electronically filed a civil remedy notice pursuant to Florida Statutes Section 624.155 with the Department of Financial Services. Harper mailed a copy to GEICO on that same date, which GEICO said that it received on Dec. 26, 2013.

On Feb. 3, 2014, GEICO agreed to pay Harper her UM policy limit of $10,000. On that date, GEICO indicated that it would send payment and a release under separate cover, and GEICO mailed the settlement check to its attorneys on Febr. 10, 2014. The check and release, however, were not mailed to Harper's counsel until Feb. 21, 2014, 65 days after the CRN had been electronically filed with the DFS and mailed to GEICO.

Harper contended this payment was untimely under Section 624.155(3)(d), which requires that payment be made within 60 days of when the CRN is filed with the DFS for bad faith to be “cured.”

For its part, GEICO contended that its payment was timely under Section 624.155(3)(a) because it did not actually receive the CRN until Dec. 26 and payment was made within 60 days of that date.

The trial court agreed with GEICO, which had the effect of barring Harper's bad faith claim.

She appealed.

Florida Law

Section 624.155 provides:

(3)(a) As a condition precedent to bringing an action under this section, the department and the authorized insurer must have been given 60 days' written notice of the violation. If the department returns a notice for lack of specificity, the 60-day time period shall not begin until a proper notice is filed:

(c) Within 20 days of receipt of the notice, the department may return any notice that does not provide the specific information required by this section, and the department shall indicate the specific deficiencies contained in the notice. A determination by the department to return a notice for lack of specificity shall be exempt from the requirements of chapter 120.

(d) No action shall lie if, within 60 days after filing notice, the damages are paid or the circumstances giving rise to the violation are corrected.

(f) The applicable statute of limitations for an action under this section shall be tolled for a period of 65 days by the mailing of the notice required by this subsection or the mailing of a subsequent notice required by this subsection.

The Appellate Court's Decision

The appellate court reversed.

In its decision, the appellate court explained that Section 624.155(3)(d) “plainly” states that “[n]o action shall lie” if damages are paid or corrective action taken within 60 days after the insured files a CRN. Under current procedures, the appellate court continued, an insured files a CRN with the DFS electronically. The appellate court added that although the DFS also requires the insured to print a copy of the completed CRN from the DFS's website and send it to the insurer, the DFS considers the form to be “filed” when the insured clicks the “submit” button at the end of the electronic form.

At that time, the appellate court continued, the CRN is assigned a “filing number” and any changes must be made by clicking on “edit filing.”

The appellate court reasoned that the requirements of Section 624.155(3)(d) are met when the insured electronically files the CRN with the DFS, and that that action starts the 60 day cure period for the insurer. The appellate court then held that the 60 day cure period under Ssection 624.155:

begins when the CRN is electronically filed with the [DFS], and to avoid a bad faith action, the insurer must pay the claim or take corrective action within [60] days from the date the CRN is electronically filed.

The appellate court pointed out that “nothing” in Section 624.155 requires that an insurer actually receive the CRN before the 60 day cure period begins.

Indeed, the appellate court continued, starting the 60 day cure period only upon actual receipt of the CRN would lead to conflicts with the application of Section 624.155(3)(f), which tolls the statute of limitations for a bad faith action for a period of 65 days from the date the CRN is mailed to the insurer, because if the 60 day cure period does not start to run until after actual receipt of the CRN, “it would be possible in some cases for the statute of limitations to expire before the end of the sixty-day cure period.”

The appellate court found:

• The CRN was electronically filed by Harper with the DFS on Dec. 18, 2013;
• 60 days from that date was Feb. 16, 2014, which was a Sunday, making the end of the 60-day cure period Feb. 17, 2014; and
• GEICO did not mail the UM settlement payment to Harper's counsel until Feb. 21, 2014.

Therefore, the appellate court concluded, because GEICO did not pay Harper's claim within 60 days of the date the CRN was electronically filed with the DFS, it did not pay the claim within the 60-day cure period, and Harper could pursue her action for GEICO's alleged bad faith.

The case is Harper v. GEICO Insurance, No. 2D17-4987 (Fla. Ct. App. March 1, 2019). Attorneys involved include: David M. Caldevilla of de la Parte & Gilbert, Tampa; and J. Daniel Clark of Clark & Martino,  Tampa, for Appellant. Joshua J. Hartley, B. Richard Young, and Jordan M. Thompson of Young, Bill, Boles, Palmer & Duke, Tampa, for Appellee.

Steven A. Meyerowitz, Esq., is the Director of FC&S Legal, the Editor-in-Chief of the Insurance Coverage Law Report, and the Founder and President of Meyerowitz Communications Inc. As FC&S Legal Director, Mr. Meyerowitz, a member of the team that conceptualized FC&S Legal, provides daily analysis and commentary on the most significant insurance coverage law decisions from courts across the country and news regarding legislative and regulatory developments. A graduate of Harvard Law School, Mr. Meyerowitz was an attorney at a prominent Wall Street law firm before founding Meyerowitz Communications Inc., a law firm marketing communications consulting company.