## Facts

- A condominium association held a property insurance policy issued by an insurer for the 2005 policy term.
- Hurricane Wilma damaged the insured property in October 2005.
- The association submitted damage estimates and a sworn proof of loss, then disputed the insurer’s claim investigation and payment handling.
- The association sued in federal court asserting (i) declaratory relief, (ii) breach of contract for failure to provide coverage, (iii) breach of contract framed as breach of the implied covenant of good faith and fair dealing in claim handling, and (iv) violation of Florida’s hurricane deductible notice statute, Fla. Stat. § 627.701(4)(a).
- A jury found for the association on coverage and on the implied-covenant theory; it also found the policy’s hurricane deductible notice did not comply with § 627.701(4)(a)’s type-size and language requirements.
- The district court dismissed the statutory count for lack of a private cause of action and, post-verdict, reduced damages by applying the hurricane deductible despite the jury’s statutory noncompliance finding.
- On appeal, the Eleventh Circuit certified questions of Florida law to the Florida Supreme Court, including whether Florida recognizes a common-law first-party bad-faith claim, whether § 627.701(4)(a) permits private enforcement or invalidates a noncompliant deductible, and whether a “pay upon entry of final judgment” clause waives the right to stay execution pending appeal by posting bond.

## Issues

1. Whether Florida law permits a common-law first-party bad-faith claim pleaded as breach of the implied covenant of good faith and fair dealing in claim handling, apart from the statutory remedy in Fla. Stat. § 624.155.
2. Whether Fla. Stat. § 627.701(4)(a) creates a private cause of action for noncompliant hurricane deductible notice language and formatting.
3. Whether noncompliance with § 627.701(4)(a) renders a hurricane deductible provision void or unenforceable.
4. Whether a policy clause requiring payment upon “entry of a final judgment” waives the insurer’s procedural right to stay execution pending appeal by posting a supersedeas bond.

## Decision

- The court answered the certified questions (except one not reached) and returned the case to the federal appellate court for disposition.
- Florida does not recognize a common-law first-party bad-faith claim based on the implied covenant of good faith and fair dealing for claim handling; such claims must proceed, if at all, under § 624.155.
- Section 627.701(4)(a) does not create a private cause of action for violations of its hurricane deductible notice requirements.
- An insurer’s noncompliance with § 627.701(4)(a) does not render a hurricane deductible provision void or unenforceable.
- A policy provision requiring payment upon “entry of a final judgment” does not waive the insurer’s right to obtain a stay of execution pending appeal by posting bond.

## Legal Principles

- In Florida, first-party insurer bad-faith liability for claim handling is governed by the statutory scheme in Fla. Stat. § 624.155; a plaintiff may not bypass statutory prerequisites by recasting the claim as a common-law implied-covenant contract claim.
- A Florida statute regulating insurance policy language and formatting does not imply a private damages action absent clear legislative intent.
- Courts will not impose the remedy of voiding a policy provision for statutory noncompliance where the Legislature did not specify that penalty.
- Contract language will not be read as waiving procedural rights to appellate stays and supersedeas bonds unless the waiver is clear and express.

## Conclusion

The Florida Supreme Court held that first-party bad-faith claims must be brought under Florida’s statutory bad-faith framework, that § 627.701(4)(a) provides no private enforcement mechanism and does not invalidate noncompliant hurricane deductibles, and that standard “pay upon entry of final judgment” language does not eliminate an insurer’s right to stay execution pending appeal by posting bond.


QBE Ins. Corp. v. Chalfonte Condo. Apartment Ass’n, Inc., 94 So. 3d 541 (Fla. 2012)