In this case, Plaintiffs filed a Breach of Contract lawsuit in May of 2021 and accepted a Proposal for Settlement on April 20, 2023, after Section 624.1551, Florida Statutes became effective in December of 2022.

Prior to enactment of Section 624.1551, Florida Statutes, the Florida Supreme Court has consistently held that an action for statutory bad faith is not ripe “until there is a determination of liability and extent of damages owed on the first-party insurance contract. Vest v. Travelers Ins. Co., 753 So. 2d 1270, 1276 (Fla. 2000) (citing Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So. 2d 1289, 1291 (Fla. 1991). Accordingly, Plaintiffs thought acceptance of a Proposal for Settlement without any release agreement requiring confidentiality would perfect a bad faith cause of action.

Thus, Plaintiffs accepted a Proposal for Settlement with the intent to file a bad faith lawsuit, and without considering whether or not Section 624.1551, Florida Statutes, would apply. Plaintiffs also attached the Proposal for Settlement to the Complaint.

The Court ruled that if Plaintiffs are relying upon the Proposal for Settlement to determine the extent of liability under the homeowner’s insurance contract, then the cause of action (under prior law) did not accrue until after Section 624.1551, Florida Statutes became effective. Therefore, the Court found Section 624.1551 appropriately precludes the bad faith cause of action and the case was dismissed with prejudice.

In this case, Plaintiffs accepted a Proposal for Settlement in the underlying Breach of Contract matter and then immediately went back to court to file a bad faith lawsuit. However, Plaintiffs did not attach the Proposal for Settlement to the Complaint, and never pled the determination of liability and extent of damages.

Here, the matter was not ripe as pled within the four corners of the Complaint, and our client argued the lack of subject matter jurisdiction in its Motion to Dismiss. Plaintiffs agreed to amend the Complaint, although once confronted with the fact that there is no event which occurred prior to the enactment of Section 624.1551, Florida Statutes, that can be attributed to a determination of liability and damages under the homeowner’s insurance contract, Plaintiffs dismissed the lawsuit without prejudice.