A Florida appeals court has ruled in favor of homeowner Cindy Vo, reversing a trial court’s dismissal of her bad faith lawsuit against Scottsdale Insurance Company. The decision underscores a key legal principle: new laws cannot retroactively eliminate a policyholder’s right to sue for bad faith insurance practices.
In 2020, Vo suffered hurricane damage to her home and filed a claim with Scottsdale Insurance Company. Scottsdale initially valued the damage at just $420.64 - an amount that didn’t even exceed the policy’s wind deductible, effectively denying Vo any compensation.
Disagreeing with this assessment, Vo hired a public adjuster who estimated the damage at $38,584. Scottsdale remained firm in its position, bringing in another adjuster who conveniently supported the company’s original low valuation.
Determined to challenge the decision, Vo filed a Civil Remedy Notice (CRN) alleging Scottsdale engaged in bad faith claims handling and statutory violations. The case ultimately went to appraisal, which resulted in an award of $34,545.66 - far higher than Scottsdale’s initial valuation. The insurer paid the amount, minus the policy’s deductible, and the breach of contract case was settled in 2021.
In 2022, Florida legislators passed section 624.1551, introducing new hurdles for policyholders seeking to sue insurers for bad faith. Under this law:
In 2023, Vo filed a bad faith lawsuit against Scottsdale, arguing that the insurer’s conduct throughout the claims process had been unfair and deceptive. Scottsdale moved to dismiss the case, citing the newly enacted section 624.1551. The insurer argued that Vo’s claim had settled through an appraisal and not a court ruling, meaning she had no legal standing under the new law. The trial court agreed with Scottsdale and dismissed the case, ruling that Vo had not met the new statutory requirements.
Vo refused to accept the dismissal and took her case to the First District Court of Appeal. She argued that section 624.1551 could not apply retroactively to her case since her right to sue had already vested in 2021 before the law was enacted. The appeals court agreed with her position and overturned the dismissal.
The court cited legal precedent, emphasizing that:
The ruling is a major win for your clients and sends a clear message: insurers cannot use newly enacted laws as a loophole to escape accountability for past misconduct.
This decision also affirms that appraisal awards do not erase an insurer’s potential bad faith. Just because an insurer eventually pays out a claim after a lengthy process does not mean it handled the claim fairly from the start. The appeals court’s ruling ensures that policyholders who experienced bad faith claim handling before the passage of section 624.1551 still have legal recourse.
Vo’s case highlights the challenges homeowners face when battling insurance companies over undervalued claims and delayed payments. You should advise clients to take proactive steps to protect their rights, including:
