IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT
NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
SUSANNE COOK,
Appellant,
v. Case No. 5D22-2334
LT Case No. 05-2021-CA-013837-X
FLORIDA PENINSULA INSURANCE COMPANY,
Appellee.
________________________________/
Opinion filed August 11, 2023
Appeal from the Circuit Court
for Brevard County,
Michelle L. Naberhaus, Judge.
Matthew Struble, of Struble, P.A.,
Indialantic, for Appellant.
Diane H. Tutt, of Conroy Simberg,
Hollywood, for Appellee.
MACIVER, J.
Susanne Cook (“Appellant”) appeals the trial court’s denial of her
motion for leave to amend her complaint to assert a claim for punitive
damages against Appellee, Florida Peninsula Insurance Company (“the
Insurance Company”). Appellant argues that the trial court erred because it
applied an improper standard as to the sufficiency of the evidence required
to assert a claim for punitive damages, and by ruling that the Insurance
Company’s misrepresentation to Appellant in the underlying lawsuit was a
mistake, and not intentional. We agree and therefore reverse the entry of the
trial court’s order and remand for further proceedings.
BACKGROUND—
Following the conclusion of a first-party lawsuit for windstorm
insurance benefits, Appellant filed a motion for leave to amend to assert a
claim for punitive damages, and a proposed amended complaint alleging bad
faith by the Insurance Company.
Appellant claimed that in the underlying lawsuit, the Insurance
Company ignored information in its own file confirming coverage for her
claim, used faulty data when it denied the claim, failed to conduct a proper
investigation of the claim, misrepresented the policy and coverages afforded
under the policy, and refused to issue payment for coverage under the policy
to restore the property to its pre-loss condition.
Specifically, Appellant claimed that prior to issuing its determination
letter, the Insurance Company failed to properly inspect the property and its
engineer relied on faulty data when rendering his report. Then, in its
determination letter to her, the Insurance Company removed two words from
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the provision in her policy that triggered coverage for her claim. In a claim
that involved water intrusion through doors and windows, the Insurance
Company removed the words “door” and “window” from its representation of
her policy language. Also, language was removed from the heading of the
cited provision and the lead-in paragraph was altered to provide that the
coverage was for the dwelling and personal property—not for the dwelling
and other structures—which further meaningfully changed the policy
language.
Appellant claimed the Insurance Company breached its duty of good
faith to her by not attempting to settle her claim when it could have and
should have done so. As a result, she suffered actual damages including but
not limited to attorney’s fees, public adjuster’s fees, expert fees, loss of use
and decrease in value of her property, loss of enjoyment of her property,
damaged credit, and general damages.
Appellant further claimed that the Insurance Company—as a business
practice—misrepresented pertinent facts or insurance policy provisions
relating to coverages at issue, intentionally omitted language to mislead
insureds and avoid paying claims, and failed to properly investigate claims.
Appellant detailed the actions taken by the Insurance Company in its
handling of her own claim and provided examples of three other similar
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claims. In the first two examples, Appellant presented copies of letters from
the Insurance Company to two other insureds that were similar in substance
to that which it sent to Appellant—denying coverage and misrepresenting the
terms of their policies by changing and omitting the language that would
trigger coverage. In the third example, Appellant presented excerpts from the
deposition testimony of a corporate representative of the Insurance
Company stating it did not retain an engineer to properly inspect reported
damage on another claim prior to denying coverage.
During the hearing held on Appellant’s motion, the trial court found
there had to be a showing of frequency of a general business practice of
more than three other claims for punitive damages to be asserted. Further,
the Insurance Company’s misrepresentation was a mistake. As a result, the
trial court denied Appellant’s motion for leave to amend her complaint to
assert a claim for punitive damages.
ANALYSIS—
Because the issues presented involve a question of law, our standard
of review is de novo. See Est. of Despain v. Avante Grp., Inc., 900 So. 2d
637, 644 (Fla. 5th DCA 2005). Under the de novo standard, this Court views
the record evidence and the proffered evidence in the light most favorable to
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the plaintiff and accepts said evidence as true for the purpose of reviewing
whether a reasonable basis exists for punitive damages. Id.
I.
The questions that we address first are what constitutes a sufficient
showing of frequency of a general business practice for punitive damages to
be asserted, and whether Appellant met that standard. The trial court
determined that Appellant was required to establish evidence of more than
three other claims and, having concluded that Appellant failed to do so,
entered the order now on appeal.
On a typical motion for leave to amend a complaint, the rules of civil
procedure require leave of court to be “given freely when justice so requires.”
Fla. R. Civ. P. 1.190(a). But a more rigorous standard is applied to a motion
for leave to amend a complaint to assert a punitive damages claim.
Section 768.72, Florida Statutes (2022), governs a plaintiff’s ability to
bring a punitive damages claim. It provides that “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); see also Fla.
R. Civ. P. 1.190(f). Further, “[t]he rules of civil procedure shall be liberally
construed so as to allow the claimant discovery of evidence which appears
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reasonably calculated to lead to admissible evidence on the issue of punitive
damages.” § 768.72(1), Fla. Stat. (2022).
A proffer of evidence supporting a punitive damages claim “is merely
a representation of what evidence the [party] proposes to present and is not
actual evidence.” Est. of Despain, 900 So. 2d at 644. “By allowing a punitive
damages claimant to satisfy his initial burden by means of a proffer, section
768.72 contemplates that a claimant might obtain admissible evidence or
cure existing admissibility issues through subsequent discovery.” Royal
Marco Point I Condo. Ass’n, Inc. v. QBE Ins. Corp., No. 3:07 CV 16, 2010
WL 2609367, at *2 (M.D. Fla. June 30, 2010).
“Punitive damage amendments are different than traditional
amendments in that section 768.72 has created a substantive legal right not
to be subject to a punitive damage claim until the trial court rules that there
is a reasonable evidentiary basis for punitive damages.” Holmes v.
Bridgestone/Firestone, Inc., 891 So. 2d 1188, 1191 (Fla. 4th DCA 2005)
(citation omitted). “[T]he standard that applies to determine whether a
reasonable basis has been shown to plead a claim for punitive damages
should be similar to the standard that is applied to determine whether a
complaint states a cause of action.” Est. of Despain, 900 So. 2d at 644–45.
“Within the framework of this standard, we will view the record evidence and
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the proffer in the light most favorable to [complainant] and accept it as true.”
Id.
Finally, section 768.72(2) sets forth the burden of proof at trial and
provides that a defendant may be held liable for punitive damages “only if
the trier of fact, based on clear and convincing evidence, finds that the
defendant was personally guilty of intentional misconduct or gross
negligence.” § 768.72(2), Fla. Stat. (2022).
Thus, it is not whether the wrongful business practice has already been
proven, but whether the plaintiff made a sufficient showing by evidence in
the record or proffer to establish a reasonable basis for it to ultimately be
found that the defendant engaged in the wrongful conduct as a business
practice.
In the instant case, the trial court relied on Howell-Demarest v. State
Farm Mutual Automobile Insurance Co., 673 So. 2d 526 (Fla. 4th DCA 1996),
in determining that Appellant’s evidence of her own claim and three similar
claims was insufficient to establish a general business practice.
In Howell-Demarest, as evidence of a general business practice, the
insured cited three other reported decisions in which State Farm refused to
allocate benefits upon request by the insured. The court addressed the
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evidence required to show frequency of conduct to indicate a general
business practice as follows:
If in fact State Farm has a “general business
practice” of not allocating, i.e., not paying out
benefits as they are clearly required to do under the
law, that, in our opinion, would be the type of
conduct for which the insured could recover punitive
damages.
The insured has yet to establish in the record that
State Farm has engaged in this practice more often
than in the present case and the cited cases. To
survive a motion for directed verdict, the insured
would have to demonstrate that State Farm
engaged in this practice far more frequently than
that. But we are reviewing a summary judgment,
and State Farm has not met its burden of
establishing the non-existence of a genuine issue of
material fact.
Id. at 529. Notably, the court held that evidence of more than three other
violations were required to survive a motion for a directed verdict—not a
motion to allow a punitive damages amendment in the first instance, as here.
This Court finds that the Howell-Demarest’s “three is not enough” standard
does not apply on a motion for leave to amend to assert a claim for punitive
damages. 1
1
As this case is before us concerning a motion for leave to add a claim
for punitive damages, we do not reach the issue addressed by the Fourth
District in Howell-Demarest as to what is necessary to survive a motion for
directed verdict.
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There is no magic number for other evidence required to show
frequency of a general business practice in order to assert a claim for
punitive damages—at a minimum it is the plaintiff’s own claim and at least
one more. What is required 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. (2022); Fla. R. Civ. P.
1.190(1)(f).
Below, the trial court erred by applying the Howell-Demarest standard
for evidence needed to prevail on a directed verdict to the evidence needed
to support Cook’s motion for leave to amend to assert a claim for punitive
damages.
Appellant’s actual evidence and proffered evidence reasonably
demonstrate an indication that the Insurance Company misrepresented
coverage and failed to properly investigate claims as a general practice, in
reckless disregard for the rights of its insureds.
Further, the record evidence was sufficient to show that the Insurance
Company was aware of, participated in, and ratified the conduct initiated in
its initial determination letter to Appellant throughout the pendency of the
underlying litigation. When viewed in a light most favorable to Appellant, and
in accordance with the standard that determines the level of misconduct
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warranting an award of punitive damages, a reasonable basis can be formed
to allow Appellant to plead a claim for punitive damages.
II.
The asserted basis for Appellant’s claim for punitive damages under
the statute was “intentional misconduct”.
“Intentional misconduct” means that the defendant
had actual knowledge of the wrongfulness of the
conduct and the high probability that injury or
damage to the claimant would result and, despite that
knowledge, intentionally pursued that course of
conduct, resulting in injury or damage.
§ 768.72(2)(a), Fla. Stat. (2022). Under section 768.72(2)(a), if there are
reasonable inferences and sufficient circumstances, then the issue of intent
typically becomes a question of fact for the jury, not the trial court.
Appellant claims that the trial court erred in denying her motion for
leave to amend by finding that the Insurance Company’s misrepresentation
of her policy was a mistake, and not intentional.
The Insurance Company claims its conduct was a mistake, as it had
no intent to deliberately misstate or omit any applicable policy language in
its determination letter, but simply mistakenly copied a provision from
another section of Appellant’s policy. 2 Further, the Insurance Company
2
Although the Insurance Company declares that all policy provisions
in its determination letter are in Appellant’s policy and it did not remove
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argues that the trial court did not make a finding of “no intent,” but merely
observed that the evidence showed there was a mistake and not a
misrepresentation.
The evidence and proffer submitted by Appellant consisted of:
• copies of the Insurance Company’s determination letter denying
coverage, with the faulty language purported to have been copied
from Appellant’s policy;
• her own policy;
• the Insurance Company’s answer and affirmative defenses in the
underlying lawsuit with the faulty language purported to have been
copied from Appellant’s policy;
• two civil remedy notices of insurer violations filed by Appellant;
• evidence of three other similar claims;
• the jury verdict in the underlying lawsuit; and
• an excerpt of the Insurance Company’s closing argument in the
underlying trial in which it claimed it had made a mistake in copying
the wrong language from a different section of Appellant’s policy,
but that nevertheless there was no coverage for Appellant under the
policy and the “typographical error” in the letter did not change that.
language from the policy provision, our review of the record before us shows
that the language provided by the Insurance Company to the Appellant, to
the court below, and to this Court is not found exactly as stated by the
Insurance Company anywhere in Appellant’s policy.
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The trial court found that the evidence proffered by Appellant showed
only that there was a mistake in the Insurance Company’s denial letter, as
opposed to a misrepresentation.
We conclude that there were reasonable inferences and sufficient
circumstances submitted to plead intentional misconduct. The trial court was
required to determine whether Appellant offered reasonable evidence of a
misrepresentation, not whether the mistake was intentional. Within that
framework, the trial court was required to view the record evidence and the
proffer in the light most favorable to Appellant and accept it as true. The trial
court erroneously made a factual determination at the pleading stage.
III.
The trial court’s order is reversed, and this case is remanded for further
proceedings.
REVERSED and REMANDED.
SOUD and PRATT, JJ., concur
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