Menendez v. Progressive Express Insurance Co.
35 Fla. L. Weekly Supp. 222, 35 So.3d 873, 2010 Fla. LEXIS 581 (2010)
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Rule of Law:
A statutory amendment that imposes new, substantive obligations or burdens on a party to an existing contract, such as a presuit notice requirement that affects the right to attorney's fees and delays the right to sue, cannot be applied retroactively to insurance policies issued before the statute's effective date.
Facts:
- Cathy Menendez was covered by a Progressive Express Insurance Company (Progressive) personal injury protection (PIP) policy with effective dates of April 1, 2001, to October 1, 2001.
- On June 14, 2001, Menendez was injured in an automobile accident.
- Following the accident, the Florida Legislature enacted section 627.736(11), a statute that created a new requirement for an insured to provide the insurer with a written notice of intent to initiate litigation before filing a suit for overdue benefits.
- Although Progressive paid some of Menendez's medical bills, a dispute arose over other PIP benefits, including lost income.
- In December 2001, Menendez's attorney began pursuing a claim for the remaining PIP benefits from Progressive, but Progressive did not pay the full amount claimed.
Procedural Posture:
- Cathy Menendez sued Progressive Express Insurance Company in the trial court for overdue personal injury protection (PIP) benefits.
- The trial court granted partial summary judgment in favor of Menendez, ruling that the new statutory presuit notice provision did not apply to her claim, and entered a stipulated final judgment in her favor.
- Progressive, as appellant, appealed the judgment to the Third District Court of Appeal.
- The Third District Court of Appeal reversed the trial court's judgment, holding that the statutory presuit notice requirement was procedural and could be applied retroactively to Menendez's claim.
- Menendez sought review from the Supreme Court of Florida, which accepted the case based on an express and direct conflict with decisions from other Florida courts.
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Issue:
Does a statutory amendment requiring an insured to provide a presuit notice of intent to initiate litigation apply retroactively to an insurance policy issued before the amendment's effective date?
Opinions:
Majority - Pariente, J.
No. The statutory presuit notice provision constitutes a substantive change to the law and therefore cannot be retroactively applied to insurance policies issued before its effective date. The court applies a two-pronged test for retroactivity: first, it determines legislative intent, and second, it assesses whether retroactive application would violate constitutional principles by impairing a vested right, creating a new obligation, or imposing a new penalty. Here, while the legislature may have intended retroactive application, the amendment is substantive, not merely procedural. The new law imposes a penalty, implicates the substantive right to attorneys’ fees by creating a 'safe harbor' for insurers to pay late and avoid fees, grants insurers additional time to pay benefits, and delays the insured's right to file a lawsuit. These changes substantively alter the insurer's obligations and the insured's rights under the contract that was in effect when it was executed.
Analysis:
This decision reinforces the critical distinction between substantive and procedural laws for the purpose of retroactivity analysis under Florida law. It establishes that statutory requirements which function as a condition precedent to litigation and affect material rights, such as the recovery of attorney's fees, are substantive in nature. The ruling protects the expectations of parties to existing contracts, preventing the legislature from altering vested contractual rights through subsequent legislation. This precedent serves as a clear guide for lower courts to scrutinize new statutes that impose additional litigation hurdles, ensuring they are not applied to contracts formed before their enactment.
