A Florida appeals court has reinstated a key coverage defense for Universal Property & Casualty Insurance Company, reversing a nearly $60,000 judgment in favor of homeowners and granting the insurer a new trial.
In a ruling issued Tuesday, the Fourth District Court of Appeal found that the trial judge erred in barring Universal from asserting that its policyholders, Thomas J. and Deborah Jo Yager, failed to provide "prompt notice" of a roof leak. The court ruled that Universal was improperly denied the chance to present the defense to a jury, despite language in the policy conditioning coverage on timely notification of loss.
The decision underscores the continued legal force of so-called “prompt notice” provisions - and highlights how insurers can preserve those defenses even after partial payments are made.
The case arose from a leak at the Yagers’ home during the policy period from August 2019 to August 2020. Universal contended the damage occurred in May 2020, but the Yagers did not report the incident until August, and they did so through a public adjuster. The insurer issued a payment of just over $2,000 for interior water damage but denied coverage for roof repairs.
The Yagers sued for breach of contract in Broward County, arguing they had fulfilled all policy requirements or that Universal had waived any conditions. The trial court sided with them on summary judgment, ruling that Universal had relinquished its right to enforce the notice clause by investigating the claim and making a partial payment. The jury later awarded the Yagers an additional $54,250, and the court entered judgment for approximately $60,000 including interest.
At the heart of the case was the insurer’s duty clause, which stated:
“Give prompt notice to us or your insurance agent; We have no duty to provide coverage under this Policy if the failure to comply with the following duties is prejudicial to us.”
Universal argued that the Yagers’ delay - and the use of a third-party adjuster - prejudiced its ability to investigate the damage as it existed at the time of the loss.
On appeal, Universal also challenged the homeowners’ procedural handling of the waiver issue, arguing they failed to properly plead it. The Fourth District agreed, holding that waiver must be explicitly raised in response to an insurer’s affirmative defenses. The Yagers, it found, did not do so until five months after Universal’s answer, and even then, failed to specifically address the prompt notice defense.
Importantly, the appellate panel rejected the trial court’s conclusion that Universal’s partial payment constituted a waiver of its right to enforce policy conditions.
Citing prior decisions - including Rodrigo v. State Farm Florida Insurance Co. and Universal Property & Casualty Insurance Co. v. Horne - the court reiterated that partial payments do not preclude an insurer from later asserting noncompliance with post-loss duties, provided the defense is timely and properly raised.
Because the trial court’s ruling effectively precluded the jury from considering Universal’s argument on prompt notice, the appellate court reversed the judgment and remanded the case for a new trial.
The court emphasized it was not passing judgment on whether Universal’s defense would ultimately succeed - only that the insurer was entitled to present it.
This decision doesn’t settle the coverage dispute, but it reaffirms that insurers must be given the opportunity to raise valid policy-based defenses when those defenses have been properly preserved.
The case, Universal Property & Casualty Insurance Company v. Thomas J. Yager and Deborah Jo Yager, No. 4D2023-2310, was originally tried before Judge Daniel A. Casey in the Seventeenth Judicial Circuit.
On appeal, Universal was represented by Kara Rockenbach Link and David A. Noel of Link & Rockenbach, P.A. in West Palm Beach. The Yagers were represented by Melissa A. Giasi of Giasi Law, P.A. in Tampa.
