A Florida appeals court has put another nail in the idea that the state’s limits on attorney fees can be applied retroactively to policies issued before the landmark legislative changes were enacted in 2022 and 2023, despite arguments to the contrary by one of Florida’s larger property insurers.

In a case titled Blumberg vs. Security First Insurance Co., Florida’s 5th District Court of Appeals last week found that “Senate Bill 2-A (2022) includes no language near the amendments that implies retroactivity …”

Citing two major appellate court decisions from 2010 and 2024, the judges overturned a Volusia County court ruling and remanded the case for determination of the plaintiff’s attorney fees.

“Applying the Menendez framework here, as Smith requires, we hold that the amendments cannot apply retroactively to Blumberg’s property insurance policy,” 5th District Judge Jordan Pratt wrote in the Aug. 28 opinion. “Neither the first nor the second prong of the retroactivity analysis supports retroactive application.”

The case began in 2022 when Denise Blumberg, the teacher of the year at Mainland High School in Daytona Beach in 2024, filed a claim for hail and wind damage to her home. Ormond Beach-based Security First, with some 140,500 policies in force, declined to pay the full amount amount of the claim. Blumberg sued for breach of contract.

The two sides settled in 2023 but the question of attorney’s fees was left open, the appellate court explained. Blumberg’s attorney later filed a motion for fees, citing the version of the state law that was in effect when she purchased her homeowner’s insurance policy in early 2022.

The now-infamous “one-way attorney fee” provision once allowed under Florida statutes and court rulings has been called the biggest reason for runaway claims litigation in Florida in the 2010s and early 2020s. It forced insurers to pay a policyholder’s attorney’s fees, often with large fee multipliers, even if the insured won in court or settled for only slightly more than the insurer had initially offered. The one-way provision was revised by lawmakers in late 2022 with the landmark Senate Bill 2A.

“During the time between Blumberg’s covered loss and the initiation of her action against Security First, the Florida Legislature enacted multiple amendments to and repeals of sections 627.428 and 627.70152, ultimately eliminating an insured’s right to attorney’s fees in litigation over the denial of benefits under a property insurance policy,” the court explained in the opinion.

After the 2022 repeal was enacted, questions arose about whether the law could be applied retroactively – if the determining factor was the date the policy was issued or the date a claims dispute lawsuit was filed. The Florida Supreme Court in 2010 had provided some guidance with the Menendez vs. Progressive Express Insurance decision, concerning no-fault auto insurance and statutory pre-suit notification requirements. The high court created a two-pronged test: whether the Legislature intended the relevant statute to be applied retroactively; and if such application would violate constitutional principles or a party’s substantive rights.

In Menendez, the Florida Supreme Court ultimately decided that the provisions of the law could not be applied retroactively, in part because they implicated the substantive right to attorney’s fees by delaying the ability to recover them, the court explained.

But applying the Menendez doctrine still led to differing opinions by Florida appellate courts. The 4th District Court of Appeals in 2023 found that lawmakers had intended the pre-suit notice law to be retroactively applied. That same year, the 6th District court found the opposite to be true.

In the Blumberg motion on attorney fees, Security First attorneys argued that the Menendez precedent should apply only to personal injury protection insurance, not to homeowners’ insurance litigation. The insurer also contended that denying attorney’s fees in this case was not a retroactive application of the amendments because such application did not add new consequences to prior conduct.

But the 5^th DCA noted that appeals courts had essentially rejected those arguments in previous rulings.

Because the 2022 attorney-fee reform law did not specify that it is retroactive, and because attorney fees are considered a substantive right, the appellate judges overruled the Volusia County judge in the Blumberg suit.

“Even if the statutory changes demonstrated an intent for retroactive application, precedent requires that we hold them inapplicable to Blumberg’s case under Menendez‘s second prong due to their impact on a substantive right,” the 5th DCA opinion reads.

Security First “cannot escape the conclusion that the right to attorney’s fees was incorporated into the policy that issued before such a right was repealed by the Legislature,” Judge Pratt wrote in the opinion.

The 5th DCA remanded the Blumberg case to the Volusia County court to determine the amount of attorney fees for her lawyers.

Security First was represented by attorneys Ashley Jay Arends and Joseph Jacquot. Blumberg was represented in the appeal by well-known Florida plaintiff’s lawyer Chad Barr, who prevailed early this year in a similar case concerning retroactivity. In Vo vs. Scottsdale Insurance, Florida’s 1st District Court of Appeals found that the bad-faith claims limitation, which was also part of the 2022’s landmark legislation, could not be applied to cases begun before the law took effect. Read more here.

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