Implicit Incorporation of Statutory Interest Provision Does Not Override Florida’s Private-Action Bar

Introduction

In James Willie Williams et al. v. Universal Property & Casualty Insurance Co. (consolidated with Riley v. Heritage Property & Casualty Insurance Co.), the Eleventh Circuit addressed whether homeowners can bring breach-of-contract claims against their insurers for unpaid interest on delayed claim payments by “implicitly” importing Florida Statute § 627.70131(5)(a) into their policies. The plaintiffs sought interest after Hurricane Irma damages, arguing their standard loss-payment clauses incorporated the statute’s interest provision even though no policy term expressly required interest. Both district courts dismissed for failure to state a claim, concluding that even if the statute were incorporated, its express bar on private actions “based solely” on non-compliance prevents any standalone suit. On appeal, the Eleventh Circuit affirmed, clarifying that an insurer’s statutory obligation to pay interest does not create a private right of action by implication where the statute itself forecloses such suits.

Summary of the Judgment

The Eleventh Circuit, per curiam, affirmed the dismissal of plaintiffs’ breach-of-contract actions. It held that:

• Neither the Heritage nor the Universal insurance policies contained an express clause obligating interest on late payments.
• Plaintiffs’ attempt to “implicitly” incorporate Fla. Stat. § 627.70131(5)(a)—which mandates interest but bars private suits based solely on its violation—cannot sustain a contractual claim.
• Florida case law interpreting the statute uniformly rejects private causes of action based solely on the statutory interest mandate.
• A true breach-of-contract claim may proceed only where the policy contains an express promise to pay interest; mere statutory incorporation is insufficient when the statute itself prohibits standalone suits.

Accordingly, the Eleventh Circuit affirmed both dismissals with prejudice.

Analysis

Precedents Cited

• State Farm Fla. Ins. Co. v. Silber, 72 So. 3d 286 (Fla. 4th DCA 2011): Held that Fla. Stat. § 627.70131(5)(a) “closes the door” on insureds bringing private actions solely for interest owed under the statute.
• Taylor v. State Farm Fla. Ins. Co., 388 So. 3d 307 (Fla. 5th DCA 2024): Confirmed that a policy containing an express promise to pay interest “in accordance with § 627.70131(5)” creates a valid independent breach-of-contract claim, but distinguished claims based only on implied statutory incorporation.
• Sandra Safont v. State Farm Fla. Ins. Co., No. 23-12202, 2025 WL 212286 (11th Cir. Jan. 16, 2025): Noted that an “explicit” policy incorporation of § 627.70131(5) gives rise to a statutory breach claim, not a contractual one, reinforcing that statutory bar provisions carry forward.
• Foundation Health v. Westside EKG Assocs., 944 So. 2d 188 (Fla. 2006): Addressed implied incorporation of HMO Act prompt-pay provisions into HMO contracts, but distinguished by absence of any statutory bar on private suits under that Act.

Legal Reasoning

1. Contractual Text vs. Statutory Mandate
The policies at issue contained standard “loss-payment” clauses requiring insurers to pay or deny claims within 90 days but included no express interest provision. Plaintiffs argued that Fla. Stat. § 627.70131(5)(a)—which mandates interest at Fla. Stat. § 55.03 rates on payments made over the statutory deadlines—should be deemed part of every policy under general rules invalidating policy provisions that waive mandatory statutory rights.

2. Statutory Bar on Private Actions
Subsection 5(a) explicitly states that “failure to comply with this subsection does not form the sole basis for a private cause of action.” Florida appellate courts (e.g., Silber) have construed this language as foreclosing any standalone private suit for unpaid interest under the statute unless an independent contractual basis exists.

3. Distinction Between Express and Implied Incorporation
The court emphasized Taylor’s teaching: when a policy expressly promises interest “in accordance with” § 627.70131(5), that promise is a separate, independent contractual obligation that gives rise to a breach-of-contract action outside the statute’s bar. By contrast, an attempt to “bootstrap” the statute into a policy without express language simply re-packages a statutory claim barred by the statute itself.

4. Rejection of Implied Incorporation Theory
Accepting plaintiffs’ theory would render Subsection 5(a)’s private-action bar meaningless: insureds could always recast a statutory interest claim as a breach of an “implied” policy term. The court refused to interpret the statute in a way that nullifies its own enforcement mechanism.

Impact

This decision clarifies the boundary between statutory and contractual obligations in Florida insurance law:

• Insurers will not face breach-of-contract suits for unpaid interest unless their policies expressly provide for interest payments.
• Policy drafters who wish to preserve a private right to interest must include a clear, stand-alone interest clause explicitly tied to § 627.70131(5)(a).
• Litigants must distinguish between statutory remedies (which may be barred) and genuine contractual promises (which may support private suits).
• Future appellate and trial courts will rely on this ruling to reject implied-incorporation theories that circumvent express statutory limitations.

Complex Concepts Simplified

• Implicit vs. Express Incorporation: “Express incorporation” means the policy’s text specifically says “we’ll pay interest under § 627.70131(5).” “Implicit incorporation” would mean reading that interest requirement into every policy even though it isn’t written down. The court refused to do the latter.
• Private-Action Bar: A statutory “bar on private actions” is a rule that, even if a statute says you must do something (like pay interest), you cannot sue in court just because the statute says so—unless there is some other reason (like a contract clause) to bring the suit.
• Statutory vs. Contractual Claim: A “statutory claim” is based solely on a law or regulation. A “contractual claim” is based on duties set out in an agreement. Courts treat them differently—especially when statutes expressly limit lawsuits.

Conclusion

The Eleventh Circuit’s ruling in Williams v. Universal (and Riley v. Heritage) reinforces that Florida’s late-payment interest statute cannot be the sole foundation for a breach-of-contract suit unless the contract itself unmistakably promises interest. By upholding the dismissal of implied-incorporation claims, the decision preserves the statute’s express private-action bar and delineates a clear path for insureds and insurers: to litigate interest disputes, one must embed an explicit interest obligation in the policy language. This precedent will shape how policies are drafted and litigated in Florida, ensuring that express terms govern private enforcement of statutory remedies.