Limitation on Implied Statutory Interest Claims in Insurance Contracts Under Fla. Stat. § 627.70131

Introduction

Joan Riley, Linda Scott, Willie James Williams, Willie Mae Williams, Cristobalina Fernandez, and Neritza Cain (together, “Appellants”) sustained hurricane damage to their Florida homes in 2017 and pursued insurance-appraisal awards under residential property policies issued by Heritage Property & Casualty Insurance Company and Universal Property & Casualty Insurance Company (together, “Appellees”). After appraisal panels set compensation amounts, Appellees paid those awards but did not include interest on late payments. The Appellants sued for breach of contract, contending their policies—by implication—incorporated the interest‐payment provision of Fla. Stat. § 627.70131(5)(a). The district courts dismissed both complaints with prejudice, holding (1) the policies contain no express interest term, and (2) the statute’s own private–action bar precludes any suit based solely on its interest‐payment requirement. On appeal, the Eleventh Circuit affirmed.

Summary of the Judgment

The Court of Appeals held that:

Neither policy contains an express contractual obligation to pay interest on untimely claim payments.
Appellants cannot bootstrap Fla. Stat. § 627.70131(5)(a) into their contracts by implication to create a breach‐of‐contract claim.
The statute explicitly provides that its “failure to comply … does not form the sole basis for a private cause of action.”
Florida precedent confirms that any claim predicated solely on non-compliance with the statute is barred, even if recast as contract claims.

The court therefore affirmed the district courts’ Rule 12(b)(6) dismissals.

Analysis

Precedents Cited

Fla. Stat. § 627.70131(5)(a) – Requires interest on claim payments made more than 90 days after notice and bars private actions based solely on its violation.
State Farm Fla. Ins. Co. v. Silber, 72 So. 3d 286 (Fla. 4th DCA 2011) – Holds that the statute’s bar closes the door on private actions unless an independent contractual obligation exists.
Taylor v. State Farm Fla. Ins. Co., 388 So. 3d 307 (Fla. 5th DCA 2024) – Recognizes that an express policy clause promising interest creates an independent contract claim not precluded by the statute’s private–action bar.
Foundation Health v. Westside EKG Assocs., 944 So. 2d 188 (Fla. 2006) – Implied statutory incorporation in HMO contracts; distinguished because the HMO Act does not bar private enforcement.
Sandra Safont v. State Farm Fla. Ins. Co., No. 23-10329, 2025 WL 212286 (11th Cir. Jan. 16, 2025) – Explains that an express contractual reference to § 627.70131 creates a statutory‐breach claim, not a true contractual breach.
Roberts v. Sea-Land Servs., Inc., 566 U.S. 93 (2012) and In re Shek, 947 F.3d 770 (11th Cir. 2020) – General canons against reading statutes to render provisions superfluous.

Legal Reasoning

The Eleventh Circuit applied de novo review to the Rule 12(b)(6) dismissals and statutory construction. It began by noting that a breach‐of‐contract claim requires a contractual term that has been broken. Neither Heritage’s nor Universal’s policies contained any provision obligating interest on late payments. Appellants sought to supply that missing term by invoking Fla. Stat. § 627.70131(5)(a), which imposes an interest‐payment requirement and states that “failure to comply with this subsection does not form the sole basis for a private cause of action.”

Binding Florida authority (Silber) confirms that any private suit must rest on a contract obligation independent of the statute itself. In Taylor, the policy’s express promise to pay interest “in accordance with § 627.70131(5)” created such an independent obligation. Here, by stark contrast, Appellants point to no express term—only an “implied” incorporation theory. That theory would nullify the statute’s private–action bar; every policy would implicitly carry the statute’s interest obligation but no private‐action bar, a result incompatible with elementary principles of statutory construction.

The court further distinguished Foundation Health v. Westside EKG, which involved a different statute (the HMO Act) lacking any private–action prohibition. Unlike that Act, § 627.70131(5)(a) expressly bars private suits for its own breach. All attempts to recast a pure statutory violation as a contract claim are therefore foreclosed.

Impact

This decision clarifies the interplay between Florida’s “prompt payment” statute and private lawsuits:

Insurers will not face breach‐of‐contract suits unless their policies contain an express promise to pay interest on late claim payments.
Policyholders must look either to an explicit contract term or to administrative remedies if the statute itself prohibits private suits.
Insurers wishing to limit interest liability should draft policies carefully; conversely, insurers wishing to pre-empt challenges may include express interest clauses, knowing that they create a true contractual obligation.
Legislators seeking to expand private enforcement of prompt‐pay obligations would need to amend § 627.70131 to permit suits directly on statutory grounds.

Complex Concepts Simplified

Fla. Stat. § 627.70131(5)(a): A Florida statute requiring insurers to pay interest on late claim payments but stating—unlike many statutes—that you cannot bring a private lawsuit based solely on its violation.
Private–Action Bar: A provision in the statute which declares that “failure to comply … does not form the sole basis for a private cause of action,” thus barring stand‐alone statutory suits unless another legal duty exists.
Express vs. Implied Contract Terms: An express term is explicitly written into the policy (e.g., “We will pay interest at 12% per annum on any late claim payment”). Implied incorporation tries to read a statutory requirement into every policy, even when the policy is silent.
Appraisal Process: A mechanism in many property‐insurance policies for determining the value of disputed losses. Once appraisers set an award, the insurer must pay according to the policy (and possibly the statute).

Conclusion

The Eleventh Circuit’s decision in Riley & Williams v. Heritage & Universal underscores that in Florida:

A breach‐of‐contract suit requires an explicit policy term providing for interest on late payments.
One cannot cure the absence of such a term by impliedly incorporating Fla. Stat. § 627.70131(5)(a) without also importing its prohibition on private claims.
Policyholders and insurers alike now have clear guidance on drafting, enforcing, and litigating prompt‐pay provisions.

By affirming the dismissal of the Appellants’ attempts to end‐run the statute’s private‐action bar, the court preserves the Legislature’s chosen enforcement framework and reinforces the principle that statutes shouldn’t be rendered hollow by creative pleading.