No Waiver of Unpled Prompt‑Notice Defense at Summary Judgment Absent Prejudice; Late Notice Presumed Prejudicial Where Post‑Loss Repairs Obscure Evidence

Commentary on Lynda Pierce v. National Specialty Insurance Company, No. 24‑12109 (11th Cir. Apr. 2, 2025) (per curiam) (unpublished)

Introduction

This Eleventh Circuit decision affirms summary judgment for National Specialty Insurance Company (NSIC) in a first‑party property insurance dispute brought by Lynda and David Pierce following a water event during a kitchen renovation. The case presents three recurring issues in Florida property insurance litigation:

• Whether an insurer waives a “prompt notice” defense by failing to plead it as an affirmative defense or to include it in an initial denial letter;
• What constitutes “prompt notice” under a Florida homeowner’s policy when an insured experiences an obvious, sudden water event but delays reporting while undertaking substantial repairs; and
• How the presumption of prejudice to the insurer operates when notice is late and the insured’s post‑loss actions have altered or disposed of material evidence.

The Pierces argued that NSIC waived its prompt‑notice defense (1) by failing to timely amend its pleadings after a magistrate judge denied leave under Rule 16(b)(4) and (2) by omitting the defense from its denial letter. They further argued substantial compliance with the policy and that NSIC suffered no prejudice. The court rejected these arguments, holding that NSIC could assert the unpled defense at summary judgment without prejudice to the insureds, that the denial letter did not waive the defense, that the seven‑month delay in reporting was not “prompt” on undisputed facts, and that the presumption of prejudice was not rebutted given intervening repairs and altered conditions.

Summary of the Opinion

The panel (Rosenbaum, Abudu, and Black, JJ.) affirmed the district court’s grant of summary judgment to NSIC on the policy’s “Duties After Loss” condition requiring prompt notice. The key holdings are:

• Rule 8(c) Waiver: Although a magistrate judge denied NSIC’s motion to amend its affirmative defenses under Rule 16(b)(4), the district court did not err in considering the prompt‑notice defense at summary judgment. Under Eleventh Circuit precedent, failure to plead an affirmative defense is not dispositive where the plaintiff had notice of the defense and suffered no prejudice.
• Denial Letter Waiver: NSIC did not waive the prompt‑notice defense by failing to cite it in its initial denial letter because the insureds themselves identified January 24, 2022, as the date of loss in their sworn proof of loss and claim communications. On those facts, NSIC could not reasonably have asserted late notice based on a June 2021 loss date the insureds were not then claiming.
• Prompt Notice: It was undisputed that the date of loss was June 19, 2021, when a pipe burst during renovation, and that the insureds reported the claim on January 24, 2022. Given the obviousness of the water event and ensuing cupping and dampness of the floors, no reasonable jury could find notice was “as soon as practicable.”
• Prejudice: Under Florida law, late notice creates a rebuttable presumption of prejudice to the insurer. The insureds did not rebut that presumption because extensive repairs and renovations—including removal, capping, and relocation of plumbing and kitchen components—occurred before NSIC could investigate, depriving NSIC of material evidence.

Factual and Procedural Background in Brief

The Pierces purchased their home in 2019 and began kitchen renovations in June 2021. On June 19, 2021, while disconnecting the kitchen sink, a brittle PVC line “exploded,” flooding adjacent rooms. The insureds shut off water, dried the area with towels and fans for weeks, and proceeded with demolition and installation of new cabinets in late July/early August. A flooring contractor (Heffernan) assessed moisture levels and later refinished the floors in January 2022. When cupping reappeared, Heffernan discovered subfloor moisture. The Pierces notified NSIC on January 24, 2022; NSIC’s adjuster found no moisture in the surface flooring but moisture at the subfloor on slab. Leak detection found no active leaks. NSIC denied coverage based on a foundation moisture exclusion.

After a public adjuster opined the moisture was from the June 2021 burst, the Pierces submitted a sworn proof of loss listing January 24, 2022, as the loss date. They sued on June 27, 2022, pleading a January 26, 2022 loss date. NSIC’s initial answer did not plead a prompt‑notice defense. A magistrate judge later denied NSIC’s motion to amend after the scheduling deadline. Nonetheless, NSIC moved for summary judgment on late notice, and the district court granted it. The Eleventh Circuit affirmed.

Analysis

Precedents Cited and Their Role

• Rule 8(c) and Waiver
  • Sweet v. Secretary, Dep’t of Corrections; Grant v. Preferred Research, Inc.; Hassan v. U.S. Postal Service; Blonder‑Tongue Laboratories, Inc. v. University of Illinois Foundation: These decisions recognize a liberal approach to Rule 8(c) waiver—if the plaintiff has notice of the affirmative defense by means other than the pleadings and suffers no prejudice, a defendant’s failure to plead is not fatal. The panel applied this line to uphold the district court’s consideration of the prompt‑notice defense at summary judgment despite the earlier Rule 16(b)(4) denial of leave to amend.
• Florida Prompt‑Notice Framework
  • Ideal Mutual Insurance Co. v. Waldrep: Establishes that failure to give prompt notice can be a legal basis to deny recovery and articulates the “reasonable and prudent person” trigger for notice. The panel used Waldrep to assess when the duty to notify arose: at the time of the obvious water event and immediate evidence of dampness/cupping.
  • LoBello v. State Farm Florida Insurance Co.: Clarifies that “prompt” means “as soon as practicable,” usually a fact question but resolvable as a matter of law when undisputed facts show untimeliness. The panel relied on LoBello to affirm summary judgment based on undisputed delay.
  • Bankers Insurance Co. v. Macias: Establishes that late notice creates a rebuttable presumption of prejudice to the insurer; the insured bears the burden to rebut. The panel applied Macias to hold the Pierces failed to rebut the presumption given the evidence‑altering repairs.
  • Hurricane Wilma line (1500 Coral Towers; Hope; Soronson; Kramer): These cases demonstrate Florida courts’ strict application of prompt notice, especially after known catastrophic events. The panel used them as analogues to show that years‑long (or in this case, months‑long) delays after a known event are not “prompt.”
• Florida Claims Administration Statute
  • Fla. Stat. § 627.426(2)(a): The court quoted the statute to address the insureds’ waiver argument premised on the denial letter. The panel did not rest its decision on whether the statute applies; instead, it held on the facts that NSIC could not reasonably assert a late‑notice defense in its denial letter when the insureds themselves claimed a January 2022 loss date.
• Standard of Review
  • Jefferson v. Sewon America, Inc.: Recites the de novo standard for summary judgment, viewing the evidence in the non‑movant’s favor. The panel applied that standard to undisputed facts.

Legal Reasoning

The opinion proceeds in three logical steps: waiver, timeliness, and prejudice.

1. Waiver by Pleading Omission (Rule 16(b)(4) vs. Rule 8(c))

   The magistrate judge denied NSIC’s motion to amend its answer to add a prompt‑notice defense after the scheduling order deadline (no “good cause”). But the district court allowed NSIC to raise the defense at summary judgment, and the panel affirmed. Under Eleventh Circuit Rule 8(c) jurisprudence (Sweet, Grant, Hassan), the touchstone is prejudice and notice—not mere pleading technicalities. Because the Pierces had notice of and an opportunity to respond to the late‑notice defense before trial, they suffered no prejudice from the omission, and the defense was properly considered. The panel’s reasoning harmonizes federal case‑management rules (Rule 16) with the underlying purpose of Rule 8(c): notice and fairness in litigation, not rigid forfeiture.

2. Waiver by Denial Letter

   The insureds argued NSIC waived the prompt‑notice defense by not asserting it in its initial denial letter, invoking the policy and Florida’s claims administration statute. The panel rejected that position. The insureds consistently identified the loss date as January 24/26, 2022 in their proof of loss and complaint; thus, NSIC could not reasonably be faulted for not invoking late notice during claim administration where, on the insureds’ own timeline, notice appeared immediate. This fact‑specific holding avoids converting claim‑handling letters into traps where insureds can later reverse their loss date and retroactively claim waiver.

3. Timeliness of Notice

   The policy imposed a condition precedent: “Give prompt notice to us or our agent,” with coverage barred if noncompliance prejudiced the insurer. The court applied the Florida “reasonable and prudent person” standard. The June 19, 2021 pipe burst was a sudden, obvious occurrence; the insureds immediately observed flooding and later saw cupping and persistent dampness. On these undisputed facts, waiting until January 24, 2022—over seven months—was not “as soon as practicable.” The court further emphasized that an insured’s decision to undertake independent repairs does not excuse compliance with notice duties (Waldrep).

4. Presumption of Prejudice and Failure to Rebut

   Under Macias, late notice presumes prejudice to the insurer; the insured must rebut by showing the insurer nonetheless had a meaningful opportunity to investigate and was not harmed. Here, the insureds performed demolition, removed and relocated the sink, capped the burst line, installed new cabinetry, and refinished floors—all before notifying NSIC. Leak detection found no active leak by the time the claim was presented, and NSIC’s adjuster observed moisture confined to subfloor on slab with no surface moisture. The court concluded these intervening changes “disposed of the evidence” NSIC needed and deprived it of an adequate investigation window. The insureds’ attempt to negate prejudice by pointing to NSIC’s alternative coverage denial failed: an insurer may both deny on coverage grounds and be prejudiced by late notice; asserting one does not waive the other.

Impact and Practical Implications

• Federal Pleading and Summary Judgment Practice
  • Even after a Rule 16(b)(4) denial of leave to amend, district courts within the Eleventh Circuit may entertain an unpled affirmative defense at summary judgment if the plaintiff had notice and is not prejudiced. Litigants should brief prejudice and actual notice, not only scheduling‑order compliance, when addressing late‑raised defenses.
• Claims Handling and Denial Letters
  • Omission of a late‑notice ground from a denial letter will not necessarily waive the defense, particularly when the insured’s own claim submissions (e.g., sworn proof of loss) identify a recent loss date. Insurers should still strive to reserve rights broadly and contemporaneously, but this decision underscores that waiver is fact‑dependent and turns on notice and fairness.
• Insureds’ Post‑Loss Conduct
  • Undertaking substantial repairs before reporting a claim can cement the Macias presumption of prejudice by eliminating key evidence (e.g., the failed component, original configuration, moisture mapping). Insureds should notify promptly—even if they intend to proceed with renovations—so the insurer can inspect pre‑repair conditions.
• Florida Prompt‑Notice Jurisprudence
  • Following LoBello and the Hurricane Wilma line, Florida courts continue to treat lengthy delays after known events as untimely as a matter of law. This case applies that principle to a non‑hurricane, in‑home water loss with immediate observable effects.
• Persuasive, Not Binding
  • The opinion is unpublished and therefore not binding precedent, but it is persuasive, particularly on the interplay between federal procedural rules (Rules 16 and 8(c)) and Florida’s substantive late‑notice framework.

Complex Concepts Simplified

• Prompt Notice

  When a policy says you must give “prompt notice,” it means you must tell the insurer as soon as it’s reasonably practical after an event that would lead a reasonable person to think a claim might arise. Sudden, obvious losses (like a burst pipe and flooding) usually trigger an immediate duty to report.

• Condition Precedent

  A condition precedent is a requirement you must meet before the insurer has to provide coverage. Here, giving prompt notice is a condition precedent; failure to do so can bar coverage if it prejudices the insurer.

• Presumption of Prejudice

  If notice is late, Florida law presumes the insurer was harmed because it missed the chance to promptly investigate. The insured can overcome that presumption by showing the delay didn’t actually hinder the insurer (for example, by showing the scene and evidence remained unchanged and available for a thorough investigation). Repairs and alterations before notice typically make rebuttal harder.

• Waiver of Affirmative Defenses

  Normally, defendants must list affirmative defenses in their answer. But in the Eleventh Circuit, if the plaintiff is otherwise aware of the defense and isn’t prejudiced, a court may still consider it—especially at summary judgment—even if it wasn’t pled earlier.

• Reservation of Rights and Denial Letters

  A reservation of rights letter tells the insured that the insurer is investigating or defending while keeping certain defenses available. A denial letter explains reasons for denying coverage. Omission of a defense from such letters doesn’t always waive it; context matters, including what the insured told the insurer about when and how the loss occurred.

• Substantial Compliance

  Insureds sometimes argue they “substantially complied” with policy duties even if they didn’t follow them perfectly. But where notice is delayed for months after a known loss and evidence is altered by repairs, courts often find substantial compliance lacking as a matter of law.

Key Takeaways

• Unpled affirmative defenses can be considered at summary judgment if the plaintiff had notice and cannot show prejudice; a prior Rule 16(b)(4) denial of amendment does not bar consideration under Rule 8(c)’s liberal notice‑and‑fairness approach.
• An insurer’s failure to cite late notice in a denial letter does not establish waiver when the insured’s own submissions identified a recent loss date, obscuring any late‑notice issue.
• Seven months’ delay in reporting an obvious, sudden water event is untimely as a matter of law under Florida precedent, particularly where the insured observed continuing effects (dampness, cupping).
• Late notice triggers a presumption of prejudice that insureds must rebut. Post‑loss repairs and renovations that alter or dispose of critical evidence make rebuttal difficult and often fatal.
• Insureds should notify the insurer promptly after any significant loss event—even if they plan to repair or renovate—so the insurer can inspect before conditions change.

Conclusion

The Eleventh Circuit’s unpublished decision in Pierce v. NSIC reinforces two pillars of Florida insurance litigation: strict enforcement of prompt‑notice duties following a known loss and the presumption of prejudice when notice is late. Procedurally, it underscores the Eleventh Circuit’s pragmatic approach to affirmative defenses: courts prioritize actual notice and lack of prejudice over rigid pleading formalities, allowing an unpled defense to be raised at summary judgment when fairness permits.

Substantively, the opinion confirms that where insureds undertake significant repairs and renovations before notifying their insurer, they risk both a finding of untimely notice and an unrebutted presumption of prejudice due to the loss or alteration of evidence. For practitioners, the case offers clear guidance on how federal procedural rules interface with Florida’s substantive late‑notice framework and provides practical lessons for both claims handling and litigation strategy in first‑party property disputes.