Florida Appeals Court Rules Attorney Fee Repeal Cannot Be Applied Retroactively

In August 2025, Florida’s Fifth District Court of Appeal (5th DCA) issued a ruling in Blumberg v. SFIC that could reshape the landscape of property insurance litigation in the state. The court held that the repeal of statutory attorney fees in property insurance cases cannot be applied retroactively. This ruling preserves policyholder rights under insurance contracts issued before the 2022 and 2023 legislative changes, offering critical protection to homeowners still navigating claims from recent storm seasons.

Why Attorney Fees Matter

For decades, Florida law gave policyholders an important safeguard through the “one-way attorney fee” statute. Under this rule, if an insured successfully proved in court that their carrier wrongfully denied or underpaid a claim, the insurer was required to pay the policyholder’s attorney fees.

This provision was not simply a financial benefit—it was a practical necessity. Most homeowners cannot afford to hire legal counsel to take on large insurance companies with vast legal resources. The one-way fee statute created balance by ensuring consumers could enforce their rights without risking bankruptcy over legal bills.

Without this safeguard, many families would face a difficult choice: accept an unfairly low settlement or attempt to fund costly litigation on their own.

Legislative Changes That Sparked the Debate

In recent years, lawmakers sought to address what they viewed as an excess of litigation contributing to Florida’s escalating insurance premiums:

• Senate Bill 2A (2022): Passed in a December special session, SB-2A removed the one-way fee provision in property insurance cases.
• House Bill 837 (2023): The following year, lawmakers went further by repealing Florida Statute § 627.428, which had guaranteed attorney fee recovery.

Supporters of these reforms argued they would reduce lawsuit volume and help stabilize Florida’s fragile property insurance market, where multiple carriers had gone insolvent. Critics, however, warned that eliminating fee recovery would tilt the playing field heavily in favor of insurers, leaving homeowners with limited recourse.

The Blumberg Case: A Test of Retroactivity

The Blumberg v. SFIC case squarely presented this issue. The insured’s property was damaged in 2022, before the repeal. However, the lawsuit was not filed until after SB-2A took effect.

• Trial court decision: The court sided with the insurer, ruling that the new law barred attorney fee recovery.
• Appellate reversal: The 5th DCA overturned this ruling, holding that the repeal cannot retroactively affect contracts issued under prior law. The court cited Menendez v. Progressive Express Insurance, where the Florida Supreme Court previously found that statutory rights tied to insurance contracts cannot be stripped away midstream.

Substantive Rights vs. Procedural Changes

Central to the ruling was the distinction between substantive rights and procedural rules. Attorney fee recovery, the court explained, is not a mere procedural tool—it is a substantive right embedded in the contract between insurer and insured. Once an insurance policy is issued, the rights it conveys cannot be erased by later legislation.

Conflicting Decisions Among Florida’s Courts

The Blumberg ruling adds to a growing split among Florida’s appellate courts:

• In agreement: The Second and Sixth District Courts of Appeal have held that attorney fee repeal does not apply retroactively.
• In conflict: The Third and Fourth District Courts of Appeal have allowed retroactive application, effectively stripping policyholders of rights tied to earlier contracts.

This patchwork of rulings means outcomes can vary dramatically depending on where a case is filed. For example, two homeowners with nearly identical claims may face different legal rights depending solely on which appellate district covers their county.

What Happens Next: The Florida Supreme Court’s Role

Because the appellate courts are divided, the Florida Supreme Court will likely be called upon to resolve the issue and create a uniform rule for the state. A decision from the state’s highest court could permanently determine whether homeowners who purchased policies before 2022 retain their fee recovery rights—or whether those protections have already been erased.

The Bigger Picture: Florida’s Insurance Crisis

This case comes at a time when Florida’s property insurance market is under immense strain. According to data from the Florida Office of Insurance Regulation, the state accounted for roughly 76% of all homeowners’ insurance lawsuits nationwide in 2021, despite only making up about 8% of the nation’s claims. Meanwhile, premiums for Florida homeowners have tripled over the last decade, and several major insurers have exited the state altogether.

Critics argue that removing attorney fee protections shifts even more power to insurers, leaving policyholders with fewer tools to fight back. Proponents claim the reforms are necessary to reduce litigation and stabilize costs. The Blumberg decision underscores just how high the stakes are for both sides.

What This Means for Policyholders

For now, homeowners with policies issued before December 2022 may still have the ability to recover attorney fees if they win disputes with their insurer—depending on which court hears their case. Until the Florida Supreme Court rules, uncertainty remains.

The American Adjuster Association believes cases like Blumberg v. SFIC highlight the importance of protecting consumer rights in insurance disputes. We will continue monitoring this issue closely, advocating for fair treatment of policyholders, and keeping our members informed about legislative and judicial developments that impact homeowners.