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Florida appeals court affirms sanctions denial in Citizens fee dispute
The court said Citizens effectively reset its fee request clock by serving a second, duplicate 57.105 safe harbor notice, allowing the policyholders to dismiss within the 21 day window.
Citizens Property Insurance lost a bid to collect fees after a Florida appeals court on August 12, 2026 upheld a trial court ruling refusing sanctions against policyholders and their lawyer. The dispute centered on how the insurer timed fee demands under Section 57.105 of Florida Statutes, including the statute's 21 day safety valve for withdrawing or correcting the offending claim.
The underlying case began with a Hurricane Irma claim involving homeowners coverage from December 9, 2016 to December 9, 2017. After the insureds reported storm damage on September 21, 2017, Citizens accepted coverage and paid $28,914.12, later issuing additional supplemental payments totaling more than $212,000 following an appraisal demand.
The insureds sued, first in March 2019 and again in December 2022, seeking $142,500 tied to disputed settlement proposals from the earlier case. After the second round, Citizens moved for fees, arguing claims were not supported by material facts or then existing law, but the court found the timing and effect of the insurer's notices were dispositive.
Citizens served its first safe harbor notice on August 20, 2024 and then served a second notice on January 8, 2025 on the same grounds. The insureds dismissed the suit on January 24, day 16 of the renewed 21 day window, and the appeals court held that a timely dismissal in response to a later, successive motion on the same grounds ends any shot at sanctions on the earlier one.