New Decision: Subrogation/Condominium Damage (Universal Prop. v. Loftus)

Michael Gelfand 8/29/2019

Florida’s Fourth District Court of Appeal addressed a subrogation claim arising from the flood lawsuits following water flowing from an upstairs unit into a downstairs unit, in Universal Prop. & Caus. Ins. v. Loftus, Case No. 4D-2192 (Fla. 4th DCA, August 7, 2019).

In one of the first decisions applying Section 718.111(11)(j) Fla. Stat. (2014), the primary focus was not who pays what, but who is entitled to bring a lawsuit to enforce the statutory allocation of risk, or whether the statute allowed a “private cause of action.” In doing so, the court reminds that common law subrogation claims remain viable.

On the road to a conclusion, the appellate court frequently stopped, providing holdings concerning the allocation of risk, a/k/a who pays for what repairs and replacements. These holdings may or may not be expected, but they will be of assistance in charting statutory territory.


Universal insured the downstairs unit which allegedly was damaged because of the negligence of the upstairs tenants. After making a payment for the downstairs owners’ loss, Universal as their subrogee sued for the amount Universal paid plus the downstairs unit owners’ deductible. There were two claims: 1) against the tenants for negligence; and, 2) against the landlord/owners pursuant to Section 718.111(11)(j) Fla. Stat. (2014) for vicarious liability for their tenants’ negligence. Interestingly, the decision does not recite what was the alleged negligent act, the cause of the leak.


The trial court granted a final summary judgment on Count II’s vicarious liability claim in favor of the landlord/owners finding that the Statute did not provide a private cause of action.


The first level of appellate analysis was whether the legislature intended to allow a private cause of action for a breach of the Statute. The creation of a statutory duty to benefit a class of individuals is not dispositive as to legislative intent to allow a private cause of action.

The appellate court examined the statutory text to divine legislative intent. Summarizing Section 718.111(11)(j) Fla. Stat. (2014), the court held that the paragraph:

simply defines when repair and replacement costs for property damaged by an insurable event are to be paid by the condominium association as a common expense and when they are the responsibility of the unit owner. As noted above, Section 718.111(11)(j) essentially creates a general rule that all damage in excess of an association’s property insurance coverage are a common expense of the Association.

The creation of the statutory duties was held not to demonstrate legislative intent for a private cause of action.

Explaining the Statute’s application, generally repair and replacement expenses that are the Association’s responsibility, when expenses are not paid by insurance, the expenses are common expenses.

The Statute continues in two subparagraphs creating exceptions shifting to a unit owner responsibility for repair and replacement expenses. Subparagraph 1 applies to expenses not paid by insurance proceeds and caused by intentional or negligent conduct or failure to comply with the declaration or rules. Subparagraph 2 extends the exception to property of other owners and property that unit owners must insure.

Returning to the question of whether there is a private cause of action, viewing the Statute as a whole the text was not superfluous, but providing a remedy, albeit without a private cause of action. When a unit owner is responsible for repair and reconstruction expenses, the Association’s remedy is to enforce those expenses as an assessment against that responsible unit owner pursuant to §718.111(11)(g) Fla. Stat. (2014).

Continuing, the court further held that the Statute does not provide a general right of subrogation for all damages. Instead, the at fault owners’ liability is limited to the amounts not paid by insurance proceeds. The statute’s language “without right of the subrogation rights of the insurer” only preserved Universal’s preexisting subrogation rights.

In conclusion the trial court decision was affirmed. While ruling against the insurer on the statutory vicarious liability claim the court stressed that the decision does not impact the insurer’s right to bring a subrogation claim for common law negligence.


This decision will significantly limit not only statutory subrogation claims; but, also statutory claims between owners alleging a breach of the Condominium Act’s statutory duty for an owner to pay for a loss. While the decision may be perceived to significantly limit an upstairs owner’s liability, that limitation may be overstated because the common law negligence claim apparently survives, including the right to subrogate that claim.

Question, if the declaration contained text allowing a subrogation claim would that survive a defense of inconsistency with the Condominium Act? Note that the factual scenario may occur in a townhouse attached parcel loss where water or other substance (fire?) moves horizontally. Would a claim based on a breach of an owner’s duty, as is contained in a number of declarations, support an independent claim?

Interestingly, the court did not address the Condominium Act’s broad private cause of action provisions in Section 718.303(1). It is not known if that Statute was raised, or if the claim of vicarious as opposed to direct liability impacted the analysis.

Practitioners may have observed a seemingly significant increase in insurer subrogation claims. Some may conclude that the business model of one or more insurers includes aggressively pursuing these claims. Thus, it may behoove associations, condominium and homeowners’ associations, to review unit/parcel owners’ duty to insure and allocation of risk. Perhaps timely as Dorian bears down!

Michael J. Gelfand

Past Chair

Real Property, Probate and Trust Law Section

of The Florida Bar

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Note: This article is not legal advice. Statements and comments made are not those of The Florida Bar or the RPPTL Section

© 2019 Michael J. Gelfand

Michael J. Gelfand

Florida Bar Board Certified Real Estate Attorney

Florida Supreme Court Certified Mediator:

Civil Circuit Court & Civil County Court

Fellow, American College of Real Estate Attorneys

The Real Property Probate and Trust Law Section of The Florida Bar
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