A condominium association told the Florida Supreme Court on Tuesday that an insurer can't sue for damages to an owner's unit, arguing a 2021 state law that went into effect provided immunity from a negligence lawsuit stemming from a policy claim brought afterward.

Representing the Grove Isle at Vero Beach Condominium Association Inc., Debbie Maken of Lydecker LLP said during oral arguments in Tallahassee that a state law amending statute 627.714(4) that went into effect in July 2021 barred Universal Property & Casualty Insurance Co. from enacting its right to subrogation by filing a lawsuit in place of the unit owner because her client waived the same right against the owner.

In April 2022, Universal sued Grove Isle in Indian River County, Florida, state court over negligence after a water sprinkler damaged Dolores Senko's condo in August 2021. Universal appealed a November 2022 summary judgment ruling in favor of the association, although Florida's Second and Fourth district courts of appeal issued opposing opinions regarding 627.714(4) and created a certified conflict.

"There's a reason the Second District found that 627.714(4) was only prospectively applied," Maken said Tuesday. "The amendment here attaches consequences to events that took place after the effective date of the statute, which is July 1, 2021. Hence, there are no concerns with retroactive application."

Universal issued Senko a homeowner's policy in April 2021, and the policy had a subrogation provision giving Universal the right to sue for negligence in the event the company paid Senko a loss for her claims, court filings show.

In June 2021, Florida passed Senate Bill 630, which eliminated subrogation rights in individual unit owners' policies against associations if a condo association's policy doesn't provide the same rights against the unit owners.

In the lower court case, Universal argued the statute's amendment was unconstitutional if retroactively applied. The insurer added it still had a subrogation right since the policy was issued two months before S.B. 630 went into effect.

On appeal, the Fourth District Court of Appeal majority in 2024 reversed the lower court's decision after finding Universal's rights were applied retroactively, although the dissenting opinion stated there wasn't retroactivity because the insurer could not have known a claim would occur at the time the policy was issued in April 2021.

Grove Isle brought the case up to the Florida Supreme Court in 2024, saying the Fourth District Court of Appeal's opinion conflicted with an opinion the Second District Court of Appeal issued in March of that year in Universal Property and Casualty Ins. Co. v. Laguna Riviera Condominium Association , which held that 627.714(4) was prospective and barred the insurer's negligence claims.

During Tuesday's arguments, Florida Supreme Court Justice John D. Couriel told Maken that most contracts are "forward-looking in some sense."

"They require performance," Justice Couriel said. "There will be some expectation, and it would seem to me that we would have to have some way to say these expectations, while perhaps not fully realized, are nonetheless subject to some protection. Help me understand what makes subrogation different."

Justice Charles T. Canady said the Florida Legislature generally avoids changing existing contracts, saying contracts aren't "absolutely sacrosanct," but are something that should be protected.

Maken responded that whom the insurer gets to sue is "an ancillary thing" and that the Legislature left the contract intact. She added that the statute's amendment had a conditional effect, saying the law granted Grove Isle a defense because the association gave up subrogation against Senko.

Nancy W. Gregoire Stamper of Birnbaum Lippman & Gregoire PLLC, arguing for Universal, told the state high court that a "contract is not a matter of legislative grace" unless the contract is illegal.

Stamper said the state Legislature didn't eliminate subrogation, but instead eliminated Universal's policy right, which it purchased. She compared the issue to assignment of benefits, which are also subrogation. The Legislature could have eliminated Senko's right to sue for a tort, which, in this case, is her right to sue for water damage, but didn't, Stamper said.

"We bought a right," Stamper said. "The right still exists."

Grove Isle is represented by Debbie Maken, Shaun R. Koby and Forrest L. Andrews of Lydecker LLP.

Universal is represented by Nancy W. Gregoire Stamper of Birnbaum Lippman & Gregoire PLLC and Beth E. Allen of Kubicki Draper.

The case is Grove Isle at Vero Beach Condominium Association Inc. v. Universal Property & Casualty Insurance, case number SC2024-0764, in the Supreme Court of the State of Florida.