Florida’s tort reform, enacted through House Bill 837 in 2023, introduced significant changes to the state’s civil litigation landscape. One notable provision affects how insurers handle liability claims that may exceed policy limits. This blog post explores the use of interpleader in such scenarios and how it is evolving in the current litigation landscape.
What Is Interpleader?
Interpleader is a legal action that allows a party holding money or property (the “stakeholder”) to initiate a lawsuit asking the court to determine the proper claimant among two or more competing parties. In the context of personal injury litigation, interpleader is often used when insurance policy limits may be insufficient to satisfy all potential claims.
The use of Interpleader in Florida post HB837
Under Florida Rule of Civil Procedure 1.240, a party may bring an interpleader action when:
“[P]ersons having claims against the plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be exposed to double or multiple liability. It is not ground for objection to the joinder that the claim of the several claimants or the titles on which their claims depend do not have a common origin or are not identical but are adverse to and independent of one another, or that the plaintiff avers that the plaintiff is not liable in whole or in part to any or all of the claimants. A defendant exposed to similar liability may obtain such interpleader by way of crossclaim or counterclaim. The provisions of this rule supplement and do not in any way limit the joinder of parties otherwise permitted.” FL. R. Civ. P. 1.240 (2025)
In addition to Rule 1.240, the Florida statutes provide a general interpleader mechanism through Fla. Stat. §86.011, which gives courts the power to declare rights in a justiciable controversy, often used in conjunction with interpleader actions. House Bill 837, effective March 24, 2023, introduced several reforms aimed at reducing litigation costs and promoting fair settlements. Under the revised statutes, insurers are encouraged to:
- Promptly investigate and evaluate claims to determine the extent of liability.
- Engage in good faith negotiations with claimants to settle claims within policy limits.
- Consider interpleader actions when faced with multiple claimants and insufficient policy limits to satisfy all claims.
As a result of these reforms, more claimants may be incentivized to litigate earlier, due to the shorter statute of limitations — potentially increasing the pressure on insurers to file interpleader actions quickly. In addition, bad faith reforms (codified in Fla. Stat. § 624.155(4)) create a “safe harbor” for insurers who act in good faith, including making a “tender” of policy limits in the face of multiple claims. Finally, Fla. Stat. § 624.155(6) now provides a mechanism for both interpleader options and binding arbitration options in these situations. One caveat to the statute does note that “[A]n insurer’s interpleader action does not alter or amend the insurer’s obligation to defend its insured.” Fla. Stat. § 624.155(6) (a) (2025). This could create a situation where the insurance company has no exposure to an extracontractual claim and yet must provide a defense to a party whose assets may be at risk. While this statute also provides for binding arbitration options, there is little to no direction on which rules will apply. As time passes, this issue will probably be further addressed as these claims make their way through the Florida Courts.
Practical Considerations for Plaintiffs and Defendants
The use of interpleader has now changed the strategy for many cases. For plaintiffs’ attorneys, the filing of an interpleader action means competing with other claimants for a limited amount of funds. Thus, early discovery becomes essential to build the strongest possible damages case early and to consider global settlement discussions. For defense counsel and insurers, the use of interpleader can cap exposure at policy limits, avoid bad faith claims when executed properly, and expedite resolution of complex multi-party claims. Additional advantages of using interpleader include avoiding multiple lawsuits, thereby reducing litigation costs and the risk of inconsistent judgments. However, there are considerations to remember and they include timeliness, as a delayed interpleader action may be viewed skeptically, potentially exposing insurers to additional liabilities. While interpleader can reduce litigation costs overall, initiating the action involves legal fees and court costs. Early settlement options should also be explored, including globale settlement conferences, in an effort to curtail any exposure. In addition, the court must approve the interpleader action, and claimants may challenge its appropriateness. Thus this new option is not without its risks to the parties involved.
Case Law Illustrating Interpleader Use in Florida
Florida courts have long recognized interpleader as a valid approach for litigants dealing with competing claims for quite some time. The following cases can provide a framework of steps to follow and consider when filing an interpleader action post HB837:
- Wassman v. Travelers Casualty & Surety Co., 797 So.2d 626 (Fla. App. 2001)(“… An action for interpleader is a procedural device a stakeholder may use to settle conflicting claims to the same thing or fund. Lowry v. Downing Mfg. Co.,73 Fla. 535, 74 So. 525 (1917); V.I.P. Real Estate Corp. v. Florida Exec. Realty Management Corp., 650 So.2d 199 (Fla. 4th DCA 1995). It is an equitable remedy, which permits the stakeholder to bring the fund into court so that the court can decide among the conflicting claims. Lowry, 74 So. at 526; Jax Ice & Cold Storage Co. v. South Fla. Farms Co., 91 Fla. 593, 109 So. 212, 218 (1926). The purpose of interpleader is to protect the stakeholder from the vexation of multiple suits. Paul v. Harold Davis, Inc., 155 Fla. 538, 20 So.2d 795 (1945). See also R. Civ. P. 1.240 (“Persons having claims against the plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be exposed to double or multiple liability…”).
- N & C Properties v. Vanguard Bank and Trust Co., 519 So.2d 1048 (Fla. App. 1988)(“… interpleader is a two stage “action.” However, there is no rule that demands two separate proceedings be held to complete an interpleader action. The first stage is a determination as to the propriety of the interpleader. If the stakeholder has no interest in the fund and no independent liability is asserted against him, an order of interpleader must be entered.”)
- Red Beryl, Inc. v. Sarasota Vault Depository, Inc., 176 So.3d 375 (Fla. App. 2015)(company may still act as a proper stakeholder for interpleader purposes even if it claims no interest in the gems).
- Cindy Vo v. Scottsdale Ins. Co., 1D2023-2228 (Fla. App. Feb 26, 2025) (holding that section 624.1551, which requires an adverse adjudication before filing a suit for extracontractual damages, cannot be applied retroactively to a breach of contract action settled prior to the statute’s enactment as it eliminates a previously valid cause of action).
How does Interpleader work in Florida Courts?
When multiple parties claim entitlement to the same funds, such as insurance proceeds in a personal injury case, an interpleader action allows the stakeholder (often an insurer) to deposit the disputed funds with the court and request judicial determination of rightful ownership. While filing the action may be fairly simple, additional steps may also be required. Some considerations to remember as you review the options for interpleader include:
- Jurisdiction and Venue: action must be filed in the appropriate Florida court.
- Court Approval: court order authorizing the deposit of funds into the registry.
- Payment Methods: accepted forms typically include cashier’s check or money order, attorney trust account check or wire transfer where permitted.
- Registry Fees: Florida courts usually charge fees for receiving funds into the registry. Review each jurisdiction to determine what fees may apply.
- Stakeholder Discharge: upon successful deposit and absent any independent liability, the court may discharge the stakeholder from the action.
- Claimant Litigation: remaining parties litigate their respective claims to the funds.
- County-Specific Procedures for Depositing Funds: each county may have specific procedures and requirements for depositing funds into the court registry. Review the Clerk of Court website and local rules to determine the requirements.
Conclusion
Interpleader actions are vital tools in Florida litigation, especially when multiple claimants vie for limited funds. Properly initiating an interpleader action and adhering to county-specific procedures for depositing funds can shield stakeholders from multiple liabilities and streamline the resolution process. However, given the nuances and recent changes in the Florida statutes, the case law and the local rules, it’s essential to review the facts of each particular case and the local rules to ensure compliance with all procedural requirements.