Barton v. Capitol Preferred Insurance Co.
208 So. 3d 239
| Fla. Dist. Ct. App. | 2016Background
- Capitol insured the Bartons for homeowners/sinkhole coverage through 4/28/2011; policy limits $312,000. Capitol did not renew; Bartons obtained new coverage with Universal effective 4/28/2011–4/28/2012.
- Within two weeks of the new policy, the Bartons discovered structural damage; Universal denied coverage as occurring prior to its policy. The Bartons then submitted a sinkhole claim to Capitol (no date of loss specified); Capitol denied the claim and invited documentation if the loss fell within its policy period.
- The Bartons sued both insurers for breach of contract; Universal later paid/settled after testing found sinkhole-related damage. The Bartons continued against Capitol and filed a civil remedy notice under §624.155 alleging inadequate investigation/denial.
- Capitol denied the civil remedy notice, then served a §768.79 offer of judgment for $65,000 (no release or express waiver of bad-faith rights); the Bartons accepted, received $65,000, and dismissed their breach claim.
- The Bartons then filed a first-party bad-faith suit against Capitol. Capitol moved for summary judgment, arguing the Bartons had not obtained a favorable resolution or a determination of liability/extent of damages. The trial court granted summary judgment; the Fifth DCA reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether insured obtained a favorable resolution of underlying claim sufficient to state bad-faith claim | Settlement acceptance and payment of $65,000 was a favorable resolution permitting bad-faith suit | Payment and settlement for less than policy limits did not establish favorable resolution | Held for plaintiff: payment/settlement constituted a favorable resolution permitting bad-faith suit |
| Whether there was a determination of liability and extent of damages required before bad-faith suit | Bartons: settlement/confession of judgment served as determination of liability and damages | Capitol: no adjudication or determination because it neither admitted liability nor paid policy limits | Held for plaintiff: settlement/payment can serve as the required determination; insurer need not pay policy limits |
| Whether insured must obtain liability/extent via trial (vs. settlement) before suing for bad faith | Bartons: not required to obtain via trial; settlement is an acceptable means | Capitol: relied on precedent requiring determination but argued settlement here insufficient | Held: Court follows precedent allowing alternative means (settlement, arbitration, stipulation) to satisfy prerequisite |
| Whether statutory prerequisites under §624.155 were met after settlement | Bartons: they filed civil remedy notice and waited; settlement did not deprive them of remedy | Capitol: argued prerequisites unmet because no determination of damages/liability | Held: statutory condition precedent satisfied; statute does not require recovery of policy limits or original demand amount |
Key Cases Cited
- Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So. 2d 1289 (Fla. 1991) (bad-faith cause accrues only after favorable resolution of underlying first-party claim)
- Vest v. Travelers Ins. Co., 753 So. 2d 1270 (Fla. 2000) (bad-faith action is premature until determination of liability and extent of damages)
- Fridman v. Safeco Ins. Co. of Ill., 185 So. 3d 1214 (Fla. 2016) (insured need not obtain determination via trial; settlement or other means may satisfy prerequisite)
- Ivey v. Allstate Ins. Co., 774 So. 2d 679 (Fla. 2000) (insurer's voluntary post-suit payment can operate as confession of judgment entitling insured to fees)
- Brookins v. Goodson, 640 So. 2d 110 (Fla. 4th DCA 1994) (insurer's payment pursuant to settlement can establish insured's valid claim for purposes of bad-faith suit)
- State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So. 2d 55 (Fla. 1995) (discussed in relation to settlement/payment effects)
Reversed and remanded for further proceedings consistent with opinion.