Higgins v. West Bend Mutual Insurance
85 So. 3d 1156
Fla. Dist. Ct. App.2012Background
- Higginses, Minnesota residents, were injured in a 1999 Florida accident while insured by West Bend under a Minnesota UM policy.
- The at-fault driver’s policy settled for $100,000; West Bend refused to settle for UM limits, leading to a Florida bad-faith action in 2007.
- A jury awarded Higginses $260,000; after setoff, West Bend paid the UM limits of $100,000.
- Higginses sued under Florida statutes for first-party bad faith; West Bend moved to determine applicable state law governing the contract and claim.
- The trial court applied lex loci contractus, ruling Minnesota law controlled the bad-faith claim, and granted summary judgment for West Bend.
- The Florida appellate court affirmed, holding Minnesota law applies and denying attorney’s fees; the decision relied on distinctions between first- and third-party bad-faith actions and Restatement factors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What choice-of-law rule applies to first-party bad faith actions? | Higginses rely on Grounds/performance rule to Florida. | West Bend argues lex loci contractus governs. | Minnesota law governs under lex loci contractus. |
| Is the place of contracting or performance controlling for first-party bad faith? | Performance rule should apply if West Bend’s conduct occurred in Florida. | Performance concerns are about mandate of payment; contracting state should apply. | Place of contracting (Minnesota) governs; performance rule does not control this first-party claim. |
| Does Grounds apply to first-party bad faith actions? | Grounds dictates place of performance; Florida should govern. | Grounds is limited to its context and misapplied to first-party actions. | Grounds is distinguishable; first-party context yields Minnesota law. |
| Do Restatement § 6 interest factors support Florida or Minnesota? | Florida has interest due to original Florida action. | Minnesota interests in contract stability and payment to Minnesota residents are stronger. | Florida interests are outweighed; Minnesota has greater interest. |
Key Cases Cited
- Gov’t Emps. Ins. Co. v. Grounds, 332 So.2d 13 (Fla.1976) (place of performance governs performance-related obligations)
- Lumbermens Mut. Cos. Co. v. August, 530 So.2d 293 (Fla.1988) (uninsured/underinsured issues governed by contracting state)
- Sturiano v. Brooks, 523 So.2d 1126 (Fla.1988) (insurance coverage issues governed by place of contracting)
- Progressive Express Ins. Co. v. Scoma, 975 So.2d 461 (Fla.2d DCA 2007) (distinguishes first- vs third-party bad-faith actions)
- Aetna Cas. & Sur. Co. v. Huntington Nat’l Bank, 587 So.2d 483 (Fla.4th DCA 1991) (Restatement § 6 factors are influential in conflicts of laws)