152 So. 3d 606
Fla. Dist. Ct. App.2014Background
- Insureds suffered Hurricane Wilma damage (Oct 2005) and filed a homeowners claim (Sept 2007); insurer initially estimated damages below the deductible and paid nothing.
- Insureds invoked policy appraisal (Apr–Jun 2008); appraisers differed; parties petitioned the court to appoint a neutral umpire (Aug 2008); umpire awarded an amount above the deductible (Oct 2009).
- Insurer accepted the umpire’s award and paid the insureds the award less the deductible (Dec 2009); parties then dismissed the appraisal petitions with prejudice (Apr 2010).
- After dismissal, insureds sued for statutory bad faith under Fla. Stat. § 624.155, alleging failure to attempt in good faith to settle; insurer moved for summary judgment arguing the bad-faith claim was not ripe.
- Trial court granted summary judgment for insurer relying on this court’s Lime Bay decision; insureds appealed asserting that appraisal payment determined coverage liability and damages, making the bad-faith claim ripe.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ripeness of statutory bad-faith claim | Bad-faith claim is ripe once insurer’s liability for coverage and extent of damages are determined (here by appraisal award). | Claim not ripe because insurer’s liability for breach of contract has not been adjudicated. | Court holds ripeness requires determination of liability for coverage and extent of damages, not necessarily a judicial finding of breach of contract; bad-faith claim is ripe after appraisal award. |
| Effect of appraisal award | Appraisal award constitutes a "favorable resolution" or determination of liability and damages sufficient to trigger bad-faith accrual. | Appraisal does not substitute for final adjudication of breach; plaintiff must first obtain favorable resolution in breach action. | Appraisal award can satisfy Blanchard/Vest prerequisite; it is a sufficient determination to ripen bad-faith claims. |
| Precedent conflict (Lime Bay vs. Trafalgar/Vest) | Trafalgar and supreme-court precedent support ripeness after appraisal/payment. | Lime Bay requires resolution of breach-of-contract liability before bad-faith suit. | Court recedes from Lime Bay to the extent it required a judicial determination of breach; follows Vest and Trafalgar. |
| Scope of decision / merits of bad-faith claim | N/A (seeks reinstatement) | N/A (court does not resolve merits) | Court reverses and remands to reinstate bad-faith claim but takes no position on its substantive merit. |
Key Cases Cited
- Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So.2d 1289 (Fla. 1991) (bad-faith cause of action accrues only after determination of liability and extent of damages on the underlying claim)
- Vest v. Travelers Ins. Co., 753 So.2d 1270 (Fla. 2000) (clarifies Blanchard: determination of liability and damages are elements of bad-faith claim and may be satisfied by settlement/payment; once satisfied, bad-faith damages may accrue from the date of proven violation)
- Lime Bay Condominium, Inc. v. State Farm Fla. Ins. Co., 94 So.3d 698 (Fla. 4th DCA 2012) (held bad-faith action premature while breach-of-contract case remained pending)
- Trafalgar at Greenacres, Ltd. v. Zurich Am. Ins. Co., 100 So.3d 1155 (Fla. 4th DCA 2012) (held appraisal award constituted a favorable resolution sufficient to pursue bad-faith claim)
- Brookins v. Goodson, 640 So.2d 110 (Fla. 4th DCA 1994) (settlement can be the functional equivalent of determination of damages required to bring bad-faith claim)
- Dadeland Depot, Inc. v. St. Paul Fire & Marine Ins. Co., 945 So.2d 1216 (Fla. 2006) (arbitration award establishing validity of insured’s claim satisfies condition precedent for bad-faith action)
- Imhof v. Nationwide Mut. Ins. Co., 643 So.2d 617 (Fla. 1994) (determination of damages need not be by litigation; arbitration award can suffice)