... LIABILITY, DAMAGES, AND CIVIL REMEDY NOTICES.
To summarize: First-Party Bad Faith claims in Florida are only available by Statute. A "Civil Remedy Notice" is a condition precedent to perfecting an action under the Florida Statute. A Federal Judge in Florida has recently applied the requirements of a Civil Remedy Notice or "CRN" that must be met before a Policyholder can sue under the Florida Bad Faith Statute, Fla. Stat. § 624.155:
The CRN “shall state with specificity the following information, and such other information as the department may require”:
1. The statutory provision, including the specific language of the statute, which the authorized insurer allegedly violated.
2. The facts and circumstances giving rise to the violation.
3. The name of any individual involved in the violation.
4. Reference to specific policy language that is relevant to the violation, if any. If the person bringing the civil action is a third party claimant, she or he shall not be required to reference the specific policy language if the authorized insurer has not provided a copy of the policy to the third party claimant pursuant to written request.
5. A statement that the notice is given in order to perfect the right to pursue the civil remedy authorized by this section.
Fla. Stat. § 624.155(3)(b). “[S]trict compliance with the statute is required” in providing a proper CRN.
Kafie v. Northwestern Mut. Life Ins. Co., 2011 WL 4499051 *7 (S.D. Fla. September 27, 2011), Download Kafie v. Northwestern Mutual Life Insurance Co. (S.D. Fla. Case No. 11.21251, Order Filed September 27, 2011) PUBLIC ACCESS.
There is also a Common Law requirement which has been added to Florida Statutory Bad Faith Claims. This requirement is not found in the Florida Statute. It is found only in judicial holdings in the Florida case law interpreting the Statute. The requirement imposed by Courts applying Florida law is that first there must be a determination of both (1) the Insurance Company's liability on the Policy and (2) the Policyholder's Damages, before the Policyholder can sue for Bad Faith under Section 624.155.
These two requirements, one found in a Statute and the other found only in case law, sometimes come together in the same case, as in Kafie v. Northwestern Mut. Life Ins. Co., 2011 WL 4499051 (S.D. Fla. September 27, 2011). The ruling addressed here, which disposed of one of many First-Party Bad-Faith Claims alleged in that case, was that a Civil Remedy Notice can never act as a condition precedent for a First-Party Bad Faith Claim based on conduct taking place after the Civil Remedy Notice was filed.
In Kafie, the Policyholder, Dr. Kafie, filed two Civil Remedy Notices alleging Bad Faith conduct by his Disability Insurance Company. He sued for Bad Faith in an Amended Complaint in which he alleged several Statutory Bad Faith Claims. One of them was dismissed. That was Dr. Kafie's Claim that Northwestern Mutual violated one of the provisions of Florida's Unfair Claim Settlement Practices Act, Fla. Stat. § 626.9541(1)(i)(2), because the Insurance Company allegedly made material misrepresentations to him in order to reduce the amount of the settlement he would accept on his Claim for disability benefits.
Dr. Kafie satisfied his burden to prove that (1) the Insurer's liability on the Policy and (2) the amount of his Damages were determined in his favor, said the Federal Court. "These determinations occurred at the trial following which a verdict was entered for Kafie on all counts, finding him disabled and entitled to benefits ...." Id. at *7.
Further, this particular claim was in the nature of alleged "fraud," since it was based on alleged "misrepresentations". The Federal Judge also held that the Amended Complaint satisfied the obligations imposed under Federal Rule of Civil Procedure 9(b) to allege fraud with specificity. Id. at *11.
However, the alleged misrepresentations in question arose, if at all, "out of settlement negotiations after the verdict in the trial in which the issues raised in the First CRN were litigated." Accordingly, the Federal Court held in this case that the CRN put at issue in the Amended Complaint could not support this particular Claim of First-Party Bad Faith, as a matter of Florida law. Id. [Emphasis by the Court.]
When a Civil Remedy Notice is filed before the alleged conduct complained of takes place, or the CRN otherwise just does not provide adequate Notice of the conduct now claimed to be actionable as Bad Faith, this case arguably stands for the rule of law that in such cases no Bad Faith cause of action or claim is ever available under Florida's Bad-Faith Statute.
The 22nd Annual Bad Faith Litigation Conference of the American Conference Institute is being held in 2011 in Orlando, Florida on November 30 and December 1, 2011. The author will be speaking on both days. Here is a link to the American Conference Institute Website Page which features this Conference including registration. If you or someone you know would like to attend, the ACI is offering a discount to the readers of this weblog. If you would like to explore the ACI discount offer, contact:
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Marc Gerstein
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