It is well settled in Florida that a statutory First-Party Bad Faith action is premature until two conditions have been satisfied: First, the First-Party Insurance Company raises no defense which would defeat Coverage including but not limited to situations where the Coverage Defense has been raised and adjudicated against the Insurance Company by a Florida Court of competent jurisdiction; and, Second, the actual extent of the Insured's loss has been finally determined, meaning that a recognized determination has been made as to liability and the extent of damages.
Recognizing these twin conditions, a Florida Appellate Court has recently held that an Appraisal Award can qualify as a required "final determination". Trafalgar at Greenacres, Ltd. v. Zurich American Insurance Co., 2012 WL 3822215 *2 (Fla. 4th DCA September 5, 2012). This decision appears to resolve an open question of Florida law as to whether an Appraisal Award can ever qualify as a final determination of the Insured's loss, meaning both liability and the extent of damages, for purposes of Florida's Bad Faith Statute, Fla. Stat. § 624.155. See 2 Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith § 11:24 (2012 Supplement, 3d Edition West Publishing Company).
It has also been recently held, although not deciding an open question in Florida law, that a Policyholder pursuing a statutory First-Party Bad Faith cause of action cannot allege that there has been a final determination of liability where the Policyholder's Breach of Contract case is still pending. Lime Bay Condominium, Inc. v. State Farm Florida Insurance. Co., 94 So. 3d 698, 699 (Fla. 3d DCA 2012). See, in addition, Maraist v. State Farm Mut. Auto. Ins. Co., 2012 WL 3536759 *1 (N.D. Fla. 2012)(granting Underinsured Motorist Carrier's Motion to Dismiss its Insured's Bad-Faith Claim because Florida law "requires not an allegation but a determination" of liability and the extent of the Insured's damages [emphasis added]).
In another recent case, a Federal Court effectively held that under Florida law, a First-Party Insurance Carrier cannot close its eyes to the extent of information it could obtain about its Insured's damages where the available information indicated an investigation of the Claim was called for. In the case of King v. GEICO, 2012 WL 4052271 *4 (M.D. Fla. September 13, 2012), GEICO's Insured filed a First-Party Bad Faith lawsuit against GEICO based in part on these allegations concerning a claim as to which GEICO did not conduct any additional investigation into the extent of its Insured's, Mr. King's, injuries after it received its Insured's Settlement Offer nor after GEICO received the Insured's Civil Remedy Notice of Insurer Violation of Florida's Bad-Faith Statute:
Although having the right to do so during the sixty-day window following the filing of the CRN, GEICO never attempted to obtain a statement under oath from King, to receive medical authorization allowing access to King's medical providers and treating physicians, or to conduct a compulsory medical examination of King to ascertain the severity of his damages. Nor did GEICO seek review of King's medical records by a physician or an opinion from an outside attorney as to the value of King's claim. In sum, GEICO made no efforts to investigate the claim beyond review of the demand package, either at the time of the initial settlement offer or upon receipt of the CRN.
The Court held that GEICO "presents a strong argument that it acted in good faith" at the time it received the CRN from its Insured, by pointing to its lack of actual knowledge of facts developed later which would show that its Insured's injuries were severe. Nonetheless, GEICO's Motion for Summary Judgment on this record was denied "because a reasonable jury could find that, under the totality of the circumstances, GEICO's failure to further investigate King's claim at the time it received the CRN amounted to bad faith". King v. GEICO, 2012 WL 4052271 *4 (M.D. Fla. September 13, 2012). [Emphasis added.]
The Court further held that the Civil Remedy Notice at issue in that case was sufficiently specific to satisfy Florida law, in part because "[g]iven the settlement letter detailing King's medical expenses and prognosis received by GEICO just two months prior to the CRN, common sense dictates how GEICO might have responded given the information provided." King v. GEICO, 2012 WL 4052271 *8 (M.D. Fla. September 13, 2012).
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