In Government Employees Insurance Co. v. Prushansky, 2012 WL 6103220 (S.D. Fla. December 7, 2012), GEICO filed a Declaratory Relief Action based on an alleged Release. The Federal Court's Opinion recites that GEICO sued the injured claimant, i.e., the Personal Representative of a person who was allegedly killed by a person GEICO insured under an Automobile Liability Policy.
The injured claimant counterclaimed in three counts: Alleged Bad Faith in settlement of the underlying lawsuit which was filed against GEICO's Insured; Breach of Contract; and Breach of Fidcuiary Duties. The Court in this case granted GEICO's Motion to Dismiss both the Breach of Contract Count and the Breach of Fiduciary Duties Count, ruling that under Florida law both claims are "subsumed" under a Bad Faith Claim under the circumstances alleged in this case. Government Employees Insurance Co. v. Prushansky, 2012 WL 6103220 *3 (S.D. Fla. December 7, 2012). That was enough to decide the Motion to Dismiss. However, the Federal Court did not stop there.
The Federal Court's Opinion in support of this decision swept broadly, caught up in some generalizations, apparently. Until some recent decisions, in the Federal Court's Opinion the Supreme Court of Florida "had begun to view both first-party and third-party bad faith insurance claims similarly." In particular, the Federal Judge noted that Florida Statutory Bad Faith Claims are often treated the same way in important respects. However, one of those respects does not necessarily include damages, although the Federal Judge apparently took that view.
As a source for the proposition that damages are identical under First-Party Bad Faith Claims, and under all Claims for Third-Party Bad Faith, the Federal Court quoted from Fla. Stat. § 627.727(10), under which the damages recoverable from an Uninsured Motorist Carrier under Florida's Bad Faith Statute "shall include the total amount of the claimant's damages, including the amount in excess of the policy limits ...." Fla. Stat. § 627.727(10), quoted by Government Employees Insurance Co. v. Prushansky, 2012 WL 6103220 *4 n. 3 (S.D. Fla. December 7, 2012).
What the Federal Court did not acknowledge in this dictum, however, is that not all First-Party Policies are Uninsured Motorist Policies. Moreover, the Insurance Policy before the Court in that case is an Automobile Liability Insurance Policy and, in the context of the Motion to Dismiss before the Court, First-Party Insurance Coverages apparently had nothing to do with the issues.
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