In Tanaka v. GEICO Gen. Ins. Co., 2013 WL 3701219 (M.D. Fla. July 12, 2013), a District Judge applied Florida law to grant summary judgment for a liability carrier on an alleged claim of bad faith in settlement as a breach of contract, "because this obligation is not expressly contained in the contract." Tanaka v. GEICO Gen. Ins. Co., 2013 WL 3701219 *3 (M.D. Fla. July 12, 2013).
The Federal Judge denied the liability carrier's motion for summary judgment on a separate count of alleged bad faith in settlement under Florida law, however. The bad faith claim was assigned from the insured to the injured claimant, and their assignment did not extinguish the bad faith claim in this case. Tanaka v. GEICO Gen. Ins. Co., 2013 WL 3701219 *2 (M.D. Fla. July 12, 2013)(Presnell, J.).
The Court held that the applicable, settled standard of extracontractual liability on the claim of bad faith in settlement was, to paraphrase, that a liability carrier owes an insured a duty of good faith to settle, if possible, where a reasonably prudent person would do so if faced with the prospect of paying the total recovery. Tanaka v. GEICO Gen. Ins. Co., 2013 WL 3701219 *2 (M.D. Fla. July 12, 2013).
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