Claims and Bad Faith Law Blog

"STATE INDEPENDENT LEGISLATURES DOCTRINE" NOT DOCTRINE, NOT EVEN A THING.

The "state independent legislatures doctrine" is not a doctrine.  It has never been adopted by the Supreme Court or by any other court for that matter.

It came from three concurring opinions in Bush v. Gore, apparently.  Two of the concurring Justices are dead, William H. Rehnquist and Antonin Scalia, and the third is Clarence Thomas.

Parenthetically, I recall from reading all the opinions in that case that the majority held that Bush v. Gore  was never to be cited as precedent in any other case?

Anyway, the concurring theory then was that whatever state legislatures say about elections is the final word.  This theory of state-legislatures-are- supreme applies in their view even if a state supreme court says that what the legislatures say is unconstitutional or otherwise unlawful.  It also applies, in their view, even if the state Constitution says that the state's supreme court has the final say on what the state's law is.

In the United States Supreme Court, though, some but not yet a majority of the living Justices say that state legislatures should rule because after all, these Justices are on the federal Supreme Court, the Highest Court in the land, you know.

They apparently do not see any irony in the view that a federal judge would tell the states what to do about state law.

Or that the United States Supreme Court simply does not have jurisdiction here.  But that doesn't matter to them, apparently, if they get the votes they need to do what they will.

I guess it is no coincidence that this view apparently surfaced in the Bush v. Gore case.  This view fits with the result in that case that awarded a presidential election to the loser of the popular vote. 

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A FLORIDA CIVIL REMEDY NOTICE BY A DIFFERENT NAME.

The requirements of a Civil Remedy Notice under Florida's Bad Faith Statute, Section 624.155, have been in place for awhile.  Effective July 1, 2021, another Florida Statute took effect containing a requirement of specified notice within a specified time as a "condition precedent to filing suit under a property insurance policy[.]"[1] 

The new statute, Section 627.70152, applies "exclusively" to "all suits not brought by an assignee arising under a residential or commercial property insurance policy, including a residential or commercial property insurance policy issued by an eligible surplus lines insurer."[2]

The notice required by Section 627.70152 "must state with specificity" at least eight things, most of which are in numbered sections or paragraphs.[3]  If the notice meets the statutory requirements, then the carrier must respond in specified ways, ordinarily within specified periods of time.[4]  One response among the range of responses by the property insurance carrier is to "respond by making a settlement offer or requiring the claimant to participate in an appraisal or another method of alternative dispute resolution."  The statute requires this response, in fact, if the notice alleges "an act or omission by the insurer other than a denial of coverage[.]"[5]

To be continued .... 

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[1] Fla. Stat. § 627.70152(3)(a).

[2] Fla. Stat. § 627.70152(1).  As of April, 2022, six cases are listed in Florida Statutes Annotated as citing or interpreting this statute.  All six involved motions to dismiss and all six were decided by federal courts.  It appears that none of them involved bad faith claims.

[3] See Fla. Stat. § 627.70152(3)(a).

[4] See Fla. Stat. § 627.70152(4)(a) & (b).

[5] Fla. Stat. § 627.70152(4)(b).

APPEASEMENT WITH JURISDICTION NO BETTER THAN APPEASEMENT WITH TERRITORY.

The case raises questions about ceding jurisdiction over public health policy to one federal district judge.  The case is Health Freedom Defense Fund v. Biden (M.D. Fla. No. 8:21-cv-01693). 

The Complaint alleged jurisdiction only on the basis of diversity.  The Complaint was filed in the names of three plaintiffs.  It alleged that two individual plaintiffs are from Florida, and that the third plaintiff is a Wyoming corporation headquartered in Idaho.

The two individuals claimed that they wanted to use public travel in the future.  Their travel plans might include travelling by airplane from the Tampa airport, and they alleged that to do so, they would have had to comply with a mandate to wear masks in the COVID-19 pandemic.  That entitled them, they alleged, to sue the many officials of the federal government in Tampa.  Download Health Freedom Defense Fund v. Biden Doc. 1 Complaint filed 07.12.21 (M.D. Fla. No. 8.21.cv.01693)  (jurisdiction alleged under 28 U.S.C. §§ 1331 & 1346, and 5 U.S.C. § 702.03; venue alleged under 28 U.S.C. § 1391(b)(2)&(e)(1)).

The Department of Justice filed an Answer with no affirmative defenses on behalf of the United States.  Download Health Freedom Defense Fund v. Biden Doc. 20 Answer filed 1013..21 (M.D. Fla. No. 8.21.cv.01693).pdf NO ADS! 

They did not challenge jurisdiction or venue in Tampa.

They did agree, however, that the plaintiffs could amend their complaint.  Download Health Freedom Defense Fund v. Biden Doc. 39 Amended Answer filed 12.13..21 (M.D. Fla. No. 8.21.cv.01693)  But they did not defend against the Amended Complaint, not even filing an Answer.

They did not file any affirmative defenses in response to this do-over opportunity, either.

The plaintiffs' uncontested theories of jurisdiction and venue are simple:  This suit could have been brought anywhere.

That means of course that if these theories prevail -- and they sure seem to have prevailed so far -- a suit like this can be brought anywhere.

That offers an alternative to the appeal which the DOJ has filed, at least an alternative to running the risk of bad precedent from the Eleventh Circuit Court of Appeals.  The greatest danger to acceptance of Judge Mizelle's ruling may not be the public criticism of it, or even the possibility that the Eleventh Circuit may reverse her ruling.

The greatest danger to acceptance of Judge Mizelle's bizarre ruling is that  District Judges ruling in other jurisdictions may reject it.

For that matter, nothing prevents people living in the Middle District of Florida from filing suit to request declaratory relief of the Center for Disease Control and Prevention's (CDC's) mask-mandate-for-public-travel, either.

If jurisdiction and venue are proper in federal District Court in Tampa in this case, then jurisdiction and venue are proper in any federal District Court in the United States in a case like this.

Perhaps that will help put this case back in perspective.  "Just sayin'."

Please read the disclaimer.  ©2022 Dennis J. Wall.  All rights reserved.

TransUnion LLC v. Ramirez AND INSURER BAD FAITH CASES.

The U.S. Supreme Court rendered a decision in 2021 in a case involving a credit reporting agency, TransUnion LLC, and a putative class of 8,185 people which has implications for insurer bad faith cases.  The putative class in TransUnion LLC v. Ramirez[1] was composed of people who alleged that TransUnion had placed misleading alerts in their credit files at TransUnion to the effect that their names potentially matched the names of terrorists, drug traffickers, and others of like kind on a list kept by the Office of Foreign Assets Control (OFAC) at the U.S. Treasury Department.  The plaintiffs alleged that TransUnion thereby violated the Federal Fair Credit Reporting Act or FCRA.[2]

The ramifications of the holding in TransUnion LLC v. Ramirez for insurer bad faith cases are discussed in the forthcoming 2022 Supplement to 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:28.50, "Injury in Fact":  What Happens to Bad Faith Statutes? (West 3d Edition, 2022 Supplements in process).

Please read the disclaimer.  ©2022 Dennis J. Wall.  All rights reserved.

 

[1] TransUnion LLC v. Ramirez, ___ U.S. ___, 141 S. Ct. 2190 (2021)/

[2] 15 U.S.C. § 1684.

COLORADO GOES AGAINST THE GRAIN TO BAR ADJUSTER PERSONAL LIABILITY.

Colorado stands to the contrary of most jurisdictions that recognize a case for personal liability of insurance adjusters when claims under insurance policies are delayed or completely unpaid; Colorado does not recognize such personal liability.

Colorado's position comes because of a statute which prohibits unreasonable delay or denial of an insurance claim by "a person engaged in the business of insurance," Colo. Rev. Stat. § 10-3-1115 (2021), and under another statute which provides a cause of action for the unreasonable delay or denial of a claim for insurance benefits prohibited by the first statute.  Colo. Rev. Stat. § 10-3-1116 (2021).  The Colorado Supreme Court resolved this issue in its answer to a question certified from the United States District Court for the District of Colorado, in Skillett v. Allstate Fire & Cas. Ins. Co., 505 P.3d 664, ¶ 1, at p. 665 (Colo. 2022):

Specifically, the certified question asks:

Whether an employee of an insurance company who adjusts an insured's claim in the course of employment may for that reason be liable personally for statutory bad faith under Colorado Revised Statutes Sections 10-3-1115 and -1116 (“Statutes”).

Given the plain statutory language, we answer that question in the negative. An action for unreasonably delayed or denied insurance benefits under Colorado law may be brought against an insurer, not against an individual adjuster acting solely as an employee of the insurer.

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COVERAGE PROPERLY DENIED, BAD FAITH CLAIMS NECESSARILY DENIED AS WELL.

"Coverage having been properly denied, the plaintiffs' bad faith claims are necessarily denied as well."  Haisous, LLC v. State Auto Prop. & Cas. Ins. Co., Nos. 20 C 04286, 20 C 05017, 20 C 05021, and 21 C 01150, 2022 WL 999987, at *4 (N.D. Ill. March 31, 2022).

COVID-19 business coverage was at issue and was properly denied, this federal judge held in Illinois.  That follows a long line of similar holdings, as does the judge's pronouncement on the 'no coverage, no bad faith' issue.  Parenthetically, the above quotation is the Court's entire holding on the issue.

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EVERY CONTRACT'S IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING.

"Moreover, as this Court has explained many times, 'virtually every contract contains an implied covenant of good faith and fair dealing between the parties[.]'"   Houle v. Liberty Ins. Corp., ___ A.3d ___, No. 2021-30-Appeal (PC 16-4707), 2022 WL 945815, at *3 (R.I. March 30, 2022).

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FLORIDA CIVIL REMEDY NOTICE: SPECIFICITY GOOD, TMI BAD.

In Gooden v. People's Trust Ins. Co., ___ So. 3d ___,  No. 4D20-2760, 2022 WL 945507 (Fla. 4th DCA March 20, 2022), Florida's Fourth District Court of Appeal has decided that a Civil Remedy Notice quoting provisions of Florida's Bad Faith Statute, and provisions of Florida's version of the NAIC's Unfair Claim Settlement Practices Act, met the Bad Faith Statute's specificity requirements.  (The statute's specificity requirements as they existed at the time of Ms. Gooden's claim, and as they still exist now, are set out in Fla. Stat. § 624.155(3)(b).)

More to the point, the nine statutory provisions Ms. Gooden quoted in her CRN were relevant to her Bad Faith claim against People's Trust, and so was her invocation of just one of her insurance policy provisions.  As the Fourth District panel described the CRN:

Gooden's civil remedy notice cited nine statutory provisions and a single policy provision, listing only the statutory and policy provisions relevant to his [sic] allegations.

Gooden, 2022 WL 945507, at *1.  Further, Gooden's CRN explicitly stated what the carrier would need to do to cure its alleged bad faith. 

In the judgment of the Fourth District, this specificity distinguished Ms. Gooden's CRN from the CRN involved in Julien v. United Prop. & Cas. Co., 311 So. 3d 875 (Fla. 4th DCA 2021).  The Fourth District decided both cases, Gooden and Julien.

In the judgment of the trial court, in contrast, the Gooden CRN looked like the Julien CRN and so the trial judge dismissed Gooden's statutory bad faith claim for supposed failure "to meet section 624.155's specificity requirements."  As noted, the Fourth District had a different judgment, and so the Fourth District said, "We reverse."  Gooden, 2022 WL 945507, at *1.

The Julien case was the subject of commentary here first on October 15, 2020 when the decision was not yet officially released, and thereafter when released for publication in Westlaw, on March 10, 2021.

The various requirements for Civil Remedy Notices across the United States, including Florida, are examined in third-party cases in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:30, "Legal Bases of Liability in Settlement -- Statutory Requirement of Notice of Violation" (Thomson Reuters West 3d ed., 2022 Supps in process), and in first-party cases in id., Volume 2, § 9:21, "Common Law and Statutory Regulation of Civil Remedy Notice to Act in Good Faith."

            Defenses raised by failure to comply with CRN requirements are also discussed in third-party insurance bad faith actions in id., Volume 1, § 5:57, and in first-party insurance bad faith actions in id., Volume 2, § 11:24. 

Please read the disclaimer.  2022 Dennis J. Wall.  All rights reserved.

NO COVID COVERAGE, NO BAD FAITH CLAIM.

In Morningside Cafe Inc. v. Acuity Ins., No. 20-cv-05584, 2022 WL 952736 (N.D. Illinois March 30, 2022), a District Court followed the settled rule that where there is no insurance coverage, there can be no insurance bad faith claim.  In Morningside Cafe, the claims were made by a small business under its CGL (commercial general liability) policy for Covid-related damages, to no avail.

As the District Judge in the Northern District of Illinois explained:

    As explained above, the Policy's Business Income, Civil Authority, and Virus Exclusion provisions preclude coverage for Plaintiff's alleged business income losses. Because no coverage exists, Plaintiff has not alleged a plausible basis for its bad faith denial of insurance coverage claim. Accordingly, this claim must also be dismissed.

Morningside Cafe Inc. v. Acuity Insurance, 2022 WL 952736, at *6.

Please read the disclaimer.  ©2022 Dennis J. Wall.  All rights reserved.