This article continues an article begun here on July 3, 2023.
(Photo by Dennis Wall)
A further question which this new statute raises concerns the question of liability for bad faith by liability insurance companies in Florida generally.
This new statute is part of a Bad Faith Statute that applies to "any person … damaged" by certain alleged conduct of an insurance company.[1] However, despite its popular name, the so-called Bad Faith Statute, Fla. Stat. § 624.155, is not triggered by bad faith but by alleged violations of specified statutes and actions.
In fact, the term "bad faith" was never before used in the statute, although it did refer to "good faith" one time in its description of an insurance company's actions.[2]
This new, 2023 Section 624.155(4)(a) introduces a concept into third-party bad faith actions of damages less than policy limits, or it would make no sense to immunize a liability insurer from an "action for bad faith" when it pays less than policy limits. (Note that the statute is not yet officially published even as of today. The new language is accessible either on an unsecured web site as 2023 Florida Session Law Ch. 2023-15 which the reader can approach at her or his peril, or on a secure provider such as Westlaw or LexisNexis.) The cases and statutes collected in DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Company 3d Edition, 2023 Supplements in process), and in other treatises -- including cases and statutes from Florida -- establish the widely held view that there should be no bad-faith when damages are less than policy limits. That actually seems to have been the universally shared view in this nation, until the enactment of this new Florida Statute in 2023.
So this is a very big deal indeed.
[1] See Section 624.155(1): "Any person may bring a civil action against an insurer when such person is damaged[.]"
[2] See Section 624.155(1)(b)1 ("Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests") (emphasis added).
These and similar issues are addressed in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:28, Legal Bases of Liability in Settlement -- Statutory (West Publishing Company 3d Edition, 2023 Supplements in process).
This blog article ©2023 Dennis J. Wall.
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