In U.S. Sugar Corp. v. Commerce & Indus. Ins. Co., No. 22-21737-Civ-Scola, 2024 WL 5040843 (S.D. Fla. Dec. 9, 2024), United States Sugar Corporation, a policyholder of Commerce and Industry Insurance Co., sued Commerce under various claims for insurer bad faith. U.S. Sugar alleged that Commerce did not pay it, “as agreed under an insurance policy, defense expenses related to a putative class action concerning the Plaintiff’s pre-harvest sugarcane burning[.]” U.S. Sugar, 2024 WL 5040843, at *1.
The Federal District Judge held that U.S. Sugar’s claims for reimbursement of covered defense expenses under its policy with Commerce were “first-party” claims. As a result, the Court dismissed U.S. Sugar’s claims of common law bad faith with prejudice, because there is no common law of first-party bad faith under Florida law. U.S. Sugar, 2024 WL 5040843, at *8.
A working definition of “first-party” insurance is the subject of § 9:1 in Volume 2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (Thomson Reuters West 3d Edition & 2024 Supplements).
The United States Sugar case decided other issues worth our attention, and these issues will be addressed in future articles in this space.
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