Claims and Bad Faith Law Blog

DETERMINING FIRST-PARTY BAD FAITH CLAIMS IN FLORIDA: ...

   ... COMPLAINT OF STATUTORY BAD FAITH  SURVIVES MOTION TO DISMISS DESPITE "SCANT FACTUAL ALLEGATIONS," BECAUSE ATTACHED  CIVIL REMEDY NOTICE PROVIDES "SUFFICIENT SPECIFICITY" OF BAD FAITH SINKHOLE CLAIM HANDLING, FEDERAL COURT HOLDS.

    First-Party Bad Faith claims in Florida are only available by Statute, Fla. Stat. § 624.155.  A "Civil Remedy Notice" is a condition precedent to perfecting an action under the Florida Statute.   The Insurance Company Defendant argued that one of the grounds alleged for Bad Faith liability in an Amended Complaint "is devoid of facts identifying the basis of the [statutory] bad faith claim," and so should suffer dismissal, in Canales v. American Security Insurance Co., 2011 WL 5358753 *4 (M.D. Fla. November 7, 2011), Download Canales v. American Security Insurance Co. (M.D. Fla. Case No. 8.11cv789, Order Filed November 7, 2011) PUBLIC ACCESS.  (This is not usually anyone's preferred first line of defense to pleaded allegations, even in response to an Amended Complaint.  The Motion to Dismiss was successful in addressing other grounds alleged to expose the Defendant to liability for Bad Faith, but not this one, an alleged violation of Fla. Stat. § 626.9541(1)(i)(4), "which creates a cause of action against an insurer for failing to pay undisputed amounts within 90 days."  Id. at *4.)

    The Federal Court held in that case that although the Amended Complaint contained "scant factual allegations", two facts trumped the Defendant's Motion to Dismiss on the ground of lack of sufficiently specific allegations:  First, the Plaintiff attached a copy of his Civil Remedy Notice to his Amended Complaint, and second, the Florida Department of Financial Services had not rejected the CRN for lack of specificity.  How the Federal Court came to be aware of the facts evidencing the conduct of the Office of Insurance Regulation with reference to this CRN, is unknown from the opinion.  Parenthetically, the OIR, now located within the Florida Department of Financial Services, used to be the "department" referenced in the Statute when the OIR was known as the Florida Department of Insurance.

   In the words of the Federal Court in this case:

    The Florida DFS's acceptance of a CRN serves as evidence that the CRN has sufficient specificity to provide the insurer with notice of the violation and start the 60–day clock.  ["See" Citations Omitted.]  Because DFS accepted Canales' s CRN, the Court finds that the CRN provides a factual basis for the claims against ASIC sufficient to survive the Motion to Dismiss.

Id. at *4.  If only the OIR knew the tremendous responsibility it bore when it accepted that particular CRN.

  In fact, there is no reason to stop there.  The OIR should now know that it has the power to cure alleged pleadings defects simply by the expedient of accepting a Civil Remedy Notice of Statutory Bad Faith, or by instead rejecting a Civil Remedy Notice for alleged lack of specificity.

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Florida Civil Remedy Notice Does Not Require Evidence Pleading, Court Holds.

   In the case of Download Altheim v. GEICO General Ins. Co. (M.D. Fla. Order Filed January 18, 2011) PUBLIC ACCESS, also published as 2011 WL 161050 (M.D. Fla. January 18, 2011)(authorized password required to access Westlaw), GEICO argued a Motion for Summary Judgment based in part on an allegedly insufficient CRN or Civil Remedy Notice under Fla. Stat. § 624.155, Florida's Bad Faith Statute.  The Federal Judge denied GEICO's Motion for Summary Judgment in that case.

   The CRN in question apparently had one box checked on the Form supplied by the Florida Office of Insurance Regulation (Department of Insurance), followed by a few words of explanation.  The checked box was for "Unsatisfactory Settlement Offer".  Next to it was the explanation that GEICO allegedly "'has failed to attempt to resolve this claim despite evidence that the claim exceeds the available coverage.'"  Id. at *4.  (The claim at issue with GEICO was an Uninsured Motorist claim for which there had previously been a demand for GEICO's UM Policy Limits.)  GEICO raised an issue that "this allegation in the CRN" was insufficiently specific to allow GEICO in essence to cure the alleged bad faith behavior.  The Federal Court rejected this argument, and denied GEICO's Motion for Summary Judgment in this regard, ruling:

   A fair reading of the CRN gives Defendant notice of the specific wrongful conduct at issue -- Defendant's failure to settle Plaintiff's claim due to an unsatisfactory settlement offer.  Furthermore, common sense suggests that the action Defendant could have taken to cure the alleged violation would be to increase the amount offered to settle Plaintiff's claim.  Plaintiff is not required to delineate in the CRN the specific amount necessary to settle her claim.  [Citations omitted.]  Additionally, the Court notes that there is no evidence before the Court that the Department of Insurance returned the notice for lack of specificity.

Id.  [Emphasis added.]

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