Sunday, October 18, 2009

Third District Rules On Ripeness Of Bad Faith Claim

In State Farm Florida Insurance Company v. Seville Place Condominium Association, Inc. (3D08-2358), the Third District denied State Farm's petition for certiorari seeking to quash the trial court's order allowing a bad faith claim to proceed prior to the conclusion of the appeal of the underlying insurance claim.  The court stated "State Farm’s amended petition and the Association’s response require us to evaluate the ripeness of bad faith claims when contractual appraisal provisions have been invoked and coverage has been determined or admitted."

The panel's decision, written by Judge Salter and joined by Chief Judge Ramirez, stated:
We deny the writ, finding that the trial court correctly found that: (1) the insurer’s liability to the Association had already been determined; (2) an appraisal, though aggressively attacked by State Farm, had been completed and confirmed by the court; and, therefore, (3) the conditions precedent for amendment to add a bad faith claim were met. We reject State Farm’s argument that the prosecution of such a claim must be abated until the insurer has been permitted to appeal the liability and appraisal decisions and exhaust all appellate remedies relating to those issues.
It is well settled that a statutory first-party bad faith action is premature until two conditions have been satisfied: (1) the insurer raises no defense which would defeat coverage (an issue for the judicial process rather than the appraisal process), or any such defense has been adjudicated adversely to the insurer; and, (2) the actual extent of the insured’s loss must have been determined.
Judge Shepherd dissented from the panel's decision.  Judge Shepherd stated:
Today’s decision is in direct conflict with two recent decisions of this Court, see N. Pointe Ins. Co. v. Tomas, 999 So. 2d 728 (Fla. 3d DCA 2008) (N. Pointe Ins. Co. I);  XL Specialty Ins. Co. v. Skystream, Inc., 988 So. 2d 96 (Fla. 3d DCA 2008), and is contrary to carefully-developed, long-standing precedents that have emanated from our high court for almost the last two decades. See Vest v. Travelers Ins. Co., 753 So. 2d 1270 (Fla. 2000); Imhof v. Nationwide Mut. Ins. Co., 643 So. 2d 617 (Fla. 1994), receded from on other grounds by State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So. 2d 55, 63 (Fla. 1995); Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So. 2d 1289 (Fla. 1991).
The North Pointe Insurance Co. case, identical to the one before us, is an appraisal case. However, in sharp contrast to our case...this Court, just ten months ago, granted certiorari and quashed an order authorizing first-party insureds to prosecute a bad faith claim against their insurer, North Pointe Insurance Company, before judgment, where the company had conceded all defenses to coverage and actually paid the amount of the appraisal award to its insured, leaving only a determination of the amount of pre-judgment interest and entry of judgment. N. Pointe Ins. Co. I, 999 So. 2d at 729...Just days ago, we affirmed the trial court’s final order confirming the appraisal award and awarding pre-judgment interest, N. Pointe Ins. Co. v. Tomas, No. 3D08-2245, 2009 WL 2601700, at *1 (Fla. 3d DCA Aug. 26, 2009) (N. Pointe Ins. Co. II), thus fulfilling the condition of our abatement and freeing the Tomas to proceed with their bad faith action. N. Pointe Ins. Co. I, 999 So. 2d at 729. We should follow our own precedent. See Tyson v. Mattair, 8 Fla. 107, at *8 (1858) (“[S]tare decisis[] is a first principle in the administration of justice—it is one of the most sacred in law.”).
Judge Shepherd raises a number of additional arguments in response to the panel's opinion that can be found in the opinion

Presumably, State Farm will seek rehearing en banc relying upon the conflict Judge Shepherd wrote about.  Based upon Judge Shepherd's interpretation of both N. Pointe Ins. Co. v. Tomas, 999 So. 2d 728 (Fla. 3d DCA 2008) and XL Specialty Ins. Co. v. Skystream, Inc., 988 So. 2d 96 (Fla. 3d DCA 2008),  it seems likely the Judges on the panels in those cases, Judge SuarezJudge Cope, Judge Rothenberg, Judge CortiƱas, and Judge Schwartz would at least be interested in the en banc request. 


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