Tuesday, June 1, 2010

Venue Was Proper In County Where The Insurer Failed To Act

In American Vehicle Insurance Company v. Goheagan (4D09-3222), the Fourth District affirmed the trial court's order denying a motion to transfer venue.  The facts of the underlying action were described as follows:
The underlying litigation arose from a car accident in Palm Beach County involving AVIC’s insured, John Perkins, a Palm Beach County resident, and Molly Swaby. Swaby died in Palm Beach County as a result of the accident, and her Estate was opened in Palm Beach County. Perkins’s policy was issued for delivery to him in Palm Beach County and provided liability insurance limits of $10,000 per person and $20,000 per accident. Olive Goheagan, as Personal Representative of the Estate of Molly Swaby, filed a negligence action against Perkins in Palm Beach County. The trial resulted in a final judgment against Perkins for $2,792,893.65. Thereafter, Perkins assigned all of his claims against AVIC to the Estate.
The insurer was sued in Palm Beach County for bad faith.  Thereafter, the insurer moved to dismiss and/or transfer venue to Broward County because the insurer did not maintain an office in Palm Beach County. 
AVIC filed its motion to dismiss or transfer venue pursuant to section 47.051, Florida Statutes (2008), which provides that “[a]ctions against domestic corporations shall be brought only in the county where such corporation has, or usually keeps, an office for transaction of its customary business, where the cause of action accrued, or where the property in litigation is located.” Here, it is undisputed that AVIC does not have an office in Palm Beach County and there is no property in litigation. Thus, the issue is whether the cause of action accrued in Palm Beach County or Broward County.
In Florida a bad faith claim is an action ex contractu....When bad faith is alleged, “the cause is one for breach of a contractual obligation implied in law, namely good faith.”....Further, “‘[a] cause of action on a contract accrues for venue purposes where the breach of that contract occurs, and if a contract involves performance, the breach occurs where the defaulting party fails to perform an act that it has agreed to do.’”
The court held:
AVIC’s breach of its contractual obligation occurred when it allegedly failed to exercise its duties of good faith; its duties should have been performed in Palm Beach County. As explained in Ivey, a cause of action accrues where services “were to have been, but were not, performed.” 502 So. 2d at 23 (citing Windsor, 399 So. 2d 65). These duties included making a settlement offer and/or tendering the policy limits to the Estate, which was opened in Palm Beach County; investigating and evaluating the claim, when the accident occurred in Palm Beach County; and advising and warning Perkins, who resided in Palm Beach County, of possible outcomes, risks, and consequences.


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