bad faith failure to settle in Florida

2026Ins., 259 So. 3d 1, 7 (Fla. 2018) ("[T]he focus in a bad faith case is not on the actions of the claimant but rather on those of the insurer in fulfilling its 12 obligations to the insured." (emphasis added) (quoting Berges v. Infinity Ins., 896 So. 2d 665, 677 (Fla. 2004))); Moultrop v. GEICO Gen.

2025We are mindful that "the focus in a bad faith case is not on the actions of the claimant but rather on those of the insurer in fulfilling its obligations to the insured." Harvey, 259 So. 3d at 7 (quoting Berges, 896 So. 2d at 677 ).

2018The third party then sued the insurance company for bad faith, alleging failure to settle "when [the insurance company] had the opportunity." Id. at 784-85 .

2018We have jurisdiction based on the Fourth District's misapplication of our bad faith precedent as set forth in Boston Old Colony Insurance Co. v. Gutierrez , 386 So.2d 783 (Fla. 1980), and, more recently, in Berges v. Infinity Insurance Co. , 896 So.2d 665 (Fla. 2004). 1 For the reasons that follow, we conclude that the Fourth District erred in holding that the evidence was insufficient to show that the insurer acted in bad faith in failing to settle the insured's claim.

2018State Farm moved to dismiss the complaint, relying on Blanchard v. State Farm Mutual Automobile Insurance Co., 575 So. 2d 1289, 1291 (Fla. 1991), which held that “an insured’s underlying first-party action for insurance benefits against the insurer necessarily must be resolved favorably to the insured before the cause of action for bad faith in settlement negotiations can accrue.” State Farm argued that before a bad faith claim could be asserted, the Demases were required to obtain an appraisal award, an arbitration award, or a judgment in an underlying breach of contract case, which they did

2016As this Court made clear in Blanchard , “[ajbsent a determination of the existence of liability on the part of the uninsured tortfeasor and the extent of the plaintiff’s damages, a cause of action cannot exist for a bad faith failure to settle.” Id. (emphasis added).

2026Because a determination of the full extent of the insured’s damages is one of the prerequisites to a bad faith cause of action, to preclude a UM verdict in excess of the policy limits from being used in the bad faith case would force the parties to relitigate the issue of damages a second time prior to the bad faith trial. … If the amount of the UM verdict is not binding as an element of damages in the bad faith litigation, it would allow the insurer—or the insured, if the verdict were less than anticipated—a second bite at the proverbial apple. … Id. at 1224-25.

2026Co. of Ill., 185 So. 3d 1214, 1230 (Fla. 2016) ("[A]n insured is entitled to a jury determination of liability and the full extent of his or her damages, which may be in excess of the policy limits, in the underlying UM case, prior to litigating a first-party bad faith cause of action."); Allstate Indem.

2008Co. of N.Y., 250 So.2d 259, 264 (Fla.1971) (holding "that a judgment creditor may maintain suit directly against [the] tortfeasor's liability insurer for recovery of the judgment in excess of the policy limits, based upon the alleged fraud or bad faith of the insurer in the conduct or handling of the suit"); Kelly, 411 So.2d at 905 (Cowart, J., dissenting)).

2008As explained by this Court in Cope , "[t]he essence of a `bad faith' insurance suit (whether it is brought by the insured or by the injured party standing in his place), is that the insurer breached its duty to its insured by failing to properly or promptly defend the claim ... all of which results in the insured being exposed to an excess judgment." Cope, 462 So.2d at 460 (quoting Kelly v. Williams, 411 So.2d 902, 904 (Fla. 5th DCA 1982)).

2007In addition to our holding in Rogers, Shuster makes it clear that higher insurance premiums and damages to the insured's reputation are not examples of bad faith by the carrier in settlement of the covered claim within policy limits. 591 So.2d at 177 (concluding " in contrast to the right to settle a claim within the policy *1155 limits without considering the impact of higher premiums or damage to the insured's reputation, we do not believe the language of the contract would indicate nor do we believe it would have been the intent of the parties, that the insured give up his or her right to a

2007The bad faith exception left open by the statute is for the exceedingly rare instance when the settlement "defeats the very purpose for which the policy was procured." Shuster, 591 So.2d at 177 .

2026Ins., 584 So. 2d 12, 14 (Fla. 3d DCA 1991) (noting in a bad faith action that it is the insurer's burden to show "that there was no realistic possibility of settlement within policy limits").5 Because it was Progressive and not Kesler who put her willingness to settle at issue, Kesler has not waived her attorney-client privilege, and Catledge was free to invoke it on Kesler's behalf at deposition.6 See § 90.502(3)(e).

2024Co., 896 So. 2d 665 , 676-77 (Fla. 2004) (holding that insurer’s agreement to tender policy limits before offer expired did not insulate insurer from bad faith, where insurer had not actually tendered policy limits within that time); Powell, 584 So. 2d at 14 (holding that bad-faith claim was not precluded where insurer tendered policy limits, because insurer had not responded to settlement offer for over sixty days and after lawsuit had been filed, which jury could find unreasonable).

2008As explained by this Court in Cope , "[t]he essence of a `bad faith' insurance suit (whether it is brought by the insured or by the injured party standing in his place), is that the insurer breached its duty to its insured by failing to properly or promptly defend the claim ... all of which results in the insured being exposed to an excess judgment." Cope, 462 So.2d at 460 (quoting Kelly v. Williams, 411 So.2d 902, 904 (Fla. 5th DCA 1982)).

2008V, § 3(b)(6), Fla. Const. For the reasons explained below, we provide the following three answers to the issues raised by the certified questions: (1) a settlement agreement between two parties that explicitly contains both an assignment of causes of action against a third party insurer and an immediate release of the insured on the same causes of action is valid and not barred by our opinion in Fidelity & Casualty Co. of New York v. Cope, 462 So.2d 459 (Fla.1985); (2) the claim for breach of fiduciary duty arising from the relationship between the insurance broker and the insured involving al

2018See Campbell, 306 So. 2d at 530 (noting that the “standard[] for determining liability in an excess judgment case is bad faith rather than negligence”); see also Auto Mut.

2018See Campbell , 306 So.2d at 530 (noting that the "standard[ ] for determining liability in an excess judgment case is bad faith rather than negligence"); see also Auto Mut.

2026As Cunningham recognized, “the essence of a third-party bad-faith cause of action is to remedy a situation in which an insured is exposed to an excess judgment because of the insurer’s failure to properly or promptly defend the claim.” 630 So. 2d at 181 (emphasis added).

2026Co., 630 So. 2d 179, 181 (Fla. 1994) (“Under ordinary circumstances, a third party must obtain a judgment against the insured in excess of the policy limits before 12 prosecuting a bad-faith claim against the insured’s liability carrier.”) (emphasis added).

2018Though the Eleventh Circuit cherry-picked a single clause from this Court’s opinion Laforet in which we addressed the narrow issue of the validity “of retroactively applying a penalty to insurance companies for bad faith conduct in failing to settle uninsured motorist claims,” 658 So. 2d at 56 , it failed to consider our opinion in Boston Old Colony, where we made clear that there is far more to the bad faith inquiry than whether the insurer acted in its own interest.

2018Though the Eleventh Circuit cherry-picked a single clause *8 from this Court's opinion Laforet in which we addressed the narrow issue of the validity "of retroactively applying a penalty to insurance companies for bad faith conduct in failing to settle uninsured motorist claims," 658 So.2d at 56 , it failed to consider our opinion in Boston Old Colony , where we made clear that there is far more to the bad faith inquiry than whether the insurer acted in its own interest.

2007Dunn specifically stated that this result was merited "because the injured party `stands in the shoes' of the insured party in a third party bad faith case." 631 So.2d at 1109 .

2004Co. , 631 So.2d 1103 , 1106 (Fla. 5th DCA 1993) (emphasis added). 13 Thus, the jury was instructed in this case as follows: An insurance company acts in bad faith in failing to settle the claim against its insured within its policy limits when under all the circumstances it could and should have done so had it acted fairly and honestly towards its insured and with due regard for his or her interest.

2024A. Entitlement to Bad Faith Attorney Fees and Costs “A trial judge’s decision to impose sanctions for bad faith litigation conduct is reviewed under an abuse of discretion standard.” Bennett v. Berges, 50 So. 3d 1154, 1159 (Fla. 4th DCA 2010) (citation omitted).

2022See Cousins v. Duprey, 325 So. 3d 61 , 75 (Fla. 4th DCA 2021) (reversing where the sanctions award was not “directly related to the alleged sanctionable conduct”); Bennett v. Berges, 50 So. 3d 1154, 1160 (Fla. 4th DCA 2010) (reversing where “the trial court awarded fees that were not directly related to the specific bad faith conduct of appellants”); Finol v. Finol, 912 So. 2d 627, 629 (Fla. 4th DCA 2005) (granting petition for certiorari where “[t]he record and the order also fail to show how the fees awarded directly relate to the fees incurred as a result of the alleged bad faith conduct”);

2008Co. of N.Y., 250 So.2d 259, 264 (Fla.1971) (holding "that a judgment creditor may maintain suit directly against [the] tortfeasor's liability insurer for recovery of the judgment in excess of the policy limits, based upon the alleged fraud or bad faith of the insurer in the conduct or handling of the suit"); Kelly, 411 So.2d at 905 (Cowart, J., dissenting)).

1999Co., 250 So.2d 259 (Fla.1971) (right of judgment creditor to maintain a direct action for bad faith against tortfeasor's liability carrier for recovery of the unpaid balance of a judgment in excess of policy limits recognized); Williams v. Union National Ins.

2016See id. at 1126 . .Consequently,,first-party .bad faith claims under section 624.155 should be treated in the same manner as third-party bad faith claims. 3 Importantly, in both first- and third-party bad faith actions, an element , of damages includes any amount in excess, of the policy limits.

2014Important to our consideration of this case, the Ruiz decision moved away from past case law distinguishing first- and third-party bad faith actions, explaining that the enactment of section 624.155, “created a statutory first-party bad faith cause of action for first-party insureds” that “ushered out the distinction between first- and third-party statutory claims for the purposes of initiating bad faith actions.” Id.

2025Put differently, "the existence of a causal connection is a prerequisite" in a third-party bad faith case, and "there must be a causal connection between the damages claimed and the insurer's bad faith." Perera, 35 So. 3d at 901, 902 . 7 Given this precedent, the estate acknowledges that causation is an element of a bad faith claim.

2025However, "[t]he damages claimed by an insured [or its assignee] in a bad faith case 'must be caused by the insurer's bad faith.' " Harvey, 259 So. 3d at 7 (quoting Perera, 35 So. 3d at 902 ).

2022Co., 691 So. 2d 1095, 1096-97 (Fla. 4th DCA 1997) (affirming summary judgment for the insurer because the depositions and documents “show[ed] beyond any doubt that the primary insurer at no time missed an opportunity to settle which would have put it in a bad faith posture”); Clauss v. Fortune Ins.

2012Co., 691 So.2d 1095, 1096 (Fla. 4th DCA 1997) (finding that facts showed “beyond any doubt that the primary insurer at no time missed an opportunity to settle which would have put it in a bad faith posture”); Clauss, 523 So.2d at 1178 (finding no bad faith as a matter of law where there was one month between initial demand for policy limits and notice of bad-faith failure to settle, and insurer “expressed its willingness to tender the policy limits, but desired verification”); Caldwell v. Allstate Ins.

2026Ins., 259 So. 3d 1, 7 (Fla. 2018) ("[T]he focus in a bad faith case is not on the actions of the claimant but rather on those of the insurer in fulfilling its 12 obligations to the insured." (emphasis added) (quoting Berges v. Infinity Ins., 896 So. 2d 665, 677 (Fla. 2004))); Moultrop v. GEICO Gen.

2025However, "[t]he damages claimed by an insured [or its assignee] in a bad faith case 'must be caused by the insurer's bad faith.' " Harvey, 259 So. 3d at 7 (quoting Perera, 35 So. 3d at 902 ).

2022Co., 453 So. 2d 1187, 1190-91 (Fla. 4D20-393, 2021 WL 3891004 , at *3 n.3 (Fla. 4th DCA Sept. 1, 2021).

1991In Caldwell v. Allstate Insurance Co., 453 So.2d 1187 (Fla. 1st DCA 1984) the First District suggested that, because the proof and available defenses under contract and bad faith theories differ substantially, either remedy may be available to recover an excess judgment where there is a refusal to defend.

2014Co., 326 So.2d 241, 243 (Fla. 3d DCA 1976) (citing Boston Old Colony, and holding plaintiff in third-party bad faith action against insurance company for failure to settle claim for policy limits is entitled to entire litigation file of insured’s counsel from inception of lawsuit until date that judgment was entered in underlying action since plaintiff judgment creditor stands in same posture as insured).

2007Co., 326 So.2d 241 (Fla. 3d DCA 1976) (noting that insurance company involved in bad faith lawsuit brought by third-party judgment creditor "concede[d]" that the contents of its personal injury case file "[were] not subject" to any privilege other than possibly work product privilege, citing Boston Old Colony ).

2016This Court concluded—in spite of the emphasized portion of the statute above—that an insured could not recover the amount of the excess judgment as an element of damages in a first-party bad faith claim, and instead could recover only those damages that were the “natural, proximate, probable, or direct consequence of the insurer’s bad faith actions.” Id.

2016This Court concluded — in spite of the emphasized portion of the statute above — that an insured could not recover the amount of the excess judgment as an element of damages in a first-party bad faith claim, and instead could recover only those damages that were the “natural, proximate, probable, or direct consequence of the insurer’s bad faith actions.” Id.

2014Id. at 417; see also 620 So.2d at 1142 (“[W]e find that the trial court correctly ruled that Aqua Jet had the right to obtain Kubicki Draper’s litigation files where the attorney-client and work product privileges do not preclude production of the files in a third party bad faith context.”); Stone v. Travelers Ins.

1999The First District denied the petition, citing Dunn v. National Security Fire & Casualty Co., 631 So.2d 1103, 1109 (Fla. 5th DCA 1993), and Continental Casualty Co. v. Aqua Jet Filter Systems, Inc., 620 So.2d 1141, 1142 (Fla. 3d DCA 1993), for the proposition that a third party in a third-party bad-faith action stands in the shoes of the insured and thus is entitled to discover the insurer's entire claim file for the underlying tort up to the date of an excess judgment, notwithstanding objections based on attorney-client or work-product privileges.

2014Whether a defense attorney retained to represent the insured and the insurer could be deposed and required to produce his file in a subsequent bad faith action brought by the injured party without an assignment from the insured was first considered in Boston Old Colony Insurance Co. v. Gutierrez, 325 So.2d 416, 416 (Fla. 3d DCA 1976).

2005As was first explained by the Third District Court in Boston Old Colony Insurance v. Gutierrez, 325 So.2d 416, 417 (Fla. 3d DCA 1976), the reason an insurer's file is discoverable by a third party (such as Day) in a bad faith case is that after the plaintiff obtains a judgment and becomes a judgment creditor, he steps into the shoes of the insured.

1985American Fire and Casualty Co. v. Davis, 146 So.2d 615 (Fla. 1st DCA 1962).

1975Then in American Fire & Casulaty Co. v. Davis, 146 So.2d 615 (Fla.App. 1st 1962), it was held that an insured could sue his own insurer for "bad faith failure to settle," resulting in an excess verdict against the insured, despite the fact that the insured had not satisfied the excess judgment, the First District reasoning that payment of the excess verdict was not a prerequisite to institution of the action and that the effect of the excess judgment on the insured's credit rating was sufficient damage to justify proceeding with the cause.