For the second straight term, a bill has been filed in the Florida Legislature designed to make changes to the well-settled legal principles that have successfully governed our state for many years and have held insurance carriers accountable when they act improperly.
Continue Reading...On September 12, 2011, in Customary Discovery Practices May Vary Greatly Between Federal And State Courts, I discussed how the Federal Middle District Court of Florida resolved a discovery dispute between Nationwide and Pepperwood of Naples Condominium Association. Recently, the Court decided another discovery dispute between the parties. This one involved Nationwide’s claim of attorney-client privilege and work product protection to some document requests. Such claims of privilege are common in litigation. The resolution of these disputes can play a very important role in the information that the policyholder can obtain to support its claims, especially in a bad faith case.
Continue Reading...The issue of whether Florida’s legislative-created insurer, Citizens Property Insurance Corporation, is, or should be, subject to damages for bad faith claims handling practices has been heavily debated by industry professionals during the last several years. Debbie Moroy, of ClaimSmentor, recently posted a comment to request an update on the Citizens Property Insurance Corporation v. San Perdido Association, Inc. case. In my Property Insurance coverage Law Blog post from October 18, 2010, titled Bad Faith Lawsuit Allowed to Proceed to Trial Against Citizens Property Insurance Corporation, I discussed an interesting turn of events on this issue. At that time, the First District Court of Appeal rejected Citizens’ request to stop a bad faith action against it from proceeding in the trial court.
Continue Reading...As I have discussed in the past, some insurers attempt to avoid bad faith actions by arguing that the current law requires a judicial determination that the insurer breached the contract as a prerequisite to liability. Simply by participating in the appraisal process, these carriers believe that they somehow have immunity for any previous actions that delayed a claim.
Continue Reading...A hotly contested issue in all bad faith cases is the proper scope of discovery that a policyholder may obtain. As I discussed in Florida Southern District Court Upholds Condominium Association’s Right To Bad Faith Discovery:
Continue Reading...For condominium associations in particular, many times attorneys become involved in an insurance claim from the very beginning. In many instances, the independent or insurance adjuster is moved to the side early in the process and replaced by the insurer’s attorney, who ends up directing the adjustment and making the final determination of coverage.
For many years, insurers have claimed that all of the work that these attorneys performed in the adjustment of the claim was privileged because of the work product and attorney-client privilege. When insurers acted in bad faith by denying valid claims, the insurer could refuse to produce relevant documents which reflected this improper behavior during the bad faith litigation.
Fortunately, Florida courts caught on to this tactic and have stopped the insurer’s attempts to improperly hide its bad faith conduct by invoking attorney-client and work product privilege on materials in the claim file.
The Florida Supreme Court’s ruling in Allstate Indemnity Co. v. Ruiz, 899 So. 2d 1121 (Fla. 2005) set the precedent in preventing insurer’s from concealing bad faith activities with claims of privilege. Specifically, Ruiz overruled previous case law and found that work product documents created in the breach of contract action were part of the claim file and must be turned over in subsequent bad faith litigation.
Every disagreement between a policyholder and its insurer is not necessarily due to bad faith on the insurer’s part. Many claims are settled promptly, fully, and fairly. That said, there are also instances where an insurer and its adjusters and representatives do not adjust and settle a claim with the policyholder’s best interests at heart. This is when bad faith allegations come into play.
Continue Reading...Yesterday, Chip Merlin wrote on the Property Insurance Coverage Law blog about a recent Order I received. The ruling dealt with the conditions precedent to filing a bad faith case in the State of Florida. As I have discussed before, first party bad faith in Florida has traditionally centered around Florida Statute §624.155 and not a common law right.
Continue Reading...As I discussed in a previous post, What Is Bad Faith And What Can Be Done About It, most states, including Florida, recognize that every contract contains an inherent obligation that each party will perform with the utmost good faith and fair dealing. While insurance policies may not seem like typical contracts, they are. Therefore, when an insurer performs its contractual duties, i.e., adjusting a loss and making a coverage determination, it has a common law contractual obligation to perform in good faith.
Continue Reading...In Florida, the work of adjusting insurance claims engages the public trust. Policyholders, both commercial and residential, are generally not very sophisticated in insurance issues and therefore must rely on their insurance company to fairly and honestly adjust losses and timely pay the amounts due under the policy.
Continue Reading...In Florida, discovery in breach of contract actions usually centers around the mystical “claim file” which insurers guard more closely than their first born child. As most who read this blog already know, the “claim file” has been held to be generally protected by Florida courts, and usually undiscoverable in a breach of contract action.
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