Marily Hernandez v. Westchester Surplus Lines Insurance Company

Fort Myers, Florida insurance lawyers represented the Plaintiff who sued on a bad faith breach of insurance contract theory.



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Florida Bad Faith Insurance Law: Summary

In Florida, an insurance company can be held liable for "bad faith" when it fails to act in good faith towards its insured in handling a claim. This means the insurer doesn't meet its legal or contractual obligations, often through intentional dishonesty or unfair actions. Bad faith actions can expose the insurer to damages exceeding policy limits.

Types of Bad Faith Claims:



First-Party Bad Faith: Occurs when an insured (the policyholder) sues their insurer for mishandling their own claim (e.g., denying or delaying payment of their own claim). Examples include unreasonable claim denials, delays in payment, and inadequate investigation of a valid claim.

Third-Party Bad Faith: Arises when an insurer fails to settle a third party's claim against the insured within policy limits, exposing the insured to liability exceeding their coverage.



How Bad Faith is Defined and Proven:



Florida Statute 624.155: This statute defines bad faith as the insurer's failure to settle a claim in good faith, considering all circumstances, when they could and should have done so. This includes actions that demonstrate a lack of regard for the insured's interests.

Totality of the Circumstances: Courts evaluate the insurer's actions under this standard, considering factors like promptness of action, harm to the policyholder, diligent investigation, and efforts to settle.

Proof: To prove bad faith, one must demonstrate the insurer violated the terms of the insurance contract or Florida law, and that they could have and should have approved the claim if they acted honestly and fairly. Evidence might include misrepresentation of facts, failure to investigate, or unreasonable delays.



Key Aspects of Florida's Bad Faith Law:



Civil Remedy Notice (CRN): Before filing a bad faith lawsuit, a 60-day written notice must be given to the insurer and the Department of Financial Services (DFS). This allows the insurer an opportunity to resolve the issue.

Common Law vs. Statutory Law: While first-party claims are primarily statutory under Florida Statute 624.155, third-party claims can be pursued under both common law and the statute.

HB 837 (2023): This legislation made significant changes to Florida's bad faith laws, including clarifying that negligence alone isn't sufficient for a bad faith claim and allowing the consideration of the claimant's conduct. It also provides immunity to insurers who tender the lesser of policy limits or the claimant's demand within 90 days.

Damages: If bad faith is proven, a policyholder may be able to recover:

The value of the initial claim.

Court costs and other losses resulting from the insurer's bad faith actions.

Emotional distress damages.

Punitive damages (if the insurer's actions are willful, malicious, or part of a general business practice).



Important Note: Seeking legal counsel from an experienced attorney is crucial when pursuing a bad faith insurance claim in Florida due to the complexity of the legal framework and procedure

Plaintiff has filed a Notice of Voluntary Dismissal with Prejudice. (Doc. 27). Per this Court's prior Order (Doc. 25), this case has already been dismissed with prejudice. In any event, Plaintiff's Notice of Voluntary Dismissal seeks dismissal under Florida Rule of Civil Procedure 1.420(a)(1), but this case is subject to the Federal Rules of Civil Procedure. Federal Rule of Civil Procedure 41 provides that a plaintiff may dismiss an action without a court order by filing "a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment." Fed. R. Civ. P. 41(a)(1)(A)(i) (emphasis added). Because an answer has been filed (see Doc. 11), a voluntary dismissal without court order may only be effected via "a stipulation of dismissal signed by all parties who have appeared." Fed. R. Civ. P. 41(a)(1)(A)(ii). Accordingly, the Clerk of Court is DIRECTED to STRIKE Plaintiff's Notice (Doc. 27) and add a notation to the docket text stating that the document was stricken by this Order. Again, this case has already been dismissed with prejudice per the Court's prior Order. (Doc. 25). Signed by Judge John L. Badalamenti on 6/18/2025. (ACG) (Entered: 06/18/2025)