A federal district court in Florida has affirmed that Florida law does not recognize common-law first-party bad faith claims against insurance companies.
The Case
After a mistrial was granted in Alison Swanson's lawsuit against her insurer, State Farm Mutual Automobile Insurance Company, in which she alleged an improper denial of benefits, she filed another action against State Farm, asserting a single claim for what she described as “the willful tort of bad faith.”
State Farm moved to dismiss, contending that Florida does not recognize such a tort in the context of a first-party insurance case.
The District Court's Decision
The court granted State Farm's motion.
In is decision, the district court explained that Florida law recognizes two types of actions for bad faith against insurance companies: first party and third party. The court said that a first-party action is one brought directly by an insured against the insured's own insurance company for failing to promptly pay benefits due under the policy and that a third-party action is brought by a noninsured against the insurer of another, often a tortfeasor.
Florida law, the court continued, has long recognized common-law claims for bad faith in third-party actions. In the first-party context, plaintiffs may assert a statutory bad faith claim against their insurers pursuant to Fla. Stat. § 624.155, the court noted.
The court then pointed out that Ms. Swanson was attempting to assert a common-law bad-faith claim rather than proceeding under the statute, and it agreed with State Farm that Florida law does not recognize such claims in a first-party case.
The court was not persuaded by Ms. Swanson's contention that Florida law recognizes such a claim where the insurer's actions were “so egregious and so outrageous” that it elevated what ordinarily was a simple bad faith action under Section 624.155 “into an independent, willful tort action.” The court said that, setting aside the issue of whether State Farm's alleged conduct rose to this level, Ms. Swanson was “incorrect.” The Florida Supreme Court “has repeatedly held that the state has never recognized such a cause of action,” the court added.
The court concluded that Ms. Swanson had no response to the Florida Supreme Court's pronouncements that “no common law first-party bad faith claims” were permitted under Florida law and had not cited a single case in which a court permitted an insured to proceed with a such a claim under Florida law.
The case is Swanson v. State Farm Mutual Automobile Ins. Co., No: 6:19-cv-422-Orl-31DCI (M.D. Fla. April 22, 2019). Attorneys involved include: For Alison Swanson, individually, Plaintiff: Eric H. Faddis, Tiffany M. Faddis, W. Riley Allen, LEAD ATTORNEYS, Faddis & Faddis, PA, Orlando, FL; Lawrence H. Hornsby , Jr., LEAD ATTORNEY, Hornsby Law Group, Winter Park, FL. For State Farm Mutual Automobile Insurance Company, a foreign-for-profit corporation, Defendant: John W Weihmuller, LEAD ATTORNEY, James Michael Shaw , Jr., Butler Weihmuller Katz Craig LLP, Tampa, FL.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].