Hunton Insurance Recovery Blog

On Thursday, Florida’s highest court held that prior to litigating a first-party bad faith action arising from an uninsured/underinsured motorist (“UM”) case, an insured is entitled to a jury determination of liability and the full extent of potentially recoverable damages, even if in excess of policy limits.  Fridman v. Safeco Ins. Co. of Illinois, No. SC13-1607 (Fla. Feb. 25, 2016).  And, such a determination is binding on the insurer in the subsequent bad faith action so long as the parties had an opportunity for appellate review of any trial errors.

The ruling is premised on Florida’s requirement that the insured’s liability and the full extent of potential damages be determined in order to state a claim for bad faith.  Applying that rule, the Supreme Court rejected Safeco’s argument and reversed  the Fifth District Court of Appeal, finding that liability and the extent of damages need not be deferred to the subsequent bad faith case. The Court also clarified that the UM trial court may reserve jurisdiction to allow an insured to formally amend his complaint to add a claim for bad faith at the conclusion of the UM proceedings.