For policyholders, the question often arises, “at what point is my insurance carrier acting in bad faith and what can I do about it?”
Black’s Law defines Bad Faith as “The opposite of ‘Good Faith,’ generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one’s rights or duties, but by some interested or sinister motive.” Simply put, an insurer is supposed to act in Good Faith when investigating your insurance claim. The insurer is acting in Bad Faith when they fail to properly investigate your loss, delay the resolution of your claim and/or intentionally proceed to intentionally underpay or deny your claim for illegitimate reasons.
The path to pursuing Bad Faith allegations against an insurance company is relatively technical, though formulaic. Essentially, at some point, either during the claim process or afterward, an insured or his/ her representative must submit a Civil Remedy Notice of Insurer Violation (“Notice”) to the Florida Department of Financial Services to place an insurance carrier on notice of its violations and allow them time to cure the allegations. The are statutory time-frames and methods for provision of the Notice set forth in Florida Statute §624.155. The statute also sets forth the types of activities that may constitute Bad Faith and the potential ramifications if the carrier fails to timely, and properly, resolve the violation. Fla. Stat. §624.155 provides that “The damages recoverable pursuant to this section shall include those damages which are reasonably foreseeable result of a specified violation of this section by the authorized insurer and may include an award or judgment in an amount that exceeds the policy limits.”
When proceeding forward with an action for Bad Faith, many policyholders and their representatives are being met with stiff, unexpected resistance to sufficiency of their Notice. To be sure, rather than arguing the merits of their actions, an insurance carriers’ easiest path to defeat an action for Bad Faith is to identify any deficiency in the Notice itself and then to have the entire action dismissed. Their argument, founded in Florida case law, is that the courts must strictly adhere to statutory requirements set forth in Fla. Stat. §624.155 and find in their favor wherever the requirements are not followed. Such arguments often include: failure to provide an insurer’s address or accurate email addresses, failure to be specific in the violation allegations, filing notices against an insurance carrier’s parent company and not directly against the insurer, and failure to properly identify the name of the insurance carrier.
To illustrate the point, two recent opinions rendered by Florida’s 4th District Court of Appeal deal with review of orders of dismissal of Bad Faith cases by a circuit court. In Carla Bay v. United Services Automobile Association, the circuit court dismissed a Bad Faith action due to the Notice being filed against USAA Casualty Insurance Company instead of United Services Automobile Association. See Carla Bay v. United Services Automobile Association, 2020 WL 6154256 (Fla. 4th DCA 2020). Although it seems a trivial error, misnaming the insurance company arguably prevents the insurance company receiving the Notice from properly responding. In Carla Bay, the 4th DCA reversed the trial court’s final order of dismissal, letting the insured off the hook by concluding that the insurer had waived that specific notice requirement when it failed to raise the misidentification in its written response to the Notice. Id. Critically, it seems that had the insurance company raised failure to identify the proper insurance company in response to the Notice filing the court may have found against the insured and affirmed dismissal.
In Julien v. United Property & Cas. Ins. Co., the 4th DCA affirmed a circuit court order finding that the Notice lacked specificity required by the statute because the policyholder, or perhaps their representative, simply listed off every statutory provision and every policy provision available. Julien v. United Property & Cas. Ins. Co., 2020 WL 5652364 (Fla. 4th DCA 2020). The 4th DCA reasoned that the statute has specificity requirements for a reason, namely, to allow the insurer an opportunity to respond to the alleged violations and not the entirety of the Bad Faith statute and policy. Id. Careful attention to the facts of a specific claim and application to the available statutory and policy provisions is critical to avoiding dismissal for lack of specificity.
Properly following and completing each technical step in filing a Civil Remedy Notice of Insurer Violation for a Bad Faith claim can be very challenging. One misstep can lead to a legitimate Bad Faith action against an insurance company being dismissed by the courts. Bennett Legal can help guide a policyholder through the appropriate filing of a Notice and the litigation that follows. Please contact our office to discuss your Bad Faith concerns.