• Florida Supreme Court Allows Common Law Bad Faith Cause of Action Before Entry of Excess Judgment, Despite Statutory Cure Provision
  • January 8, 2007
  • Law Firm: Hinshaw & Culbertson LLP - Fort Lauderdale Office
  • Macola v. GEICO, ___So. 2d___, No. SC05-1021 (Fla. October 26, 2006).

    The Florida Supreme Court recently held that despite an insurer's tender of policy limits to an insured prior to the entry of an excess judgment pursuant to a statutory cure provision, an insured may still bring a cause of action for common law bad faith against an insurer. In this case, a policy limit demand letter from an insured’s attorney prior to litigation and a subsequent excess verdict formed the basis of a common law bad faith claim despite the fact that the insurer took advantage of a statutory cure provision under Fla. Stat. § 624.155. The court found that the insurer exposed its insured to an excess judgment when it failed to successfully settle the underlying claim in a timely fashion. Therefore, while the insurer's eventual tender of the policy limits was evidence of good faith, the insurer's tender of the policy limits after the filing of the civil remedy notice did not eliminate the underlying tort action, giving rise to a third-party bad faith cause of action.