Recently the Fourth District Court of Appeal (“4th DCA”) abated a bad faith case brought against Safeco. The underlying issue of coverage was also involved in the lawsuit. We have often discussed how Florida law requires a determination of liability and extent of damages before a bad faith action can proceed. The 4th DCA decided to abate and not dismiss a bad faith action against Safeco Insurance Company in an opinion issued September 17, 2014.1
Ms. Beare sued third parties because of injuries she sustained in an automobile accident. Those parties settled and Ms. Beare amended her complaint to add her insurance carrier, Safeco, for uninsured/underinsured benefits (“UM”) under her policy and for bad faith refusal to settle her claim. Safeco answered the UM claim, but filed a motion to dismiss the bad faith claim as premature. The trial court abated the bad faith count instead of dismissing it. Safeco filed a petition to the 4th DCA arguing it was irreparably harmed by the denial of its motion to dismiss the bad faith count. Since the bad faith claim was an amendment to the original negligence claim, which was filed over one year before Safeco was brought into the mix, Safeco pointed out that it could not remove the case to federal court. Safeco claimed the court departed from the essential requirements of law and that it would be irreparably harmed in being forced to litigate the bad faith claim in state court as opposed to federal court.
The 4th DCA agreed this could be irreparable harm, but held that Safeco failed to show that the court did not follow the law. Safeco argued that Florida Supreme Court precedent requires the bad faith claim to be dismissed when brought at the same time as a coverage action. The 4th DCA went through an analysis of case law that discusses abatement of bad faith claims under these circumstances and cited Allstate Indemnity Company v. Ruiz.2 In Ruiz, the Florida Supreme Court considered what discovery would be allowed in bad faith actions, and suggested the use of abatement as a tool where coverage and bad faith actions were filed together. Therefore, the 4th DCA held that it is not clear that dismissal is the only method of handling a premature bad faith claim.
The 4th DCA concluded that:
Because the case law supports the trial court’s abatement of the bad faith action in lieu of dismissal, we cannot conclude that the trial court departed from the essential requirements of law.
1 Safeco Ins. Co. of Ill. v. Beare, 2014 WL 4626851 (Fla. 4th DCA Sept. 17, 2014).
2 Allstate Indemnity Co. v. Ruiz, 899 So.2d 1121 (Fla. 2005).