Many of you are likely aware of the Florida Supreme Court decision holding a cause of action for good faith and fair dealing is not recognized in Florida.1 Despite the Chalfonte decision, good faith and fair dealing came up a fair bit in a recently settled case I litigated for approximately two years. In that case, the carrier sued the policyholder, claiming, among other things, coverage was not owed due to the policyholder’s purported lack of cooperation. The court properly kept my good faith and fair dealing affirmative defense at play, despite Chalfonte.

First, although Chalfonte states there is no good faith and fair dealing cause of action, it said nothing about a policyholder’s right to raise this kind of good faith and fair dealing affirmative defense:

As their Ninth Affirmative Defense, the [policyholders] state that it is an established contract principle that a party’s good faith and fair dealing is an implied condition precedent to performance of a contract. The [policyholders] further state that, where good faith and fair dealing does not occur, the recalcitrant party is estopped from availing itself of its own wrongdoing. The [policyholders] further state that insurance fraud is not good faith and fair dealing and is committed when an insurer, adjusting firm, and / or agents or representatives make statements or conceal evidence with intent to injure, defraud, or deceive any claimant with regard to any claim. The [policyholders] further state that the [insurance company] has intentionally misrepresented material facts and circumstances relating to the subject insurance claim so as to intimidate its insureds, manipulate the subject insurance claim and this litigation, and divest the [policyholders] of the benefits for which they contracted. [The insurance company’s] material misrepresentations are discussed in greater detail in the [policyholders’] countersuit (below) and incorporated into this affirmative defense by reference.

Second, whenever purported lack of policyholder cooperation is at issue, so too is the carrier’s good faith in bringing about the policyholder’s cooperation. In Ramos v. Northwestern Mutual Insurance Company,2 the Florida Supreme Court held:

[T]o constitute the breach of a policy, the lack of cooperation must be material and the insurance company must show that it was substantially prejudiced in the particular case by failure to cooperate. Furthermore, . . . the insurer must show that it has exercised diligence and good faith in bringing about the cooperation of its insured and must show that it has complied in good faith with the terms of the policy.

Food for thought for policyholder advocates – Chalfonte, in my opinion (and in the opinion of at least one state circuit court judge), has not entirely removed good faith and fair dealing from the equation.

1 QBE Ins. Corp. v. Chalfonte Condo. Apartment Ass’n, Inc., 94 So. 3d 541 (Fla. 2012).
2 Ramos v. Northwestern Mut. Ins. Co., 336 So. 2d 71, 75 (Fla. 1976) (internal citations omitted). See also Deleon v. Great Am. Ins. Co., 78 So. 3d 585, 591 (Fla. 3d DCA 2011) (“The appellee’s position is based on the argument that De Leon’s refusal to complete the examination and provide the requested documents prevented Great American from exercising its contractual right to fully investigate his claim. This is completely wrong; because De Leon “refused” to respond to wholly impertinent and improper questions which had nothing to do with the merits of the claim. And we think he was right to do so.”); Am. Fire & Cas. Co. v. Collura, 163 So. 2d 784 (Fla. 2d DCA 1964) (cited by the Florida Supreme Court in Ramos).