PCI, NAMIC Support State Farm Florida in Troublesome Hurricane Wilma Bad Faith Ruling
Oct 15, 2014
Above: Maria Elena Abate Filed An Amicus Brief Last Week On Behalf of PCI, NAMIC
The notion that an insurance company could still be liable for bad faith even after having complied with its own policy obligations is the driver behind insurer trade association support for State Farm Florida Insurance Company (“State Farm”) in Cammarata v. State Farm Florida Insurance Co., a case originating from a Hurricane Wilma damage claim.
The Property Casualty Insurers Association of America’s (“PCI’s”) Amici Curiae brief in support of State Farm was filed jointly with the National Association of Mutual Insurance Companies (“NAMIC”) on October 9, 2014 by Maria Elena Abate of Colodny Fass& Webb in Florida’s Fourth District Court of Appeal (“Court”).
The focus of PCI and NAMIC’s support–State Farm’s Motion for Rehearing–seeks to overturn the trial court’s ruling in Cammarata, which the associations contend is not only contrary to Florida law, but could lead to a vast increase in bad faith litigation and render the use of contractual appraisal provisions meaningless.
The brief warrants that, if the Cammarata Opinion is not withdrawn, policyholders will be permitted to use the appraisal process as a catalyst for thrusting claims into bad faith litigation.
In the Amici brief on behalf of PCI and NAMIC, Ms. Abate explained that, under Cammarata, an insurer’s payment of an appraisal award in accordance with its own contractual policy terms is being treated as the accrual point for a bad faith claim. In other words, the mere payment of the appraisal award would serve to establish liability and damages.
The brief argues that, in a first-party property damage case, the logical accrual point is when an insured’s first-party action for contract benefits is won or favorably resolved.
A parallel ruling also in the Fourth District Court of Appeal, Lime Bay Condominium,Inc. v. State Farm Florida Insurance Co., 94 So3d 698 (Fla. 4th DCA 2012) held that a final determination of both the insurer’s liability and the amount of damages owed by the insurer were conditions precedent to a bad faith claim. PCI and NAMIC’s Amici filing requested that the Lime Bay ruling should be confirmed as the correct rule of law, while the Cammarata opinion should be withdrawn.
The complete PCI/NAMIC Amici brief and a related document are attached for review.
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