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October 2010 Case Law Update

Mon Nov 1st, 2010 on     Uncategorized,    

Here is a brief summary of some recent insurance-related decisions from October 2010:

Mercury Ins. Co. of Fla. v. Jackson (Fla. 1st DCA Oct. 29, 2010)

In a declaratory judgment action brought by the insurer to determine whether it had acted in good faith in adjusting claims against its insureds arising out of a car accident, there was no error in transferring the case to the county in which the accident occurred, the estate had been opened, and any settlement would have ultimately been paid. Although an insured’s county of residence may be a significant factor in other cases where bad faith venue is at issue, it was not a significant factor under unique facts presented in this case.

Citizens Property Ins. Co. v. Michigan Condo. Ass’n (Fla. 4th DCA Oct. 27, 2010)

Trial court erred by granting insured’s motion to compel appraisal before the court had resolved the underlying coverage dispute. The Fourth District determined that the insurer did not waive its right to deny coverage by failing to deny coverage before suit was filed.

Beverly v. State Farm Fla. Ins. Co. (Fla. 2d DCA Oct. 27, 2010)

Trial court erred by entering summary judgment for the insurer finding that insurer’s post-suit payment of additional policy proceeds did not entitle the insured to fees under Fla. Stat. s. 627.428. The insured argued that its insurer wrongfully caused it to resort to litigation in order to resolve the conflict when it was within the company’s power to do so. The Second District held that there were factual issues as to whether the insured was forced to file suit to resolve the claim that precluded summary judgment.

Pineda v. State Farm Fla. Ins. Co. (Fla. 3d DCA Oct. 27, 2010)

The Third District held that no attorneys’ fees were awardable under 627.428 for a portion of the case seeking appraisal under a homeowner’s policy where the parties were unable to agree on an umpire and the insurer filed a petition for selection of a neutral umpire. However, the court determined that the insureds were entitled to an award of attorneys’ fees for successfully defeating the insurer’s request that the trial court direct the umpire to provide an itemized appraisal.

Allstate Property & Cas. Ins. Co. v. Archer (Fla. 2d DCA Oct. 13, 2010)

Auto insurer was not entitled to writ of certiorari to prevent the deposition duces tecum of one of its adjusters, as insurer failed to establish that the taking of the deposition would result in irreparable harm, given limitations imposed on the deposition by the trial court.

O’Brien v. McMahon (Fla. 1st DCA Oct. 7, 2010)

The First District determined that there was no error by the trial court in concluding that the owner of a Prudential life insurance policy had substituted his younger daughter for his niece as beneficiary of the policy years before his death in compliance with the policy’s terms.

Citizens Property Ins. Corp. v. San Perdido Ass’n, Inc. (Fla. 1st DCA Oct. 6, 2010)

The First District determined that the trial court’s denial of Citizens’ motion to dismiss a bad faith action on the ground of sovereign immunity is not reviewable by writ of prohibition or certiorari. The appellate court certified the following question to the Florida Supreme Court: “Whether, in light of the Florida Supreme Court’s ruling in Dep’t of Ed. v. Roe, 679 So. 2d 756 (Fla. 1996), review of the denial of a motion to dismiss based on a claim of sovereign immunity should await the entry of a final judgment in the trial court?”

Office Depot, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh (S.D. Fla. Oct. 15, 2010)

In an action filed by an insured against a primary and excess insurer seeking declaratory judgment that the primary insurer breached a claims made executive and organization liability policy, the court held on summary judgment that: (1) the phrase “proceeding against,” in the context of a “carve back” clause, defining “Securities Claim,” referred to formal legal action rather than preliminary agency investigatory action; (2) sums paid by insured on behalf of its officers, directors, and employees in connection with SEC inquiry before receiving a subpoena or Wells notices did not constitute “loss” arising from “Claim;” (3) “relation back” provision did not apply to pre-suit investigation costs that may have related to and benefited defense of covered “subsequent Claims” that were not covered “loss” that “arises from” those “subsequent claims;” (4) definition of covered “loss,” including “defense costs,” did not include cost of investigating potential or anticipated claims; and (5) sums incurred by Office Depot in connection with the internal investigation performed by the Audit Committee and restatement of its financials did not “result solely from” the investigation and defense of federal securities litigation, and did not “arise from” covered “Securities Claim.”

Trianon Condo. Ass’n, Inc. v. QBE Ins. Corp. (S.D. Fla. Oct. 1, 2010)

In an action filed by an insured against its property insurer asserting claims for breach of contract and breach of implied warranty of good faith and fair dealing alleging that the insurer failed to provide it with any estimate of hurricane-related damages, and to adjust, pay, and/or settle its claims under the policy, the insurer moved to dismiss for failure to state a claim. The Southern District held that: (1) the insured failed to state a cause of action for declaratory relieve under Florida law; (2) there is no independent cause of action under Florida law for violating statute requiring that insurance policies containing hurricane deductibles must contain boldfaced type stating that policies contain such deductibles; and (3) insured’s claim for breach of implied warranty of good faith and fair dealing was really an unripe statutory bad faith claim.

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