CHARLES SMITH, APPELLANT,
v.
STANDARD GUARANTY INSURANCE COMPANY, APPELLEE
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Smith sued his insurance company for bad faith in failing to pay a collision loss claim and sought both compensatory and punitive damages. The trial court directed a verdict against Smith on punitive damages and then sua sponte directed a verdict for compensatory damages in the amount of $4,375. The appellate court affirmed the denial of punitive damages but reversed and remanded the compensatory damages award because the directed verdict may have been inadequate based on evidence Smith introduced.
The court held that punitive damages do not lie against an insurance company for bad faith in failing to pay a first-party claim under Florida law. However, the court reversed the directed verdict on compensatory damages because Smith had introduced evidence that might have supported a higher award, and the directed verdict of $4,375 may have been inadequate.
[1] A suit for punitive damages will not lie against an insurance company for bad faith in failing to pay a first-party claim.
[2] The relationship between a collision carrier and its insured is that of debtor and creditor, not a fiduciary relationship.
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Join FLexlaw to unlock all legal intelligence“our Florida courts have consistently held that a suit for punitive damages will not lie against an insurance company for bad faith in failing to pay a first party claim”
Establishes the controlling rule that punitive damages are unavailable in first-party insurance bad faith cases
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Join FLexlaw to unlock all legal intelligenceSmith filed suit in 1981 against Standard Guaranty Insurance Company for damages resulting from the company's failure to pay a collision loss under hi…
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GRIMES, Acting Chief Judge.
Appellant (Smith) sued appellee (Standard) in 1981 for compensatory and punitive damages resulting from failure to pay a collision loss under Smith’s policy with Standard. Smith contends that the court erred in directing a verdict against him on his claim for punitive damages.
At best, Standard’s handling of Smith’s claim was bungling and arbitrary. In any event, it was sufficiently callous that a jury would be justified in concluding that Standard was guilty of bad faith.
However, our Florida courts have consistently held that a suit for punitive damages will not lie against an insurance company for bad faith in failing to pay a first party claim. Industrial Fire & Casualty Insurance Co. v. Romer, 432 So. 2d 66 (Fla. 4th DCA 1983); United States Fire Insurance Co. v. Clearwater Oaks Bank, 421 So. 2d 783 (Fla. 2d DCA 1982); Travelers Insurance Co. v. Habelow, 405 So. 2d 1361 (Fla. 5th DCA 1981); Shupack v. Allstate Insurance Co., 367 So. 2d 1103 (Fla. 3d DCA 1979); Lumilite Industries, Inc. v. Southeast Life Insurance Co., 365 So. 2d 1083 (Fla. 3d DCA 1979); Allstate Insurance Co. v. Gibbs, 340 So. 2d 1202 (Fla. 4th DCA 1976); Midwest Mutual Insurance Co. v. Brasecker, 311 So. 2d 817 (Fla. 3d DCA 1975); Baxter v. Royal Indemnity Co., 285 So. 2d 652 (Fla. 1st DCA 1973); cf. Evans v. Florida Farm Bureau Casualty Insurance Co., 384 So. 2d 959 (Fla. 1st DCA 1980) (upholding a claim for punitive damages against an uninsured motorist carrier’s arbitrary refusal to consent to its insured’s third party claim); contra Escambia Treating Co. v. Aetna Casualty & Surety Co., 421 F.Supp. 1367 (N.D.Fla.1976).
Unlike the fiduciary relationship involved in the defense of a liability claim, a collision carrier and its insured occupy the status of debtor and creditor. Baxter v. Royal Indemnity Co. Of course, a successful first party claimant can obtain the payment of his attorney’s fees under section 627.428, Florida Statutes (1981), and the Insurance Commissioner may invoke sanctions for insurance company misconduct.
Standard’s conduct did not rise to the level of deliberate, overt and dishonest dealings which might constitute an independent basis for punitive damages. Saltmarsh v. Detroit Automobile Inter-Insurance Exchange, 344 So. 2d 862 (Fla. 3d DCA 1977); see Butchikas v. Travelers Indemni ty Co., 343 So. 2d 816 (Fla.1976). Therefore, the court correctly refused to permit Smith’s punitive damage claim to go to the jury-
After the court directed the verdict on punitive damages and it became apparent that Standard was not going to present any testimony, the court sua sponte directed a verdict in favor of Smith for compensatory damages in the sum of $4,375. The court appeared to act upon the assumption that it was helping Smith since Smith’s attorney offered no objection. However, Smith had introduced certain evidence upon which the jury might have returned a higher verdict than that directed by the court. Consequently, since Smith never moved for a directed verdict, and he now complains that it was inadequate, we hereby reverse the judgment for compensatory damages and remand that issue for a new trial. In all other respects, the judgment is affirmed.
RYDER and DANAHY, JJ., concur.
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Dunn v. Nat'l Sec. Fire & Cas. Co., 631 So. 2d 1103 (Fla. 5th DCA 1993)…t & Indemnity Co. v. Mathis, 511 So. 2d 601 (Fla. 4th DCA), rev. denied, 518 So. 2d 1275 (Fla.1987); Allstate Insurance Co. v. Douville, 510 So. 2d 1200 (Fla. 2d DCA), rev. denied, 519 So. 2d 986 (Fla.1987); Smith v. Standard Guaranty Insurance Co., 435 So. 2d 848 (Fla. 2d DCA), rev. denied, 441 So. 2d 633 (Fla.1983). [*1109] Dunn alleged in his complaint only the following: That Defendant, National Security First & Casualty Company’s bad faith actions in this ease, were committed with such frequency as to c…
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Iowa Nat'l Mut. Ins. Co. v. Elease Worthy, 447 So. 2d 998 (Fla. 5th DCA 1984)…ct.11 We approve the trial court’s dismissal of the insured’s count alleging constructive fraud since in the context of this case there was no fiduciary relationship between the insurer and its insured. See Smith v. Standard Guaranty Insurance Co., 435 So. 2d 848 (Fla. 2d DCA 1983), review denied, 441 So. 2d 633 (Fla.1983); Shupack v. Allstate Insurance Co., 367 So. 2d 1103 (Fla. 3d DCA 1979); Baxter v. Royal Indemnity Company, 285 So. 2d 652 (Fla. 1st DCA 1973), cert. dismd., 317 So. 2d 725 (Fla.1975); Kocs…
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Safeco Ins. Co. OF Am. v. Nancy (Lloyd) Campbell, 433 So. 2d 25 (Fla. 2d DCA 1983)…laim, we will consider both issues here. Florida courts have consistently held that a suit for punitive damages will not lie against an insurance company for bad faith in failing to pay a first party claim. Smith v. Standard Guaranty Insurance Co., 435 So. 2d 848 (Fla. 2d DCA May 20, 1983); Industrial Fire & Casualty Insurance Co. v. Romer, 432 So. 2d 66 (Fla. 4th DCA 1983); Clearwater Oaks Bank; Gibbs; Midwest Mutual Insurance Co. v. Brasecker, 311 So. 2d 817 (Fla. 3d DCA 1975), cert. denied, 327 So. 2d 31…
Previewing 3 of 9 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited (12 total)
- Foy Baxter and Annie Smith Baxter v. Royal Indem. Co., 285 So. 2d 652 (Fla. 1st DCA 1973)
- Gus George Butchikas v. Travelers Indem. Co., 343 So. 2d 816 (Fla. 1976)
- Indus. Fire & Cas. Ins. Co. v. Romer, 432 So. 2d 66 (Fla. 4th DCA 1983)
- Allstate Ins. Co. v. Gibbs, 340 So. 2d 1202 (Fla. 4th DCA 1976)
- United States Fire Ins. Co. v. Clearwater Oaks Bank, 421 So. 2d 783 (Fla. 2d DCA 1982)
- Saltmarsh v. Detroit Auto. Inter-Insurance Exch., 344 So. 2d 862 (Fla. 3d DCA 1977)
- Travelers Ins. Co. v. Habelow, 405 So. 2d 1361 (Fla. 5th DCA 1981)
- Shupack v. Allstate Ins. Co., 367 So. 2d 1103 (Fla. 3d DCA 1979)
- Midwest Mut. Ins. Co. v. Brasecker, 311 So. 2d 817 (Fla. 3d DCA 1975)
- Evans v. Fla. Farm Bureau Cas. Ins. Co., 384 So. 2d 959 (Fla. 1st DCA 1980)