PROGRESSIVE AMERICAN INSURANCE COMPANY, APPELLANT,
v.
NATIONWIDE INSURANCE COMPANY, A FOREIGN CORPORATION, APPELLEE
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Progressive Insurance appealed a summary judgment dismissing its bad faith claim against Nationwide Insurance. The court held that a primary insurance carrier owes a duty of good faith to an excess carrier under Florida law, reversing the summary judgment and remanding for trial.
A primary carrier owes an excess carrier the same duty of good faith it owes its own insured, stemming from equitable subrogation principles. When an award exceeds the primary insurer's policy limits, the excess insurer has the right to sue for bad faith just as the insured would.
[1] When two insurance policies contain "other insurance" clauses, and one policy is "pro rata" while the other is "excess insurance," effect is given to the excess insurance…
[2] A primary insurer owes a duty of good faith to an excess insurer.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“in Florida, a primary carrier owes a duty of good faith to an excess carrier — the same duty it owes its insured”
Establishes the primary holding that primary insurers have a fiduciary duty to excess carriers
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Join FLexlaw to unlock all legal intelligenceA pedestrian was hit by a car driven by Nationwide's insured. Progressive insured the driver's employer with $1,000,000 in coverage; Nationwide insure…
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BROWNING, C.J.
A pedestrian hit by a car sued both the driver, insured by Nationwide, and his employer, insured by Progressive. Nationwide provided $100,000 of coverage; Progressive provided $1,000,000. Both insurers had a duty to defend, under the language of their policies. Both policies contained “other insurance” clauses; Nationwide’s explained it would be liable “for only our share of the loss if there is other collectible liability insurance,” and Progressive’s characterized its coverage as “excess over any other valid and collectible insurance whether primary, excess or contingent.”
Nationwide defended the claim; Progressive declined to defend. After settlement attempts failed, the jury returned a verdict for the pedestrian, in an amount over Nationwide’s coverage limit, which Progressive was forced to pay. Progressive sued Nationwide, alleging (among other claims) bad faith in the defense of their insured at trial. Nationwide moved for summary judgment, and the motion was granted on the reasoning that Nationwide did not owe Progressive such a duty. Progressive now seeks review of that ruling.
It is undisputed that Nationwide is the primary carrier and Progressive the excess carrier because, in Florida, where two policies each contain “other insurance” clauses but one is “pro rata” and the other is “excess insurance,” effect is given to the latter. See Demshar v. AAACon Auto Transp., Inc., 337 So. 2d 963, 965 (Fla. 1976).
Moreover, in Florida, a primary carrier owes a duty of good faith to an excess carrier — the same duty it owes its insured. Ranger Ins. Co. v. Travelers Indem. Co., 389 So. 2d 272, 275 (Fla. 1st DCA 1980). This duty stems from equitable subrogation principles, in that, in the event of an award over the primary insurer’s policy limits, the excess insurer incurs the same duty to pay that the insured would have in the absence of an excess insurer, and correspondingly the excess insurer has the same right to sue the primary insurer for bad faith as the insured. Id.; United States Auto. Ass’n v. Hartford Ins. Co., 468 So. 2d 545, 547 (Fla. 5th DCA 1985).
Therefore, Nationwide owed Progressive a duty of good faith.
Accordingly, we RE VERSE the summary judgment for Nationwide, and REMAND for further proceedings.
WOLF and KAHN, JJ., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Vigilant Ins. Co. v. Cont'l Cas. Co., 33 So. 3d 734 (Fla. 4th DCA 2010)…fendant. Id. at 276. In essence, the excess insurer steps into the shoes of the insured with [*738] respect to a claim for bad faith against the primary insurance company. See id. at 274-76; see also Progressive Am. Ins. Co. v. Nationwide Ins. Co., 949 So. 2d 293 (Fla. 1st DCA 2007) (stating that the primary carrier owes a duty of good faith to an excess carrier based on equitable subrogation principles). While the trial court relied on Cope, that case is distinguishable. In Cope, a party, Mr. Cope, was inv…
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Progressive Express Ins. Co. v. Ferris, 312 So. 3d 112 (Fla. 5th DCA 2020)
Authorities Cited
- Demshar v. AAACon Auto Transp., Inc., 337 So. 2d 963 (Fla. 1976)
- Ranger Ins. Co. v. Travelers Indem. Co., 389 So. 2d 272 (Fla. 1st DCA 1980)
- United States Auto. Ass'n v. The Hartford Ins. Co., 468 So. 2d 545 (Fla. 5th DCA 1985)