LANDMARK AMERICAN INSURANCE COMPANY, APPELLANT,
v.
STUDIO IMPORTS, LTD., INC., APPELLEE

Fla. 4th DCA | 2011-11-16
Nos. 4D10-5001, 4D10-5073
GROSS and CONNER, JJ., concur.
76 So. 3d 963 Florida District Court of Appeal, Fourth District (2011) Caution
Cited by 10 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.


Holding

A bad faith claim against an insurer cannot proceed simultaneously with the underlying breach of contract claim; the bad faith claim must be abated or dismissed until the underlying claim is resolved.


Headnotes

[1] A bad faith claim against an insurer cannot proceed simultaneously with the underlying breach of contract claim; the insured must first prevail on the merits of the under…

[2] A trial court has the authority to abate a statutory bad faith claim rather than dismiss it without prejudice, particularly when abatement serves the interest of judicial…

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

Facts & Procedural History

Studio Imports sued Landmark American Insurance Company for breach of contract and bad faith after Hurricane Wilma caused property and business income…

The full statement of facts, procedural history, and disposition for this case are member content.

Join FLexlaw to unlock all legal intelligence

© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.


Opinion of the Court
POLEN, J.

POLEN, J.

Appellant, Landmark American Insurance Company (“Landmark”), appeals a non-final trial court order in which the trial court granted Landmark’s motion to dismiss as to four of six counts of Studio Imports, Ltd., Inc.’s (“Studio”) complaint, but denied Landmark’s motion as to the remaining two, leaving only a breach of contract claim and a bad faith claim to be tried simultaneously. We hold that Landmark should not have to defend against a bad faith claim at the same time as the underlying issue without the appellee first prevailing on the merits. Accordingly, we reverse this matter so the trial court can determine whether the bad faith claim should be abated or dismissed without prejudice.

Landmark and Studio entered into a contract for Landmark to provide insurance coverage to Studio for commercial property, personal property, and business income. In October 2005, Hurricane Wilma caused extensive damage to Studio’s property, which, coincidentally, also resulted in a loss of business income. Studio claimed that Landmark “took an exceedingly and unjustifiably long time to” reimburse Studio for those losses which caused *964additional damages, such as “loss of goodwill, a damaged reputation with existing and potential customers, ruined business relationships, and ruined banking relationships.” Studio filed a six count complaint, alleging that Landmark breached obligations to Studio under a contract between the parties. Specifically, count II alleged statutory bad faith and unfair claim practices.

Landmark filed a motion to dismiss all six counts of the complaint. A hearing on the motion to dismiss was held. The trial court granted Landmark’s motion to dismiss for all counts except breach of contract and bad faith under section 624.155, Florida Statutes, thus allowing Studio to prosecute both claims simultaneously. Landmark then filed this appeal, asking this court to exercise jurisdiction, issue a writ of certiorari, and quash the written order denying the dismissal of the count for statutory bad faith.

“The standard of review of a trial court’s denial of a motion to dismiss is de novo.” Simpson v. State, 38 So.3d 776, 778 (Fla. 4th DCA 2010).

This court held in State Farm Mutual Automobile Insurance Co. v. Tranchese, 49 So.3d 809 (Fla. 4th DCA 2010), that writ of certiorari is properly granted to abate the cause of action for violation of section 624.155, Florida Statutes,1 until underlying claim determinations are made. Id. at 809-10. “Where causes of action for both the underlying damages and bad faith are brought in the same action, the appropriate step is to abate the bad faith action until coverage and damages have been determined.” Id. at 810. Additionally, the Supreme Court of Florida held in Blanchard v. State Farm Mutual Automobile Insurance Co., 575 So.2d 1289 (Fla.1991), that “an insured’s underlying first-party action for insurance benefits against the insurer necessarily must be resolved favorably to the insured before the cause of action for bad faith in settlement negotiations can accrue.” Id. at 1291. If a determination regarding liability is not made, a cause of action for bad faith can never ripen. See id.

The First District Court of Appeal applied Blanchard in Vanguard Fire & Casualty Co. v. Golmon, 955 So.2d 591 (Fla. 1st DCA 2006), and determined that cer-tiorari review is properly granted when the trial court departs from essential requirements of law, such as allowing a party “to proceed on [a] statutory bad faith elaim[ ] before the extent of coverage was determined in [a] breach of contract claim.” Id. at 593. The First District quashed the order under review, which would have forced Vanguard to simultaneously “defend against both the breach of contract and bad faith claims.” Id. at 594. Further, the First District provided “that the trial court has authority to abate the statutory claims, rather than to dismiss them, if it appears to the court that abatement would be in the interest of judicial economy.” Id. at 595.

Therefore, we reverse the trial court order, which would require Landmark to defend against both a breach of contract claim and a bad faith claim simultaneously, as the underlying issue must be determined prior to a bad faith claim. The trial court can decide to either dismiss the bad faith claim without prejudice or abate the *965claim until the underlying breach of contract issue is resolved.

Reversed and Remanded.

GROSS and CONNER, JJ., concur.


Cases With Similar Vibessemantic neighbors from the corpus


Citator

Cited By

  • GEICO Gen. Ins. Co. v. Harvey, 109 So. 3d 236 (Fla. 4th DCA 2013)
    …judicial economy, a trial court has discretion to abate a bad faith claim that is brought in a coverage action; however, the trial court also has discretion to dismiss the claim without prejudice. Landmark Am. Ins. Co. v. Studio Imports, Ltd., Inc., 76 So. 3d 963, 964 (Fla. 4th DCA 2011) (citing Vanguard Fire & Cas. Co. v. Golmon, 955 So. 2d 591 (Fla. 1st DCA 2006)). Unlike Tranchese, this case does not involve a first party bad faith claim. Here, the insured defendant has attempt [*240] ed to raise a third…
  • Safeco Ins. Co. OF Ill. v. Earle Rader, Jr., 132 So. 3d 941 (Fla. 1st DCA 2014)
    …ad-faith claim once the UM judgment was entered. This is contrary to the case law, according to which a trial court may proceed with a bad-faith count after entering judgment on the UM claim. See, e.g., Landmark Am. Ins. Co. v. Studio Imports, Ltd., 76 So. 3d 963, 963 (Fla. 4th DCA 2011) (holding petitioner “should not have to defend against a bad faith claim at the same time as the underlying issue without the appellee first prevailing on the merits,” and reversing “so the trial court can determine whether…
  • Safeco Ins. Co. OF Ill. v. Beare, 152 So. 3d 614 (Fla. 4th DCA 2014)
    …rty bad faith claim. Harvey, 109 So.Bd at 239-40. We also allowed the trial court to either dismiss or abate a bad faith action until the underlying breach of contract action was determined in Landmark American Insurance Co. v. Studio Imports, Ltd., 76 So. 3d 963, 964 (Fla. 4th DCA2011). Safeco maintains, however, that the Florida Supreme Court’s holding in Vest compels dismissal of the bad faith action, rather than abatement. Vest did state that where a bad faith claim is prematurely filed, it should be di…

Previewing 3 of 7 citing cases — full citator treatment, depth of discussion, and citing context are member features.

Join FLexlaw to unlock all legal intelligence

Authorities Cited

Full citator, related cases, and AI research tools

Open in FLexlaw