5 Fla. L. Weekly Supp. 164a
Insurance — Insured’s action against insurer alleging bad faith in connection with settlement negotiations — Requirement that underlying contractual claims against insurer be resolved prior to proceeding with bad faith action was satisfied when partial settlement of those claims was reached as result of mediation — Motion to abate on ground that contractual claims had not been resolved denied — Complaint dismissed without prejudice where insured failed to allege that there had been a determination of damages
ALL AMERICAN CONCRETE CUTTING CONTRACTORS, INC., Plaintiff, v. TIG INSURANCE COMPANY, Defendant. 17th Judicial Circuit in and for Broward County. Case No. 95-011378-09. October 31, 1997. Robert Lance Andrews, Judge.
ORDER
THIS CAUSE came before this Court upon Defendant’s Motion to Abate Count II of the Amended Complaint. The Court, having considered same, heard argument of counsel, having examined the record, and all pertinent authority on the matter, and being otherwise duly advised in the premises, finds and decides as follows:
On December 26, 1995, the Plaintiff filed an Amended Complaint in this cause, alleging: (1) Count I, breach of an insurance contract; and (2) Count II, bad faith in settling an insurance claim. Thereafter, the parties agreed to submit the matter for mediation. On March 29, 1996, the mediator filed a report with this Court, stating that the case had been partially settled.
Subsequently, the Defendant filed the instant Motion to Abate Count II, alleging that the bad-faith claim had not accrued, because the underlying contractual litigation had not been resolved favorably to the insured. The Court disagrees.
As a matter of law, “[a]n 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.” Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So. 2d 1289, 1291 (Fla. 1991). A resolution need not flow from either litigation or arbitration; only “a resolution of some kind in favor of the insured is a prerequisite.” Brookins v. Goodson, 640 So. 2d 110, 113 (Fla. 4th DCA 1994) review denied, 648 So. 2d 724 (Fla. 1994); disapproved on other grounds, State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So. 2d 55, 62 (Fla. 1995).
In the instant case, a partial settlement was reached as the result of mediation. A mediation settlement constitutes the requisite resolution. Therefore, Defendant’s reasoning in its Motion to Abate is without merit. However, a “complaint for a bad-faith claim requires an allegation that there has been a determination of damages.” Imhof v. Nationwide Mut. Ins. Co., 643 So. 2d 617, 619 (Fla. 1994). Such allegation is missing in the instant Complaint.1 Hence, this Court, sua sponte, must dismiss Count II of the Amended Complaint without prejudice for failure to state a cause of action.
Accordingly, it is hereby
ORDERED AND ADJUDGED that Defendant’s Motion to Abate is DENIED. However, it is further ORDERED AND ADJUDGED that Count II of the Complaint is DISMISSED without prejudice by this Court sua sponte, allowing the Plaintiff 10 days from the rendition of this Order to amend the Complaint.
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1The Court is aware that the Fourth District Court of Appeal has ruled that “payment of the policy limits by the insurer … is the functional equivalent of an allegation that there has been a determination of the insured’s damages.” Brookins, 640 So. 2d at 112. The appellate court clearly distinguished Brookins from Imhof, supra, because the Imhof plaintiff had received less than the policy limits in his arbitration award. Here, the Complaint implicitly asserts that the payment received did not reach the policy limits (see paragraph 20); therefore, Imhof must apply rather than Brookins.
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