In Swanson v. State Farm Mutual Auto. Ins. Co., Case No. 6:2019-cv-00422 (M.D. Fla. Apr. 22, 2019), an insured sued its insurer for common law bad faith, alleging an improper denial of benefits. The insurer moved to dismiss and its motion was granted. Florida law recognizes first and third party causes of action against insurers for bad faith. However, while a common law cause of action in third-party bad faith claims has long been recognized in Florida, a first party bad faith claim against insurers may be asserted pursuant to Florida Statute section 624.155.
The insured argued that Florida law recognizes common law first party bad faith claim, where the insurer’s actions are so egregious and outrageous it elevates what would have been an ordinary bad faith cause of action into an independent, willful tort action. The insured pointed to alleged misconduct during the course of the proceedings on the part of the insurer, which resulted in a mistrial. The court rejected the insured’s argument, pointing out that the Florida Supreme Court has repeatedly held that the state does not recognize a common law first party bad faith action. The court therefore dismissed the lawsuit.
If the insurer had arguably conducted itself improperly in the underlying action, why didn’t the insured seek sanctions with that court? Likely because the conduct did not itself rise to the level of bad faith or vexatiousness required by the rules to sustain any such claim. This insured attempted to obtain fees in another way and as the court made clear, there was simply no other way in this context.
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