FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
from the Circuit Court for Hernando County, Richard Tombrink,
A. Lauten and George A. Vaka, of Vaka Law Group, Tampa, and
Kelly L. Kubiak, of Merlin Law Group, Tampa, for Appellants.
Craig and Matthew J. Lavisky, of Butler Weihmuller Katz Craig
LLP, Tampa, for Appellee.
and Joanne Demase appeal a final order dismissing their bad
faith lawsuit against their insurer, State Farm Florida
Insurance Company, with prejudice. They argue that the trial
court erred in ruling that they could not maintain a bad
faith action without alleging that there had been a favorable
resolution of an underlying civil action for insurance
benefits against State Farm, whether in the form of a
judgment, arbitration, appraisal, or action on the contract.
We agree and reverse the order of dismissal.
Demases' home was insured under an insurance policy
issued by State Farm. In October 2009, their home sustained
suspected sinkhole damage, which they reported to State Farm.
State Farm hired Geohazards, Inc., which confirmed the
existence of sinkhole activity at the property and
recommended certain repairs. The Demases performed the
recommended repairs, resulting in further damage to their
home. Geohazards then re-inspected the home and made
additional recommendations. In August 2012, a neutral
evaluator agreed there was sinkhole activity at the property
and recommended further repairs. The Demases agreed to
proceed with the neutral evaluator's recommended repairs
under protest. However, in April 2013, State Farm hired MCD
of Central Florida to inspect the property. MCD opined that
there was no sinkhole activity affecting the Demases'
property. When the Demases persisted with their claim for
insurance benefits, State Farm demanded additional
documentation, inspections, and examinations under oath. The
Demases complied with all of these demands.
August 27, 2014, the Demases served a civil remedy notice
("CRN") pursuant to section 624.155, Florida
Statutes (2014), alleging that State Farm engaged in bad
faith insurance practices by failing to promptly and properly
investigate the claim, adjust the loss, and act with due
diligence and good faith to resolve and pay the claim. The
Demases demanded the immediate tender of "all insurance
monies due and owing . . . that would reasonably place [them]
back to their pre-loss condition." The Department of
Financial Services accepted the CRN on August 27, 2014, which
began a sixty-day period in which State Farm could cure its
alleged wrongful conduct. See § 624.155(3)(a),
Fla. Stat. (2014). While State Farm paid nothing during the
sixty-day cure period, on April 10, 2015, it conceded that
the Demases' home could not be repaired and tendered the
Demases then brought a first-party bad faith lawsuit against
State Farm, asserting various purported violations of
sections 624.155(1)(b)1. and 626.9541 (1)(i), Florida
Statutes (2014). State Farm moved to dismiss the complaint,
relying on Blanchard v. State Farm Mutual Automobile
Insurance Co., 575 So.2d 1289, 1291 (Fla. 1991), which
held 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." State Farm argued that before a bad faith claim
could be asserted, the Demases were required to obtain an
appraisal award, an arbitration award, or a judgment in an
underlying breach of contract case, which they did not do.
The Demases responded that a first-party bad faith action
ripens when two conditions have been satisfied: (1) the
insurer raises no defense that would defeat coverage; and (2)
the actual extent of the insured's loss has been
determined. They submitted that State Farm's payment of
the insurance policy limits after the expiration of the
sixty-day cure period found in section 624.155 satisfied
those requirements, and was the "functional equivalent
of a determination of liability-in other words . . . the
payment established that [they] had a valid claim."
trial court dismissed the Demases' complaint, reasoning
that it "did not allege there had been a favorable
resolution of an underlying civil action for
insurance benefits against the insurer-whether in the form of
a judgment, arbitration, appraisal, or 'action on the
contract.' The Complaint also fails to allege that the
Defendant's liability for coverage and the extent of
damages has been determined."
Court reviews orders granting motions to dismiss de novo.
E.g., Wallace v. Dean, 3 So.3d 1035, 1045
(Fla. 2009). In assessing the adequacy of the pleading of a
claim, we take the factual allegations in the complaint as
true and draw all reasonable inferences in favor of the
pleader. Jordan v. Nienhuis, 203 So.3d 974, 976
(Fla. 5th DCA 2016); Ray Coudriet Builders, Inc. v. R.K.
Edwards, Inc., 157 So.3d 484, 485 (Fla. 5th DCA 2015).
shall explain, we hold that an underlying action on the
insurance contract is not required for there to be a
determination of the insurer's liability and the extent
of the damages as a prerequisite to filing a statutory bad
faith action. Instead, an insurer's payment of an
insurance claim after the sixty-day cure period provided by
section 624.155(3) constitutes a determination of an
insurer's liability for coverage and extent of damages
under section 624.155(1)(b) even when there is no underlying
of action for first-party bad faith did not exist at common
law. QBE Ins. Corp. v. Chalfonte Condo. Apartment
Ass'n, 94 So.3d 541, 546 (Fla. 2012). In 1982, the
Florida Legislature created a first-party bad faith cause of
action by enacting section 624.155, Florida Statutes, thereby
imposing a duty on insurers to settle their
policyholders' claims in good faith. Ch. 82-243, §
9, Laws of Fla. The statute was "designed and intended
to provide a civil remedy for any person damaged by an
insurer's conduct." QBE Ins. Corp., 94
So.3d at 546. Specifically, section 624.155(1)(a) provides
that "[a]ny person may bring a civil action against an
insurer when such person is damaged" by a violation by
the insurer of certain statutory provisions, including
section 626.9541(1)(i), which prohibits unfair methods of
competition and unfair and deceptive trade practices
regarding claim settlement practices. Section 624.155(1)(b)1.
gives an insured a civil remedy against an insurer for
"[n]ot attempting in good faith to settle claims when,
under all the circumstances, it could and should have done
so, had it acted fairly and honestly toward its insured and
with due regard for her or his interests." The damages
recoverable by the insured in a bad faith action are those
amounts that are the reasonably foreseeable consequences of
the insurer's bad faith, which include, but are not
limited to, interest, court costs, reasonable attorney's
fees, and, in appropriate cases, punitive damages. §
624.155(4), (5), (8), Fla. Stat. (2014).
condition to bringing such a bad faith action, Florida's
Department of Financial Services and the insurer must be
given sixty days' written notice of the claim.
See § 624.155(3)(a), Fla. Stat. (2014).
"The sixty-day window is designed to be a cure period
that will encourage payment of the underlying claim, and
avoid unnecessary bad faith litigation." Talat
Enters., Inc. v. Aetna Cas. & Sur. Co., 753 So.2d
1278, 1282 (Fla. 2000) (citation omitted). This cure period
allows the insurer "a final opportunity 'to comply
with their claim-handling obligations when a good-faith
decision by the insurer would indicate that contractual
benefits are owed.'" Fridman v. Safeco Ins. Co.
of Ill., 185 So.3d 1214, 1220 (Fla. 2016) (quoting
Talat Enters., 753 So.2d at 1284). "[I]f an
insurer fails to respond to a civil remedy notice within the
sixty-day window, there is 'a presumption of bad faith
sufficient to shift the burden to the insurer to show why it
did not respond.'" Id. (quoting Imhof
v. Nationwide Mut. Ins. Co., 643 So.2d 617, 619 (Fla.
1994), receded from in part on other grounds,
State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So.2d
55, 63 (Fla. 1995)). Hence, a statutory bad faith claim under
section 624.155 is ripe for litigation when there has been
(1) a determination of the insurer's ...