Fridman v. Safeco Ins. Co.

Fridman v. Safeco Ins. Co.

Opinion

 [*1215]  PARIENTE, J.

The conflict issue in this case is whether an insured is entitled to a determination of liability and the full extent of his or her damages by first bringing an uninsured/underinsured motorist (UM) action before litigating a first-party [**2]  bad faith cause of action under section 624.155, Florida Statutes (2007). The related issues we address are whether that determination of damages is then binding, as an element of damages, in a subsequent first-party bad faith cause of action against the same insurer, and whether the trial court in this case erred in retaining jurisdiction to allow the insured to file a bad faith cause of action.

In Safeco Insurance Co. of Illinois v. Fridman, 117 So. 3d 16, 19-20 (Fla. 5th DCA 2013), the Fifth District Court of Appeal held that after the insurer tendered the UM policy limits of $50,000 and "confessed judgment" in that amount, the insured's UM action became moot. The Fifth District accordingly vacated the jury verdict that had been reached at the conclusion of the UM trial, setting the insured's damages at $1,000,000.

 [*1216]  The Fifth District's decision conflicts with a long line of cases from this Court that hold that a determination of liability and the full extent of damages is a prerequisite to a bad faith cause of action. See, e.g., Vest v. Travelers Ins. Co., 753 So. 2d 1270, 1275 (Fla. 2000); Imhof v. Nationwide Mut. Ins. Co., 643 So. 2d 617, 619 (Fla. 1994), receded from on other grounds, State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So. 2d 55, 63 (Fla. 1995); Blanchard v. State Farm Mut. Auto Ins. Co., 575 So. 2d 1289, 1291 (Fla. 1991). We have jurisdiction. See art. V, § 3(b)(3), Fla. Const.¹

For the reasons explained in this opinion, we hold that an insured is entitled to a determination of liability and the full extent of his or her damages in the UM action before filing a first-party bad faith action. That determination of damages is then binding, as an element of damages, in a subsequent first-party bad faith action against the same insurer so long as the parties have the right to appeal any properly preserved errors in the verdict. The history of first- and third-party bad faith actions, this Court's precedent, and the legislative intent to eliminate the distinction between first- and third-party bad faith claims all support our conclusion. We also conclude that the trial court in this case did not err in retaining jurisdiction to allow the filing of a bad faith cause of action. Accordingly, we quash the Fifth District's decision and remand for further proceedings consistent with this opinion.

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