Sunday, February 20, 2011

Bad faith count is stayed pending appeal of contract breach - Bolen

A bad faith claim is frozen until the carrier's appeal on the underlying contract breach count has been finally determined, ruled a Florida appeals court in Illinois National Ins. Co. v. Bolen (Fla. 5th DCA, Feb. 4, 2011).  After verdict was rendered against the carrier on an uninsured motorist claim, the trial court permitted the insured to move forward on its bad faith claim while the carrier appealed.  The appeals court reversed, supporting the carrier's argument that "because the appeal was pending, there had been no final determination of liability and damages on the UM claim; therefore, lifting the abatement would be premature."

The appeals court relied on XL Specialty Ins. Co. v. Aircraft Holdings, LLC (Fla. 1st DCA 2006), which concluded that "there should be no discovery [on the bad faith claim] until the underlying breach of contract action has been resolved [on appeal]."

This summary was prepared by Perry Cone and is posted at

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