Mediator/Coverage Counsel Perspectives – Mediating Coverage Issues
August 11, 2022
In Florida, an insured cannot bring a first-party bad faith claim based on a claim for UM coverage unless the insured first files a Civil Remedy Notice (CRN) with the Florida Department of Financial Services. In Mathurin v. State Farm, Butler recently vindicated the importance of this step by winning dismissal of a first-party bad faith action where the CRN did not match up with the Complaint.
A CRN is a prerequisite to any Florida first-party bad faith action. The CRN gives an insurer one last opportunity to “cure” an alleged violation of Florida’s bad faith statute and avoid a bad-faith lawsuit. But only a specific and properly drafted CRN provides an insurer with sufficient notice of the alleged statutory violations giving rise to a potential bad faith action. The Court in Mathurin held that the insured’s CRN did not support the particular UM bad faith action filed against State Farm and dismissed the bad faith case.
In Mathurin, the plaintiff’s decedent was involved in a fatal accident while driving a taxicab belonging to his employer. The accident gave rise to two UM coverage claims under two State Farm auto policies, each insuring one of two household cars—a Nissan Quest and a Honda Civic. An attorney acting on behalf of the estate filed a CRN identifying the Nissan Quest policy but not the Honda Civic policy. Later, represented by different counsel, the estate prevailed in a coverage action under the Honda Civic policy but not the Nissan Quest policy.
The estate then sued State Farm for bad faith, contending that State Farm had handled the claim under the Honda Civic policy in bad faith. State Farm, in lieu of answering the bad faith claim, immediately moved for summary judgment, arguing that the CRN listing the Nissan Quest policy could not be used to satisfy the condition precedent for a bad faith claim under the Honda Civic policy.
The Court granted the carrier’s motion for summary judgment and dismissed the bad faith Complaint, agreeing with the carrier that a bad-faith lawsuit must be preceded by a CRN pertaining to and referencing the same policy that underlies the lawsuit, and not another policy.