In State Farm Florida Insurance Co. v. Seville Place Condominium Association, 2011 Fla. App. Lexis 11314 (Fla. 3d DCA July 20, 2011) Florida’s Third District Court of Appeal granted motions for rehearing and rehearing en banc and withdrew its prior October 14, 2009 opinion in the same case.  At issue in the case is, among other issues, the principle under Florida law that statutory bad faith claims are premature until there has been an adjudication of liability and extent of damages in the underlying contract action.

In Seville Place, the insured condominium association submitted a windstorm claim to its property insurer following Hurricane Wilma.  After a protracted dispute involving contractual appraisal, an appraisal panel awarded substantial damages to the insured.  The trial court then determined that the insured was permitted to proceed with a statutory bad faith cause of action immediately following the issuance of the final appraisal award.

The insurer appealed the trial court’s decision via writ of certiorari, which resulted in the original October 14, 2009 opinion affirming the trial court’s decision.  The insurer filed motions for rehearing, rehearing en banc and for certification to the Florida Supreme Court.  A substituted opinion was recently issued.

In the substituted opinion, the Court ultimately denied the writ of certiorari on the basis that “no irreparable injury had yet occurred” to State Farm.  The Court stated, “[f]or an appellate court to review a nonfinal order by petition for certiorari, the petitioner must demonstrate that the trial court departed from the essential requirements of law, thereby causing irreparable injury which cannot be adequately remedied on appeal following final judgment.”  Accordingly, while the Court acknowledged the principle that statutory bad faith claims are premature until liability and extent of damages are established, it declined to opine further based upon the facts of the case.

The Court noted that the insurer was only appealing an order allowing amendments to a complaint and an order denying reconsideration of that order.  The substituted opinion states that on the record before the Court, “no discovery pertaining to the bad faith claims or the punitive damages claim has yet been sought or compelled, and State Farm has not yet responded to the second amended complaint.”  Thus, the Court found that no irreparable injury had yet occurred upon an amendment to add a bad faith claim and it could not consider the appeal.

For a copy of the opinion, please click here.