MARAIST v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Filing 10

ORDER DISMISSING THE BAD-FAITH CLAIM: Motion to Dismiss bad-faith claim is GRANTED without prejudice to its assertion after a sufficient determination of the underlying claim. I do not direct the entry of judgment under Federal Rule of Civil Procedure 54(b). Signed by JUDGE ROBERT L HINKLE on 8/13/2012. (jws)

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IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF FLORIDA
TALLAHASSEE DIVISION

PAUL MARAIST,
Plaintiff,
v.

CASE NO. 4:12cv266-RH/CAS

STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
Defendant.
______________________________________/

ORDER DISMISSING THE BAD-FAITH CLAIM

This case presents the question whether an insured may pursue a bad-faith
claim against his underinsured-motorist insurer before resolution of the underlying
claim for underinsured-motorist benefits. Under settled Florida law, the answer is
no. This order grants the insurer’s motion to dismiss the insured’s bad-faith claim.
A victim who is injured in a motor-vehicle crash caused by another person’s
negligence ordinarily can recover the resulting damages. The person responsible
for the damages in the first instance is the person whose negligence caused the
crash—the tortfeasor. If the tortfeasor has liability insurance, the tortfeasor’s
insurer is responsible for the damages. If the tortfeasor is uninsured or
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underinsured—that is, has insufficient liability coverage to pay the victim’s
damages—the victim may be able to recover from the victim’s own insurer, under
the insurer’s uninsured- or underinsured-motorist coverage.
The plaintiff Paul Maraist alleges that he suffered damages of more than
$200,000 in a vehicle crash caused by the negligence of a driver with $100,000 in
liability coverage. Mr. Maraist had $100,000 in underinsured-motorist coverage
through the defendant State Farm Mutual Automobile Insurance Company. The
negligent driver’s insurer paid Mr. Maraist its $100,000 limits. State Farm refused
to pay Mr. Maraist its $100,000 in underinsured-motorist coverage. State Farm
denies its liability for that amount.
By his complaint in this case, Mr. Maraist asserts two claims against State
Farm. First, Mr. Maraist demands the $100,000 in underinsured-motorist
coverage. Second, Mr. Maraist demands additional damages for State Farm’s badfaith failure to promptly evaluate and pay the claim. State Farm has moved to
dismiss the bad-faith claim on the ground that it is premature.
Under Florida law, an insurer has a duty to promptly evaluate an insured’s
claim and to pay the claim if well founded. An insurer who acts in bad faith may
be held liable to the insured not only for the amount due on the claim but also for
damages caused by the insurer’s bad faith. But when an insurer denies that it is
liable on a claim under its policy, a bad-faith claim will not lie until it is first

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determined that the insurer is in fact liable under the policy. See, e.g., Blanchard v.
State Farm Mutual Automobile Insurance Co., 575 So.2d 1289 (Fla.1991).
Here there has been no determination that Mr. Maraist suffered damages in
excess of the $100,000 he recovered from the tortfeasor’s insurer and thus no
determination that State Farm is liable to Mr. Maraist on the underinsured-motorist
coverage. Until there has been such a determination, Mr. Maraist cannot pursue a
bad-faith claim. Blanchard is controlling.
In arguing the contrary, Mr. Maraist makes three assertions that deserve
mention. First, Mr. Maraist says his medical expenses standing alone exceed
$100,000. Perhaps. But Mr. Maraist saying it does not make it so. In cases like
this the insured always says the damages exceed the tortfeasor’s coverage.
Blanchard requires not an allegation but a determination.
Second, Mr. Maraist emphasizes the willingness of the tortfeasor’s insurer to
pay its $100,000 limits. But the tortfeasor’s insurer’s willingness to pay $100,000
does not mean that Mr. Maraist’s damages exceeded that amount. And in any
event, the tortfeasor’s insurer’s unilateral analysis of the claim does not bind State
Farm.
Finally, Mr. Maraist cites Vest v. Travelers Insurance Co., 753 So. 2d 1270
(Fla. 2000). There the plaintiff was injured in a vehicle crash, and the tortfeasor’s
insurer paid its liability limits. The plaintiff’s underinsured-motorist carrier—

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Travelers Insurance Co.—initially refused to pay more. To that point the case was
like this one. But in Vest, unlike here, the plaintiff and tortfeasor entered a
settlement establishing the full amount of the plaintiff’s damages, and Travelers
approved the settlement. The settlement determined the amount of the plaintiff’s
damages, thus determined Travelers’ liability on its underinsured-motorist
coverage, and thus allowed the plaintiff to assert a bad-faith claim against
Travelers based on its initial failure to promptly evaluate and pay the amount due
on the underinsured-motorist coverage. This was fully consistent with Blanchard.
Vest establishes that if indeed State Farm has failed to promptly evaluate and
pay amounts due to Mr. Maraist on the underinsured-motorist coverage, then in
due course—after State Farm’s liability on the underinsured-motorist coverage has
been determined—Mr. Maraist will be able to assert a bad-faith claim. Vest does
not undermine the holding in Blanchard that the bad-faith claim cannot go forward
until State Farm’s underlying liability has been determined. On the contrary, Vest
explicitly states that it “continue[s] to hold with Blanchard that bringing a cause of
action [alleging bad faith] is premature until there is a determination of liability
and extent of damages owed on the first party insurance contract.” Id. at 1276.
For these reasons,
IT IS ORDERED:

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The motion to dismiss the bad-faith claim is GRANTED. The bad-faith
claim is dismissed without prejudice to its assertion after a sufficient determination
of the underlying claim. I do not direct the entry of judgment under Federal Rule
of Civil Procedure 54(b).
SO ORDERED on August 13, 2012.
s/Robert L. Hinkle
United States District Judge

Case No. 4:12cv266-RH/CAS