In its brief, the U.S. Chamber asked Florida’s Third District Court of Appeals to clarify when a bad faith action becomes ripe under Florida law and whether there can be liability for ‘bad faith’ absent a breach of the insurance contract by the insurer. The brief argues that well-established Florida precedent requires a breach of the insurance contract as an essential prerequisite to a claim for breach of the covenant of good faith and fair dealing, which the legislature applied to insurance contracts by enacting the bad faith statute. The immediate effect of the decision will be to discourage alternative dispute resolution for insurance claims, and to compel settlement of even meritless claims. The brief warns that the costs of such settlements will ultimately be passed on to consumers, increasing premiums, decreasing the availability of insurance, and harming Florida's insurance market and its citizens.
David B. Weinstein of Greenberg Traurig, LLP represented the U.S. Chamber of Commerce as counsel to the U.S. Chamber Litigation Center in this case.
