Florida Court Of Appeals: Insured Who Settled Claim For UM Benefits Still Allowed To Add Bad Faith Claim Against Insurer In The Same Proceeding

by Saul Ewing Arnstein & Lehr LLP

Safeco Ins. Co. of Illinois v. Rader, No. 1D13-2659, 2014 WL 660204 (Fla. Dist. Ct. App. Feb. 21, 2014).

After entry of partial summary judgment on UM claim, insured successfully moved to amend his complaint to add a claim for bad faith.  On review, the appellate court held that the trial court’s actions did not depart from the essential elements of the law in resolving UM claim and retaining jurisdiction over newly-added bad faith claim.

Earle Rader Jr. was in an automobile accident for which another driver was at fault.  Rader had underinsured motorist (“UM”) coverage from Safeco Insurance Company of Illinois (“Safeco”) with a policy limit of $100,000.  With Safeco’s consent and waiver of subrogation rights, Rader settled his bodily injury claim against the other driver for that driver’s policy limits of $25,000.  On February 13, 2012, Rader filed a complaint against Safeco seeking UM benefits under his Safeco policy.  He asserted that Safeco had tendered a settlement offer lower than the UM policy’s limits even though the value of his claim exceeded the limits of the tortfeasor’s coverage and his UM coverage combined.

Safeco failed to respond timely to Rader’s complaint and defaulted.  It finally responded on July 2, 2012,  and the default was set aside.  When Safeco responded, it indicated that it had tendered the $100,000 available under the UM policy to Rader.  It claimed that this tender “operates as a confession of judgment as a matter of law” and that, under Florida law, the court was bound to enter judgment for Rader in the amount of $100,000.  Further, Safeco asserted that the tender caused the court to no longer have jurisdiction over the case, because there were no further issues to decide.

On July 12, Rader filed a motion to amend his complaint to, among other things, add a bad faith claim.  He contended that Safeco’s assertion that it had already confessed judgment was a mere ploy to prevent the court from considering his bad faith claim and force him unnecessarily to file a separate action.  Safeco opposed Rader’s motion to amend and asked the court to enter a final judgment for Rader awarding him the $100,000 UM policy limit, asserting that: 1) a bad faith action is separate from the underlying UM action; and 2) absent a final judgment on the UM claim, the bad faith claim was not yet ripe.

The trial court noted that although Safeco was correct in its contentions,  it was the frequent practice of the courts to allow an insured to amend its complaint to add a bad faith claim and then abate that claim until the underlying claim was resolved.  The court therefore allowed the amendment.  Moreover, because Rader had already settled with the underinsured tortfeasor and Safeco had already tendered the UM policy limits, the court held that partial judgment on the pleadings could be entered on the UM count for $100,000, the limit of the UM policy, once Safeco filed its answer to the amended complaint.  Then, discovery on the bad faith claim could commence and the claim could proceed to trial.  Importantly, the trial court decided that it would not enter an appealable final judgment until the bad faith claim was resolved. 

Safeco attempted to remove the action to federal court, but the U.S. District Court for the Northern District of Florida held that the removal was untimely, rejecting Safeco’s argument that the added claim for bad faith reinstated the 30-day removal period.  Back in the state court, Safeco filed a notice of appeal of the trial court’s order denying Safeco’s motion to enter a final judgment.

The District Court of Appeal for the First District of Florida treated Safeco’s appeal as a petition for writ of certiorari because the trial court’s order was not appealable.  To obtain  a writ, the petitioner must demonstrate, among other things, that the lower court’s ruling represented “a departure from the essential requirements of the law.”  

The District Court of Appeal held that the trial court had not departed from the essential requirements of the law by allowing Rader to amend his complaint to add a bad faith claim even though Safeco had already confessed judgment and tendered the UM policy limit.  The court found that Rader’s settlement with the tortfeasor and Safeco’s tender of the policy limit had the combined effect of causing Rader’s bad faith claim to ripen, because at that point the necessary determinations of coverage and the insurer’s liability had been made.  Furthermore, Rader moved to add his bad faith claim before Safeco moved for a final judgment.  Therefore, the trial court properly resolved the underlying UM claim while retaining jurisdiction over the remaining bad faith claim, and at no point was Safeco required to simultaneously defend both claims.  For this and other reasons, the court denied Safeco’s petition for a writ.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Saul Ewing Arnstein & Lehr LLP | Attorney Advertising

Written by:

Saul Ewing Arnstein & Lehr LLP

Saul Ewing Arnstein & Lehr LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.