Gordon & Rees Partner Matt Foy Appointed Vice Chair of DRI Insurance Law Committee

By on November 13, 2014

DRI – The Voice of the Defense Bar, the leading organization of defense attorneys and in-house counsel, has appointed Gordon & Rees San Francisco partner Matthew S. Foy as vice chair of DRI’s Insurance Law Committee.

In a Sept. 11 letter to Foy announcing his vice chair appointment, DRI president-elect John Parker Sweeney noted the appointment is for a one-year term, effective at the conclusion of DRI’s Oct. 22-26 Annual Meeting, held at the San Francisco Marriott Marquis.  The appointment paves the way for Foy’s selection as chair of the Insurance Law Committee in 2016.  In addition to the Insurance Law Committee, Foy is a member of DRI’s Commercial Litigation, Intellectual Property Litigation and Steering Committees.

Foy is the co-national practice group leader for the firm’s property and casualty insurance practice as well as the practice group leader of the San Francisco insurance group. He has more than 15 years of experience representing national insurers at the claims stage, in trial and on appeal. Foy’s practice focuses on insurance coverage and bad-faith litigation and advice involving primary and excess liability policies with an emphasis on complex personal and advertising injury, cyber-liability, environmental, asbestos, other mass torts, and construction defect matters. He also handles all aspects of insurance cases involving professional liability insurance, inland marine, first-party property, and life, health, and disability matters. He assists clients with drafting policy language and claims manuals and provides in-house client seminars on coverage and claims handling issues, as well as litigation planning. In addition to his insurance practice, Foy represents corporate clients in connection with contract negotiation, dispute resolute, and related litigation.

Foy is a frequent speaker on issues confronting the insurance industry and he recently contributed a chapter in DRI’s 2014 “Coverage B: Personal and Advertising Injury Compendium.”

Filed under Uncategorized

Florida District Court Finds That Settlement Can Trigger Bad-Faith Claim

By and on November 11, 2014
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Florida’s Fourth District Court of Appeal recently ruled that an insured need only establish an insurer’s coverage obligation and the extent of damages, and not the insurer’s liability for breach of contract, to be permitted to proceed with a bad-faith claim under Section 624.155(1)(b)1 of the Florida Statutes.

INS BLOG_hurricaneIn Cammarata v. State Farm Florida Insurance Co., 2014 Fla. App. Lexis 13672 (September 3, 2014), the insureds (homeowners) were two of many South Florida residents who sustained damages as a result of Hurricane Wilma, which hit the coast on October 24, 2005.  Nearly two years later, the insureds filed a claim with their homeowners’ insurer.  The insurer inspected the home and, having estimated the amount of damages to be lower than the policy deductible, advised that the policy had not been triggered.  The parties then participated in an appraisal process, with the insureds’ appraiser submitting an estimate higher than the policy deductible and the insurer’s appraiser submitting an estimate lower than the policy deductible. Pursuant to the policy, the insureds filed a petition requesting that the circuit court appoint a neutral umpire.  The umpire issued an estimate higher than the policy deductible (although lower than the insureds’ appraiser’s estimate), and the insurer paid the amount, minus the deductible.  The insureds then filed a bad-faith action against the insurer under Section 624.155(1)(b)1 of the Florida Statutes.

The parties filed cross-motions for summary judgment.  In its motion, the insurer argued that because its liability for breach of contract had not been determined the insureds’ bad-faith action was not ripe.  In response, the insureds argued that only an insurer’s liability for coverage and the extent of the damages covered must be determined for a bad-faith claim to mature.  The trial court granted the insurer’s motion.

The Fourth District Court of Appeal reversed, holding that the determination of the existence of liability and the extent of an insured’s damages are the conditions precedent to a bad-faith action, and that those conditions may be established by a settlement paid by the insurer.  In so holding, the Fourth District receded from its prior decision in Lime Bay Condominium, Inc. v. State Farm Florida Insurance Co., 94 So.3d 698 (Fla. 4th DCA 2012), relied upon by the insurer, in which the Fourth District held that an insurer’s liability for breach of contract must be determined before a bad-faith action becomes ripe, harmonizing that decision with its decision in Trafalgar at Greenacres, Ltd. v. Zurich American Insurance Co., 100 So.3d 1155 (Fla. 4th DCA 2012), in which the Fourth District ruled that an appraisal award issued after an insured filed a breach of contact claim satisfied the necessary prerequisite of obtaining a “favorable resolution” prior to filing a bad-faith claim.

In Cammarata, the Fourth District relied upon the Florida Supreme Court’s decisions in: 1) Blanchard v. State Farm Mutual Automobile Insurance Co., 575 So.2d 1289 (Fla. 1991), addressing an insurer’s claim that an insured must bring a bad-faith claim together with an underlying breach of contract claim, in which the court held that “[a]bsent a determination of the existence of liability . . . and the extent of the [insured’s] damages, a cause of action cannot exist for bad faith”; and 2) Vest v. Travelers Insurance Co., 753 So.2d 1270 (Fla. 2000), addressing a claim for bad faith based upon an insurer’s payment of policy limits after the filing of a bad-faith action, in which the court held that the existence of liability and the extent of an insured’s damages can be established based “upon a settlement,” thereby ripening a bad-faith claim.

The Fourth District Court of Appeal reversed and remanded for reinstatement of the insureds’ bad-faith action, noting that it was not taking any position on whether that action has any merit.

Image courtesy of Flickr by NASA Goddard Space Flight Center.

Filed under Appraisal, Bad Faith