Opinion ID: 76999
Heading Depth: 2
Heading Rank: 1

Heading: The Cure Issue

Text: 20 In Talat, this Court asked the Florida Supreme Court to determine whether payment of all contractual damages within 60 days of a CRN precluded a statutory first party bad faith claim for extra-contractual damages suffered prior to the CRN. 753 So.2d at 1280. The Florida Supreme Court held that an insurer need not immediately pay 100% of the damages claimed to flow from bad faith conduct in order to effect a cure under § 624.155. Id. at 1282. However, Talat is distinguishable from the present case because it involved a first party bad faith claim in which there was no danger of an excess judgment. This distinction is suggested by the Talat court's statement that [t]o cure an alleged violation and to avoid a civil action, an insurer must pay the claim (sometimes in excess of policy limits in the third-party context) before the sixty days expire. Id. (emphasis added). While this statement is dicta, it leaves open the possibility that an insurer may not be able to effect a cure by simply tendering the policy limits in the third party context. 21 Opinions from Florida's intermediate appellate courts do little to clarify the issue. The Fifth District Court of Appeal has stated that an insurer effects a cure under § 624.155 when it tenders the policy limits after learning of a third party's intent to file suit for bad-faith failure to settle. See Clauss v. Fortune Ins. Co., 523 So.2d 1177, 1179 (1988). However, the primary holding in Clauss was that the insurer was entitled to summary judgment because it had not violated its duty of good faith. Id. Even if the alternative holding in Clauss rested squarely on the cure issue, it would be in tension with a subsequent case from the Third District Court of Appeal. In Hollar v. International Bankers Insurance Company, 572 So.2d 937, 939 (1990), the Third District rejected an insurer's self-serving reading of the term `damages' as being confined to policy limits. The court went on to state that, because the function of the bad-faith claim is to provide the insured with an extra contractual remedy[,] ... a tender of policy limits will not ordinarily satisfy the insured's full claim of damages for a bad-faith claim. Id. at 939-40. When read in conjunction, Clauss and Hollar offer no clear guidance on the questions currently before this court. 22 The only potentially relevant federal court opinion is Francois v. Illinois National Insurance Company, No. 01-8070 (S.D.Fla. Mar. 28, 2002), aff'd without opinion, 49 Fed.Appx. 290 (11th Cir.2002). The facts in Francois were virtually indistinguishable from those in Clauss, and the district court followed Clauss in holding that the insurer had effected a cure pursuant to § 624.155. Id. at -7. However, as in Clauss, the Francois court alternately held that the insurer was entitled to summary judgment because it had not acted in bad faith. Id. at . Given its status as an alternative holding in an unpublished district court opinion, 4 Francois is of little persuasive value in this case. Because we are left with only the conflicting statements in Clauss and Hollar, we conclude that it is appropriate to certify the issue to the Florida Supreme Court. 23