Opinion ID: 1694656
Heading Depth: 1
Heading Rank: 5

Heading: the bad faith standard

Text: Long ago, we explained an insurer's responsibilities in settling claims. In Boston Old Colony Insurance Co. v. Gutierrez, 386 So.2d 783, 785 (Fla.1980), we stated that an insurer must investigate the facts, give fair consideration to a settlement offer that is not unreasonable under the facts, and settle, if possible, where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so. Id. at 785 (emphasis added). To establish a breach of this duty, claimants must demonstrate more than mere negligence; they must prove the insurer acted in bad faith. Id. That is, the evidence must show that the insurer breached its fiduciary duty to the insured by  wrongfully refusing to settle the case within the policy limits, and exposing its insured to a judgment which exceeds the coverage provided by the policy. Dunn v. National Sec. Fire & Cas. Co., 631 So.2d 1103, 1106 (Fla. 5th DCA 1993) (emphasis added). [13] Thus, the jury was instructed in this case as follows: An insurance company acts in bad faith in failing to settle the claim against its insured within its policy limits when under all the circumstances it could and should have done so had it acted fairly and honestly towards its insured and with due regard for his or her interest. (Emphasis added.) See § 624.155, Fla. Stat. (1995) (defining statutory bad faith cause of action). Clearly mistakes and miscues do not meet this standard. Because this standard requires the examination of the totality of the circumstances, the issue of bad faith ordinarily is one of fact for the jury. See Gutierrez, 386 So.2d at 785. As with many other issues that usually are questions of fact, however, the issue of bad faith may be determined as a matter of law when the facts are undisputed. Florida courts regularly uphold summary judgments when the undisputed facts demonstrate that the insurer could not have acted in bad faith. See, e.g., State Farm Fire & Cas. Co. v. Zebrowski, 706 So.2d 275, 277 (Fla.1997) (reinstating summary judgment in favor of insurer because the carrier has a duty to settle when it is in the insured's best interest, not when it is in the claimant's best interest); RLI Ins. Co. v. Scottsdale Ins. Co., 691 So.2d 1095, 1096-97 (Fla. 4th DCA 1997) (affirming summary judgment for the insurer on the bad faith claim because it at no time missed an opportunity to settle which would have put it in a bad faith posture); Caldwell v. Allstate Ins. Co., 453 So.2d 1187 (Fla. 1st DCA 1984) (affirming summary judgment in favor of insurer on bad faith claim but reversing on other grounds). This case, too, may be resolved as a matter of law because the undisputed facts viewed under the standard enunciated above demonstrate that Infinity could not have acted in bad faith. Infinity agreed to settle the case within Taylor's arbitrary deadline but could not, consistent with its obligations to the insured, tender payment of the settlement funds until Taylor could legally release the estate's and the minor's claims against the insured.