“Bad faith” is a legal theory under which a person can sue an insurer for wrongly refusing to pay an insurance claim. In Cabrera v. MGA, the U.S. District Court for the Middle District of Florida explains that, in order to sue an insurer for bad faith, you must first establish that the company should have paid out the claim.
Mr. and Ms. Cabrera were involved in a car accident with Ms. Jimmie in September 2003 and alleged that they suffered personal injury and property damages as a result of the collision. The filed a claim with MGA, Jimmie’s insurer, two months later. MGA denied the claim, however, explaining that Jimmie’s auto insurance policy was void because she provided false information to the company in an application before the policy was issued. The Cabreras later sued Jimmie in state court and were ultimately awarded more than $504,600 in damages.
Jimmie then assigned her rights under the insurance policy with MGA to the Cabreras. In turn, they sued the company in federal court, asserting that MGA had engaged in bad faith by denying their previous claim.
Dismissing the complaint, the District Court said the Cabreras failed to adequately provide the grounds on which they were allegedly entitled to relief. “The facts as pled must state a claim for relief that is plausible on its face,” the Court explained, citing the 2009 decision by the U.S Court of Appeals for the 11th Circuit in Sinaltrainal v. Coca-Cola Co. “Dismissal is warranted under [the Federal Rules of Civil Procedure] if, assuming the truth of the factual allegations of plaintiff’s complaint, there is a dispositive legal issue which precludes relief.”
Here, the Court said the dispositive issue precluding relief was whether MGA was actually liable for coverage under Jimmie’s policy. Although the Cabreras originally requested a declaratory judgment finding that they were entitled to coverage under the policy and alleged that MGA breached the policy by denying the claim, they later filed an amended complaint stating only a claim for bad faith, according to the Court. Without first determining whether the company was required to pay the claim under the policy, the Court said it couldn’t determine whether MGA had acted in bad faith.
“The Amended Complaint is not sufficient to survive a motion to dismiss regarding the issue of bad faith because the case law is clear that coverage disputes must be resolved before a bad faith action accrues,” the Court explained. As a result, the Court granted MGA’s motion to dismiss the complaint.
While this case might seem like much ado about technicalities and legal intricacies, it is precisely one of the reasons why a person seeking to go after an insurance company in court must seek the advice and counsel of a competent, experienced personal injury attorney. The best way to deal with an insurance bad faith claim in Florida is to avoid it altogether. The South Florida car insurance attorneys at Anidjar & Levine, have vast experience representing clients in car accident cases and insurance disputes throughout the area, including in Boca Raton, Pompano Beach and Hialeah. Call us at 800-747-3733 for a free consultation.
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