Bad Faith Bulletin June 9, 2012

As a service to our clients and colleagues, Cole, Scott & Kissane, P.A., from time to time, will advise as to significant cases and/or developments in the area of insurance law.

One such development occurred last week with the Supreme Court’s decision in QBE Ins. Corp. vs. Chalfonte Condominium Apartment Association, Inc. 2012 W.L. 1947863 (Fla. 2012). In the Chalfonte decision, the Florida Supreme Court answered several questions which had been certified to it by the Eleventh Circuit Court of Appeals. One of those questions involved whether an insured could bring a claim for breach of the implied warranty of good faith and fair dealing under the insurance policy prior to the accrual of a bad faith cause of action. In insurance contract litigation in Florida it had become commonplace for insureds to include, as part of their breach of contract action, a claim for breach of the implied warranty of good faith and fair dealing. In effect, these claimants were trying to file a premature bad faith action by disguising it as a contractual breach of the implied covenant of good faith and fair dealing.

The Florida Supreme Court has ruled that first party claims for breach of the implied covenant of good faith and fair dealing are effectively statutory bad faith claims which must be brought exclusively pursuant to Florida Statute §624.155. This effectively means that any claim, in a first party insurance action, for breach of the implied covenant of good faith and fair dealing, would be premature and improper, as such claims must await determination of both coverage and damages in the underlying action. Upon conclusion of the underlying action, such a claim may thereafter be filed, however, it must be pursued pursuant to Florida Statute §624.155. Any such claim will require the filing of a Civil Remedy Notice providing the carrier with a sixty (60) day right to cure.

The Chalfonte Court also determined that the failure of an insurance carrier to have hurricane deductible language in a certain type size as required by Florida Statute §627.701(4)(a) did not void the policy’s deductible. The Court concluded that since the legislature had not provided for a penalty for failure to comply with the type size requirement established in §627.701(4)(a) that there was no basis upon which to declare the hurricane deductible void.

Should you have any questions concerning the holdings or implications of the Chalfonte decision please contact Joe Kissane in the firm’s Jacksonville office at telephone number (904) 672-4031 or email

Our team is available to discuss the topics written here and ready to provide additional information contained in this article. Contact us for more information.

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