Disagreements over claim value are not per se bad faith

In Susan Davis v. State Farm, Case # 6:23-cv-1145-WWB-DCI , the U.S. Middle District of Florida recently granted summary judgment in favor of State Farm in a third-party bad-faith action arising from a 2020 auto collision where the claimant repeatedly demanded the $50,000 BI limits,  and later obtained a $3,000,000 consent judgment against the insured.

 

The court held that a mere disagreement over claim valuation is not per se bad faith, and the record showed that State Farm did not learn of the severity of the injuries and the surgical recommendations until after suit was filed—at which point the claimant admittedly would no longer settle for policy limits. The court noted that because the medical records showing a surgical recommendation weren’t shown to have been provided to State Farm pre-suit, and the demand’s list of “customary per diem” noneconomic figures lacked medical support, the plaintiff failed to create a triable issue that State Farm unreasonably undervalued the claim or that State Farm had a realistic chance to settle the claim within the policy limits before litigation.

 

The court also found State Farm generally fulfilled its communication duties to its insured under Boston Old Colony, and that any lapses identified (including an adjuster’s mistaken note about added bills) did not cause the excess judgment. The court held that, at most, the adjuster’s conduct reflected negligence, which is insufficient to establish bad faith. 

 

The take away- Florida bad-faith claims continue to turn on causation and opportunity: if the carrier lacks pre-suit notice of surgical severity (or other material valuation drivers) and the claimant will not settle within limits once suit is filed, excess exposure cannot be attributed to bad faith.