Florida Appellate Court Holds That Appraisal Award Constitutes A 'Favorable Resolution' And Permits Insured To Pursue Bad Faith Claim

The Florida District Court of Appeal, Fourth District, recently held that an appraisal award in favor of an insured constitutes the "favorable resolution" of an action for insurance benefits necessary to proceed with a statutory first-party bad faith action under Florida law. Trafalgar v. Zurich Ins. Co., 2012 WL 3822215 (Fla. App. 4 Dist. Sept. 5, 2012).

Underlying Facts

Trafalgar, the plaintiff/insured, submitted a claim to Zurich Ins. Co., the defendant/insurer, for damage sustained to its shopping center during Hurricane Wilma. After beginning its investigation, the insurer issued two payments to Trafalgar totaling $580,856.40. Subsequently, in June 2006, the plaintiff submitted a sworn statement in proof of its loss, claiming $1,826,938.54 in damages. After the insurer responded to the proof by advising that it was continuing to investigate the claim, the plaintiff filed suit, alleging that the insurer breached the policy by failing to pay all proceeds claimed and due. One month after the complaint was filed, the insurer informed the plaintiff that it had completed its...