Eric S. Olson | Naples Personal Injury Lawyer

Statute of Limitations on Bad Faith Claims

What happens if you are involved in a car accident and the at-fault party’s insurance company either refuses to cover your claims or refuses to defend the insured?  You may have a claim for bad faith against the at-fault party’s insurance company if you obtain a judgment against the at-fault party.  How does this work, you might ask, and when do you need to file suit against the at-fault party’s insurance company for bad faith?

First, you will need to sue the at-fault party.  If the at-fault party’s insurance company refuses to cover or defend the claims, you will need to obtain a judgment against the at-fault party.  This can be done through trial or through a negotiated consent judgment referred to as a Coblenz agreement, in which the parties agree to the amount of damages and the right to collect against the insurance company is assigned to the injured party.  Then, you will need to file suit against the at-fault party’s insurance company for bad faith.  But what if a lot of time has passed between the accident, the denial of coverage, and the judgment?  You may run into a statute of limitations issue, and the insurance company may try to dismiss the claims based on timing.  This happened in a recent case from Florida’s Fourth District Court of Appeal.

In Butler v. Florida Peninsula Ins., Co., 4D20 (February 17, ), the injured party sued the insurance company for bad faith after entering into a consent judgment with the insured and receiving the right to collect a $100,000 judgment against the insurance company.  the insurance company moved for summary judgment, arguing that the case was barred by the statute of limitations because the insured, whose claim the injured party had asserted, was required to file an action against the insurance company within five years of its denial of coverage and request to defend in the underlying personal injury lawsuit.  The trial court granted summary judgment in favor of the insurance company.

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The Fourth DCA reversed an entry of summary judgment in favor of the insurer based on a determination that the plaintiff’s action was barred by the statute of limitations.  The statute of limitations began to run not at the time the insurer refused to cover the defendant insured, but at the time when damages were fixed by the entry of the agreed judgment.

It is important to hire an experienced Naples Personal Injury Attorney at Cardinal Law, P.A. to deal with these and other complicated issues, and to pay attention to the timing of important litigation deadlines.