STATUTE OF LIMITATIONS IN BAD FAITH CASE BEGAN TO RUN NOT AT THE TIME THE INSURER REFUSED TO PROVIDE COVERAGE OR DEFEND, BUT AT THE TIME THE PLAINTIFF’S BAD FAITH CLAIM BECAME COGNIZABLE
Butler v. Florida Peninsular Ins. Co., 46 Fla. L. Weekly D375 (Fla. 4th DCA February 17, 2021):
Plaintiff sued the insurance company after the defendant insured entered into a Coblentz settlement with the plaintiff, stipulating to a consent judgment, and assigning the plaintiff the right to collect a judgment of $100,000 against the insurance company.
In the operative complaint, the plaintiff alleged one count of bad faith against the insurance company for denying coverage and its failure to defend the insured. The insurance company moved for summary judgment, arguing that the action was time barred because the insured was required to file an action against the insurance company within five years of the denial of coverage and the request to defend the underlying suit.
The trial court agreed and granted summary judgment for the insurance company.
The plaintiff argued that the statute of limitations actually began to run, not at the time the insurance company refused to provide coverage and defend, but at the time that the plaintiff’s bad faith claim (as the assignee of the insured) became cognizable, which is when damages were fixed by the entry of the agreed judgment based on the Coblentz settlement.