Insured Can’t Try Bad Faith Claims with Insurance Coverage (Breach of Policy) Case
In Florida, an insured cannot try its breach of insurance contract case (the coverage dispute) with its bad faith claim or dispute. See Universal Property & Casualty Co. v. Naze, 50 Fla.L.Weekly D1208a (Fla. 4th DCA 2025). It’s putting the cart before the horse.
In Naze, bad faith claims against the insurer were not claimed, but at trial, the insured used opening argument, closing argument, and testimony to go into the insurer’s “bad faith” claims handling process. The insurer objected and moved for a mistrial, which was denied. The appellate court reversed and remanded the case for a new trial finding the claims handling evidence irrelevant to the coverage dispute: “By admitting this irrelevant evidence, the insured was able to paint the insurer in a bad light and suggest its bad faith in handling the claim.” Naze, supra. The appellate court, by finding the evidence irrelevant, found that its probative value was NOT outweighed by the danger of unfair prejudice or misleading of the jury. In other words, the jury could overlook the insurance coverage dispute and render its verdict based on its feelings of the “bad faith” evidence which didn’t go to the breach of contract dispute.
Regardless of whether this evidence was actually prejudicial or simply added color and helped refute an affirmative defense (which is what the trial court found) is another story. The story here is that good ole evidentiary rule dealing with relevant evidence: “Relevant evidence is inadmissible if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of issues, misleading the jury, or needless presentation of cumulative evidence.” Naze, supra (citation omitted). Here, the appellate court found the probative value of this claims handling evidence was substantially outweighed by the prejudice to the insurer.
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.
