Cammarata v. State Farm

Case Updates

The Chamber asked Florida’s Fourth District Court of Appeals to clarify when, under Florida law, a bad faith action becomes ripe, and whether there can be liability for ‘bad faith’ absent a breach of the insurance contract by the insurer. The brief argues that the Court’s decision in this case overlooks important standards of Florida law by holding that an insurer’s coverage obligation, and not its liability for breach of contract, must be determined before an insured can bring a bad faith action against the insurer. The brief points out that well-established Florida precedent requires a breach of the insurance contract as an essential prerequisite to any claim for breach of the covenant of good faith and fair dealing, which the legislature applied to insurance contracts by enacting the bad faith statute. The immediate effect of the decision will be to discourage alternative dispute resolution for insurance claims and to encourage litigation. If any payment under the contract is sufficient for an insured to bring a bad faith claim, then the utility of the appraisal process is greatly reduced. At a minimum, insurers may be forced to enter into settlements that would not otherwise be warranted simply to avoid the risks of litigation.

The Chamber warns that the costs of such settlements will ultimately be passed on to consumers; increasing premiums, decreasing the availability of insurance, and harming Florida's insurance market and its citizens. The brief asserts that the court should ultimately grant rehearing, vacate its opinion in Cammarata, and issue a revised decision reaffirming its prior ruling in Lime Bay; or certify this matter for review by the Florida Supreme Court.

David B. Weinstein and Jonathan S. Tannen of Greenberg Traurig LLP represented the U.S. Chamber of Commerce as co-counsel to the U.S. Chamber Litigation Center.