January 14, 2019

In December 2018, the U.S. District Court for the Southern District of Florida dismissed, without prejudice, another bad faith claim brought by an insured against his insurer that the court found to be “premature.” The case is Aligned Bayshore Holdings, LLC v. Westchester Surplus Lines Ins. Co., Civil Action No. 18-21692-Civ-Scola, 2018 U.S. Dist. LEXIS 207823 (S.D. Fla. Dec. 10, 2018).

On September 10, 2017, Aligned Bayshore Holdings, LLC sustained losses due to the impacts of Hurricane Irma. Aligned notified its insurer, Westchester Surplus Lines Ins. Co., of its losses. Westchester did not promptly pay for all covered losses and Aligned served a Civil Remedy Notice, which Westchester did not rectify within the required 60-day period under Fla. Stat. § 624.155. Aligned filed a breach of contract action, including one count of bad faith. Westchester moved to dismiss the bad faith count, arguing that the allegations were premature without a coverage decision. The insured agreed that the bad faith count may have been premature, but argued that instead of dismissed, the count should be abated “in the interests of judicial economy”.