Bad faith claims with UM claims: Abate or dismiss?

Recently, a federal district court in Florida ruled that, in federal court, bad faith claims asserted within a lawsuit for uninsured motorist coverage benefits should be dismissed rather than abated. Shvartsman vs. GEICO Gen Ins. Co., 2017 WL 2734083 (M. D. Fla., filed June 23, 2017). This is another good reason to remove lawsuits for UM benefits from state court to federal court where such is possible.

Although the federal district judge stated that, according to the decision in Fridman v. Safeco Ins. Co. of Illinois, 185 So.3d 1214, 1229 (Fla. 2016), “the Supreme Court of Florida favors abatement of unripe bad faith claims over dismissal,” this is not the way I read Fridman. While the Fridman court did say that “abatement is an appropriate procedural device” (id. at 1230), it also said that another appropriate procedural device would be for the trial court to reserve jurisdiction to allow amendment of the UM benefits complaint to add a bad faith claim after the conclusion of the UM proceedings. Id. Under this procedural scenario, a trial court would be free to dismiss the bad faith claim without prejudice when the bad faith claim is pled with the UM claim. Likewise, where the plaintiff seeks to amend the UM complaint to add a bad faith claim, the trial court could properly deny the motion but reserve jurisdiction to allow the amendment at a later, more appropriate time.

Regardless, if federal district judges adopt the view of the judge in Shvartsman, they will dismiss bad faith claims when pled with UM claims rather than abate the bad faith claims pending the outcome of the UM claim.

By Steve O"Hara

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