PRATT v. LM GENERAL INSURANCE COMPANY (2025)

Order

This cause came before the Court for consideration without oral argument on Defendant's Motion to Dismiss Count Two of the Amended Complaint. Doc. 6. The Court has also considered Plaintiff's Response in Opposition. Doc. 9.

I. Background

Plaintiff Donald Pratt (“Pratt”) initially filed suit against Defendant LM General Insurance Company (“Defendant”) in state court on October 18, 2024, asserting a claim for uninsured/underinsured motorist (“UM”) benefits and a claim for bad faith under Fla. Stat. § 624.155.¹ Doc. 1-3 at 4-9; Doc. 1, ¶¶ 1, 4. On November 26, 2024, Defendant removed this case to federal court pursuant to 28 U.S.C. § 1446. See Doc. 1.

On December 3, 2024, Defendant filed a Motion to Dismiss Count Two of the Amended Complaint arguing that the claim is not ripe and fails to state a claim. See Doc. 6. Plaintiff's Response in Opposition asserts that the Court can, and should, proceed by abating Count Two rather than dismissing it. See Doc. 9. Defendant's Motion is ripe for adjudication.

II. Legal Standard 2

Federal district courts are “empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution and which have been entrusted to them by a jurisdictional grant authorized by Congress.” Patel v. Hamilton Med. Ctr., Inc., 967 F.3d 1190, 1193 (11th Cir. 2020). Indeed, federal courts presumptively lack subject matter jurisdiction. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). The “burden of establishing the contrary rests upon the party asserting jurisdiction.” United States v. Batmasian, 66 F.4th 1278, 1280 (11th Cir. 2023) (citing Kokkonen, 511 U.S. at 377, 114 S.Ct. 1673).

Jurisdictional motions to dismiss under Federal Rule of Civil Procedure (“Rule”) 12(b)(1) come in two forms. First, there are “facial attacks,” which “require the court merely to look and see if the plaintiff has sufficiently alleged a basis of subject matter jurisdiction.” Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990) (quoting Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980)). A court assessing a “facial attack” on jurisdiction assumes the allegations in the complaint are true and does not look outside the pleadings and attached exhibits. See id. Second, there are factual attacks, which challenge the factual basis asserted for jurisdiction. Id. The present Motion is ultimately a facial attack on this Court's ability to exercise subject matter jurisdiction over Count Two; therefore, the Court accepts the Complaint's factual allegations as true. See Doc. 94.

III. Analysis

Florida has a first-party uninsured motorist bad faith statute. Fl. Stat. § 624.155. Accordingly, when an insured is not satisfied with the disposition of their UM claim, they may bring suit for breach of contract—and typically add a claim for statutory bad faith. See id.; see also id. at § 627.727. The bad faith claim, however, is not ripe until the underlying UM claim is favorably resolved. See id. at § 624.155(8); Fridman v. Safeco Ins. Co. of Illinois, 185 So.3d 1214, 1230 (Fla. 2016). Courts are split as to the appropriate procedure for resolution of these claims. See Larkin v. Depositor's Ins. Co., 2020 WL 13358555, *5-*8 (M.D. Fla. July 31, 2020) (in-depth review of the abatement vs. dismissal approaches to handling unripe bad faith claims in the Middle District). Some courts dismiss the bad faith claim without prejudice, while others simply abate the bad faith claim, as authorized by the Florida Supreme Court in Fridman.³ 185 So.3d at 1230.

Under Florida state law, a statutory bad faith claim is “grounded upon the legal duty to act in good faith, and is thus separate and independent of the claim arising from the contractual obligation to perform.” Dadeland Depot, Inc. v. St. Paul Fire and Marine Ins. Co., 945 So.2d 1216, 1235 (Fla. 2006) (quoting Blanchard v. State Farm Mut. Auto Ins. Co., 575 So.2d 1289, 1291 (Fla.1991)). “[A]n uninsured's underlying first-party action for insurance benefits against the insurer necessarily must be resolved favorably to the insured before the cause of action for bad faith in settlement negotiations can accrue.” Blanchard, 575 So.2d at 1291. Nevertheless, Florida courts explicitly allow a bad faith claim to stand subject to abatement. See Fridman, 185 So.3d at 1230. Therefore, it would be inappropriate to dismiss Count Two here based on a failure to state a claim.⁴ Id.; see Rule 12(b)(6).

In federal court, however, Fridman’s proclamation must yield to the “case or controversy” limitation on this Court's jurisdiction dictated by Article III.⁵ See U.S. Const., art. III § 2; see Larkin, 2020 WL 13358555 at *5 (“ ‘Although the Supreme Court of Florida favors abatement ․ Florida courts do not have the same jurisdictional requirements as federal courts,’ which are courts of limited jurisdiction where the plaintiff bears the burden of establishing Article III justiciability requirements.”). To satisfy Article III's “case or controversy” requirement, a case must be ripe for judicial review. See United States v. Rivera, 613 F.3d 1046, 1050 (11th Cir. 2010); Larkin, 2020 WL 13358555 at *6. And the Supreme Court has made clear that “[a] claim is not ripe for adjudication if it rests upon contingent future events that may not occur as anticipated, or indeed may not occur at all.” Texas v. U.S., 523 U.S. 296, 300, 118 S.Ct. 1257, 140 L.Ed.2d 406 (1998) (internal quotations and citations omitted).

“Ripeness ‘requir[es] us to evaluate both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.’ ” Id. at 301, 118 S.Ct. 1257 (quoting Abbott Lab'ys v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967)). There is no dispute here that Plaintiff's Count Two claim for damages under the bad faith statute is not “fit[ ] ․ for judicial decision.” Id. Plaintiff himself seeks an order from this Court abating Count Two and “agrees that ․ [he] shall not be permitted to conduct any discovery on the ‘bad faith’ count ․ until the abatement is lifted.” Doc. 9, ¶¶ 4, 9. In any event, the Florida Supreme Court has plainly recognized that the bad faith claims are not ripe until the insured's underlying action for benefits against the insurer is “first resolved in favor of the insured.” Fridman, 185 So.3d at 1222.

Moreover, very little hardship—if any—will result to the parties as a result of a dismissal of Count Two without prejudice. This UM action bears no similarity to classic ripeness cases like Abbott Laboratories, where a government regulation's “direct effect on the day-to-day business” threatened to astronomically increase the plaintiff's costs. 387 U.S. at 152, 87 S.Ct. 1507. Here, both parties acknowledge that Count Two will not accrue unless and until Plaintiff is successful in litigating his UM claim and obtains a ruling that Defendant breached its obligations to provide coverage. See Doc. 6 at 1; Doc. 9, ¶¶ 4, 9.

Indeed, regarding hardship, whichever way the Court decides to rule on this issue will have very little practical impact. In either event, Plaintiff must wait until his UM case is concluded (and any appeals resolved)⁶ to either file a motion requesting the Court lift an abatement or file a new pleading alleging his ripe bad faith claim. See, e.g., GEICO Gen. Ins. Co. v. Paton, 150 So.3d 804, (Fla. 4th DCA 2014) (holding that the initial action between insurer and insured fixes the amount of damages for a first-party bad faith action, allaying the primary hardship concern regarding these cases).⁷

In light of this reality, and acknowledging the legitimate subject matter jurisdiction concerns raised by Defendant and other courts in the Middle District over the last decade, it is appropriate for the Court to break from its precedent and dismiss the unripe bad faith claim in Count Two of Plaintiff's Amended Complaint without prejudice.⁸ See D'Agostino v. Safeco Ins. Co. of Illinois, 669 F.Supp.3d 1187, 1190, n.4 (N.D. Fla. 2023) (“As explained by the Eleventh Circuit, ‘[t]he general rule is that a district judge's decision neither binds another district judge nor binds him, although a judge ought to give great weight to his own prior decisions.’ McGinley v. Houston, 361 F.3d 1328, 1331 (11th Cir. 2004).”).

IV. Conclusion

Accordingly, it is ORDERED that Defendant's motion to dismiss Count Two of Plaintiff's Amended Complaint is hereby GRANTED. Count Two is hereby DISMISSED without prejudice.

DONE and ORDERED in Orlando, Florida on January 13, 2025.

FOOTNOTES

1.   Plaintiff filed an Amended Complaint in state court on November 19, 2024. Doc. 1, ¶ 3; Doc. 1-1.

3.   Compare, e.g., Caycho v. Am. Sec. Ins. Co., 668 F.Supp.3d 1251, 1255–56 (M.D. Fla. 2023) (dismissing on jurisdictional grounds), and Lewis v. Allied World Specialty Ins. Co., No. 20-CV-20677, 2023 WL 2770538, at *9 (S.D. Fla. Apr. 4, 2023) (same), with Braddy v. Infinity Assurance Ins. Co., No. 6:15-cv-11-ORL-28, 2016 WL 1446202, *3 (M.D. Fla. Apr. 11, 2016) (finding abatement appropriate because it “offers at least the possibility of increased judicial efficiency for those bad faith claims that do become ripe”), and Certain Interested Underwriters at Lloyd's, London v. AXA Equitable Life Ins. Co., No. 10-62061-CV, 2013 WL 3892956, at *3 (S.D. Fla. July 26, 2013) (finding abatement to be the “more efficient alternative”).

4.   In reviewing a complaint on a motion to dismiss under Federal Rule of Civil Procedure (“FRCP”) 12(b)(6), “courts must be mindful that the Federal Rules require only that the complaint contain ‘a short and plain statement of the claim showing that the pleader is entitled to relief.’ ” United States v. Baxter Int'l, Inc., 345 F.3d 866, 880 (11th Cir. 2003) (citing Fed. R. Civ. P. 8(a)). In Count Two, Plaintiff alleges that he is entitled to relief under Florida state law—specifically, Fla. Stat. § 624.155. Doc. 1-1, ¶¶ 13-23. And under Florida jurisprudence, he plainly states a claim for relief. See Fridman v. Safeco Ins. Co. of Illinois, 185 So.3d 1214, 1230 (2016) (“We reaffirm that our decision in [Allstate Indem. Co. v.] Ruiz [899 So.2d 1121 (Fla. 2005)] made clear that abatement is an appropriate procedural device.”).

5.   Notably, Plaintiff—despite protesting Defendant's position that Count Two does not state a claim pursuant to Rule 12(b)(6)—did not respond to Defendant's subject matter jurisdiction arguments, effectively conceding their merit. See generally Doc. 9; see also Glass v. Lahood, 786 F. Supp. 2d 189, 210 (D.D.C. 2011) aff'd, No. 11-5144, 2011 WL 6759550 (D.C. Cir. Dec. 8, 2011) (“[W]hen a plaintiff files an opposition to a dispositive motion and addresses only certain arguments raised by the defendant, a court may treat those arguments that the plaintiff failed to address as conceded.”).

6.   See Fridman, 185 So.3d at 1228 (“[W]e conclude that the determination of damages obtained in the UM action becomes a binding element of damages in the subsequent bad faith litigation against the same insurer and that the parties have the opportunity to appeal timely-raised errors in the UM verdict.”).

7.   See also Smith v. The First Liberty Ins. Co., 2015 WL 12843221, *1 (M.D. Fla. Mar. 18, 2015) (“One of the primary concerns plaintiffs continue to raise in these cases is that dismissal without prejudice raises judicial efficiency issues because of the risk of inconsistent verdicts. See, e.g., Lawton–Davis v. State Farm Mut. Auto. Ins. Co., 2014 WL 6674458, at *3 (M.D.Fla. Nov. 24, 2014) (“[T]he risks of judicial inefficiency and inconsistency peculiar to the first-party bad-faith context can be traced to a discrete question of Florida law: does an excess verdict in a UM benefits action fix a plaintiff's damages in a subsequent bad-faith action?”). However, this issue has been resolved by the Florida appellate courts. See GEICO Gen. Ins. Co. v. Paton, 150 So. 3d 804 (Fla. 4th DCA 2014) (“[T]he initial action between the insurer and the insured fixes the amount of damages in a first-party bad faith action.”); cf. Lawton–Davis, 2014 WL 6674458, at *3 (noting that the “holding in Paton significantly militates against the justifications for abatement.”).

8.   In Gianassi v. State Farm Mut. Auto. Ins. Co., 60 F. Supp. 3d 1267, 1271 (M.D. Fla. 2014), and in Johnson v. State Farm Mut. Auto. Ins. Co., No.6:15-cv-1942-ORL-31, 2016 WL 1127748, *1 (M.D. Fla. Mar. 21, 2016), this Court granted motions to dismiss but allowed the bad faith claim to be abated, rather than dismissed without prejudice. However, more recently, this Court has signaled that its understanding of this issue was evolving. See Gerlesky v. State Farm Mut. Auto. Ins. Co., No. 5:22-cv-404-GAP-PRL, Doc. 16 at 5, 2022 WL 19914508, *2 (M.D. Fla. Nov. 21, 2022) (“Although these claims seemingly should not exist in the same case, Florida courts explicitly allow a bad faith claim to stand subject to abatement.”).

GREGORY A. PRESNELL, UNITED STATES DISTRICT JUDGE