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Florida Fourth DCA rules that statute of limitations began to run on filing of bad faith lawsuit against insurer when damages were fixed by the entry of the judgment based on a Coblentz agreement between the plaintiff and the insured

On February 17, 2021, in Butler v. Florida Peninsula Insurance Company, No. 4D20-678, the Florida Fourth DCA reversed a summary judgment entered by the trial court in favor of the defendant insurance company. The plaintiff who had prevailed against the defendant’s insured in a personal injury lawsuit and had been assigned the insured’s right of action against the insurance company for bad faith in denying coverage and refusing to defend its insured. The trial court had granted summary judgment on the grounds that the plaintiff’s action was barred by the statute of limitations because the insured, whose claim the plaintiff had asserted, was required to file an action against the defendant insurance company within five years of its denial of coverage and request to defendant ion the underlying lawsuit. The Fourth DCA determined that the statute of limitations began to run, not at the time of the insurance company refusal to cover and to defend, but at the time plaintiff’s bad faith claim (as the assignee of the insured) became cognizable, which is when damages were fixed by the entry of the judgment based on a Coblentz agreement between the plaintiff and the insured (a Coblentz agreement refers to a negotiated consent judgment entered into between an insured and a claimant in order to resolve a lawsuit in which the insurer has denied coverage and declined to defend).

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