## Facts

- Donald E. Blanchard, Jr. suffered permanent bodily injury after being struck by an uninsured motorist.
- The Blanchards had uninsured motorist (UM) coverage with State Farm Mutual Automobile Insurance Company, with limits of $200,000.
- Alleging State Farm failed to make a good-faith settlement offer on the UM claim, the Blanchards sued the uninsured driver for negligence and sought to compel State Farm to pay UM benefits.
- A verdict awarded $396,990 in damages; judgment was entered against the uninsured tortfeasor for the full amount and against State Farm for the $200,000 UM policy limits.
- No appeal was taken from the UM judgment.
- The Blanchards then filed a separate action under Fla. Stat. § 624.155(1)(b)1 seeking damages for inconvenience and anguish and for the amount of damages exceeding the UM policy limits.
- In the ensuing federal litigation, the controlling question became when a first-party UM bad-faith claim accrues.

## Issues

1. Whether a first-party statutory bad-faith claim against a UM carrier under Fla. Stat. § 624.155(1)(b)1 accrues before final resolution of the underlying UM benefits litigation determining liability and the extent of damages.

## Decision

- The court answered the accrual question in the negative.
- A § 624.155(1)(b)1 first-party bad-faith claim against a UM carrier does not accrue until the insured’s entitlement to recover from the uninsured tortfeasor and the amount of damages are determined.
- Because the claim does not accrue earlier, the court did not address whether joinder of the bad-faith claim with the UM action is permissible or mandatory.

## Legal Principles

- A statutory first-party bad-faith claim based on failure to settle a UM claim is premature until there is a determination of:
  - the uninsured tortfeasor’s liability to the insured (legal entitlement to damages), and
  - the extent of the insured’s damages.
- The insured must first obtain a favorable resolution of the underlying action for UM benefits (by judgment or equivalent determination) before a bad-faith cause of action accrues.
- Because the bad-faith claim does not exist until after liability and damages are fixed, it is not required to be litigated in the underlying UM benefits action.

## Conclusion

A first-party bad-faith claim against a UM carrier under Fla. Stat. § 624.155(1)(b)1 accrues only after the insured establishes both liability of the uninsured motorist and the extent of damages in the underlying UM benefits dispute; earlier filing is premature.


Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So. 2d 1289 (Fla. 1991)