Healthy Food Experts, LLC v. Amguard Insurance Company

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

HEALTHY FOOD EXPERTS, LLC,
Appellant,

v.

AMGUARD INSURANCE COMPANY,
Appellee.

No. 4D2025-0181

[June 10, 2026]

Appeal from the Circuit Court for the Nineteenth Judicial Circuit,
Martin County; Elizabeth Ann Metzger, Judge; L.T. Case No.
432023CA001559CAAXMX.

Matthew Struble of StrubleCohen, Indialantic, for appellant.

Julius F. Parker, III of Butler Weihmuller Katz Craig LLP, Tallahassee,
for appellee.

GERBER, J.

After the insurer paid a breach of contract jury verdict for the insured,
the insured brought a bad faith action against the insurer for having failed
to settle the claim pre-suit. The insurer filed a motion to dismiss the
insured’s bad faith action, and the circuit court granted that motion with
prejudice. The circuit court, relying on Fridman v. Safeco Insurance Co. of
Illinois, 185 So. 3d 1214 (Fla. 2016), reasoned that the insured’s “damages
[were] fixed by the judgment in the [breach of contract] [s]uit, which [the
insurer] has paid,” and that the insured could “recover no additional
damages beyond those awarded in the [breach of contract] [s]uit.”

On appeal, the insured argues the circuit court “erred by ruling that a
jury verdict rendered in an underlying claim for contractual damages
precludes a subsequent bad faith claim for extra contractual damages. …
Contrary to the [circuit] court’s ruling, the finding in Fridman, that a
damage determination in the underlying suit is binding, actually
establishes … a condition precedent to prosecute a first-party bad faith
action.” (internal quotation marks and citation omitted).
Applying de novo review, we agree with the insured’s argument. See
Carrasco v. Jimenez, 419 So. 3d 640, 642–43 (Fla. 4th DCA 2025) (“When
reviewing an order granting a motion to dismiss, we apply a de novo
standard of review.”). Thus, we reverse the circuit court’s final order
dismissing the insured’s bad faith action.

We present this opinion in five sections:
1. The insured’s policy and claim;
2. The insured’s breach of contract suit and civil remedy notice;
3. The insured’s bad faith suit;
4. The parties’ arguments on appeal; and
5. Our review.

1. The Insured’s Policy and Claim

Our description of the insured’s policy and claim is derived from the
insured’s operative bad faith complaint, which the circuit court was
required to accept as true for purposes of considering the insurer’s motion
to dismiss. See Carrasco, 419 So. 3d at 643 (“A motion to dismiss for
failure to state a cause of action should be granted only if the movant can
establish beyond any doubt that the claimant could prove no set of facts
whatever in support of [the] claim. This analysis requires the court [to]
accept the facts alleged therein as true and to draw all [reasonable]
inferences ... in favor of the pleader.”) (alteration in original; internal
citations and quotation marks omitted).

The insurer issued a commercial insurance policy covering the
insured’s restaurant. The policy included coverage for business personal
property (up to $30,000), business income (up to $1,000,000), and food
spoilage (up to $10,000). The policy also covered direct physical loss or
damage caused by “collapse,” including collapses caused by “[d]ecay that
is hidden from view” and “[u]se of defective material or methods in
construction” which contributed to the collapse.

While the policy was in effect in 2017, the restaurant’s dining area
ceiling collapsed. The fire department deemed the property to be unsafe.
Later that day, the insured reported the claim to the insurer.

The insurer hired an engineer to inspect the property. The engineer’s
report pertinently concluded: (1) “[t]he ceiling damage occurred when the
wood substructure supporting the outer layer of drywall ceiling finishes
became detached from the supporting plaster ceiling”; (2) “[t]he
detachment of the wood substructure from the supporting plaster ceiling
can be attributed to improperly fastening the wood substructure to the

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wood roof rafters”; and (3) “the observed ceiling damage was a sudden and
accidental occurrence” and “there did not appear to be any physical
evidence that would have indicated that the displacement of the ceiling
finishes was imminent.”

The engineer’s findings and observations were included in a report
which the insurer’s field adjuster submitted to the insurer. The field
adjuster’s report ultimately concluded “the cause of this loss was due to
improper installation of the drywall ceiling.” The field adjuster estimated
the insured’s recoverable losses at $60,000, which included $16,000 in
business personal property, $30,000 in gross sales, $10,000 in food
spoilage, and $4,000 in fine arts. The field adjuster’s report also noted the
insured had reported $45,687.90 in food spoilage and $190,070 in lost
business income. The field adjuster asked the insurer to “advise if you will
be extending coverage to this loss.”

Two months later, the insurer sent the insured a letter denying
coverage for the insured’s losses for business personal property and
business income. The insurer stated it would provide coverage for only
the insured’s food spoilage losses. The insurer’s letter did not include the
engineer’s or the field adjuster’s reports or otherwise notify the insured of
the engineer’s and the field adjuster’s conclusions.

2. The Insured’s Breach of Contract Suit and Civil Remedy Notice

In 2018, the insured sued the insurer for breach of contract. That
action went to trial in 2022. The jury found defective construction and
hidden decay had caused the collapse. The jury also found the “value of
the damages sustained by [the insured] as a result of the subject loss” was
$31,330. The verdict form did not request the jury to attribute that value
to any specific loss type. Following the circuit court’s entry of final
judgment for the insured based on the jury’s verdict, the insurer appealed.

While the insurer’s appeal was pending, the insured filed a civil remedy
notice (“CRN”) with the Florida Department of Financial Services. The
insured’s CRN alleged the following statutory violations: (1) a section
624.155(1)(b)1. violation for “[n]ot attempting in good faith to settle claims
when, under all the circumstances, it could and should have done so, had
it acted fairly and honestly toward its insured and with due regard for her
or his interests”; (2) a section 626.9541(1)(i)3.a. violation for “[f]ailing to
adopt and implement standards for the proper investigation of claims”; (3)
a section 626.9541(1)(i)3.b. violation for “[m]isrepresenting pertinent facts
or insurance policy provisions relating to coverages at issue”; (4) a section
626.9541(1)(i)3.d. violation for “[d]enying claims without conducting

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reasonable investigations based upon available information”; (5) a section
626.9541(1)(i)3.f. violation for “[f]ailing to promptly provide a reasonable
explanation in writing to the insured of the basis in the insurance policy,
in relation to the facts or applicable law, for denial of a claim or for the
offer of a compromise settlement”; and (6) a section 626.9541(1)(i)3.g.
violation for “[f]ailing to promptly notify the insured of any additional
information necessary for the processing of a claim.”

The insured’s CRN alleged the following facts supported the violations:

[The insurer] denied the claim by representing that its
[a]djuster and [e]ngineer [had] determined the claim was not
covered.

When [the field adjuster’s and the engineer’s] reports were
eventually obtained, after the claim was denied and after years
of litigation, it was revealed that [the insurer’s] denial omitted
pertinent portions of the reports. First, the [e]ngineer actually
concluded that the collapse was a “sudden and accidental
occurrence” … Second, the [e]ngineer concluded that prior
to the collapse[,] the [insured] was not aware of any ceiling
cracks or ceiling water stains (decay that is hidden or
unknown). The [e]ngineer confirmed the [insured’s] statement
that the damage was unknown prior to the collapse because
the deteriorated drywall was behind the ceiling and not visible.
The [e]ngineer identified contributing causes, including visible
mold growth and deteriorated drywall. [The insurer]
concealed this information, despite the information from its
own [a]djuster and [e]ngineer establishing coverage for the
claim pursuant to the Additional Coverage for Collapse.

A jury confirmed coverage for the claim and awarded
damages for $31,330. Instead of paying the judgment, [the
insurer] has filed an appeal ….

As a result of [the insurer’s] actions, including wrongful
denial, concealing information, claim delay, and not adjusting
the amount of the claim … the [insured] sustained significant
uninsured losses …. The insurer can cure this [CRN] by issuing
payment for the judgment plus interest.

(emphasis added).

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The insurer did not pay the CRN’s requested cure amount within the
statutory sixty-day cure period. See § 624.155(3)(d), Fla. Stat. (2017) (“No
action shall lie if, within 60 days after filing notice, the damages are paid
or the circumstances giving rise to the violation are corrected.”).

In 2023, without written opinion, we per curiam affirmed the
underlying breach of contract judgment against the insurer. AmGUARD
Ins. Co. v. Healthy Food Experts, LLC, 357 So. 3d 680 (Fla. 4th DCA 2023).

3. The Insured’s Bad Faith Suit

Later in 2023, the insured sued the insurer for first-party bad faith.
The bad faith suit’s allegations largely mirrored the CRN’s allegations. The
insured further alleged that, based on the insurer’s statutory violations
referenced in the CRN, and the insurer’s failure to pay the CRN’s stated
cure amount within the statutory sixty-day period, the insured had
suffered “extra-contractual damages.”

The insurer filed a motion to dismiss the insured’s bad faith suit for
failure to state a cause of action. The insurer pertinently alleged:
“Following the appeals court’s per curiam affirmance, [the insurer] paid
[the] judgment in full with accrued interest.” Based on that allegation, the
insurer argued dismissal was required under Fridman, 185 So. 3d at 1216
(“[A]n insured is entitled to a determination of liability and the full extent
of his or her damages in the [uninsured motorist] action before filing a
first-party bad faith action. That determination of damages is then
binding, as an element of damages, in a subsequent first-party bad faith
action against the same insurer so long as the parties have the right to
appeal any properly preserved errors in the verdict.”). The insurer also
argued dismissal was required because the insured’s breach of contract
judgment did not exceed the insured’s policy limits, which the insurer
maintained was a required element of a first-party bad faith claim.

Following a hearing, the circuit court entered a final order dismissing
the insured’s bad faith action with prejudice:

[A]pplying … Fridman, where first-party damages are fixed
by verdict and judgment, such damages are binding on this
subsequent bad faith action brought by [the insured] per the
Complaint. [The insured] litigated its damages against [the
insurer] in the 2018 Suit, and if [the insured] believed the jury
verdict … [was] in error (“if the verdict were less than
anticipated”), [the insured] had a right to appellate review of
the damages; [the insured] did not do so. … [The insured]

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cannot now seek a “second bite at the apple” to relitigate its
first-party insurance contract damage claims through the
[bad faith suit]. … [T]herefore, [the insured’s] damages are
fixed by the judgment in the 2018 [breach of contract] [s]uit,
which [the insurer] has paid.

[The insured’s bad faith suit] only seeks damages for
“statutory bad faith” claims due to alleged violations of
sections 624.155(1)(b)[1.] and 626.9541(1)(i)3[.], Florida
Statutes [(2017)], and the Court has determined that [the
insured] can recover no additional damages beyond those
awarded in the 2018 [breach of contract] [s]uit, applying
Fridman’s rationale. … [The insured] cannot prove any set of
facts to state a cause of action for additional damages based
on bad faith.

The insured filed a motion for rehearing. The rehearing motion
pertinently argued the insurer’s “wrongful claim denial caused damages
that could not have been requested in the trial of contractual damages ….”
The circuit court summarily denied the insured’s rehearing motion.

4. The Parties’ Arguments on Appeal

This appeal followed. The insured pertinently argues:

The trial court’s order is the opposite of Florida law, which
requires that contractual damages in a first-party property
insurance claim be fixed by verdict and judgment (or
confession of judgment) as a pre-requisite to brin[g]ing a
subsequent bad-faith claim for extracontractual damages.
Contrary to the trial court’s ruling, the finding in Fridman that
a damage determination in the underlying suit is binding
actually establishes that “a condition precedent to prosecute
a first-party bad faith action” is satisfied. Cingari v. First
Protective Ins. Co., 377 So. 3d 1169, 1174 (Fla. 4th DCA 2024).
Clearly, an underlying jury verdict cannot preclude a
subsequent bad faith claim, when obtaining a verdict in the
underlying contractual claim is a specified prerequisite for
bringing a bad faith claim.

….

The “binding” language in Fridman serves one purpose: to
prevent parties from getting a “second bite at the apple” by re-

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litigating the same damages. Fridman, 185 So. 3d at 1225.
The concern is preventing re-litigation of what the covered loss
was worth—the contractual damages. In the
[uninsured/underinsured motorist] context of Fridman, the
jury verdict determined the full extent of damages from the
underlying accident, capped at policy limits by law.

That context does not apply here. [The insured] is not
seeking to re-litigate the $3[1],330 in contractual damages.
[The insured] accepts that verdict. Instead, [the insured]
seeks entirely different damages—extra-contractual damages
caused by [the insurer’s] bad faith conduct ….

These are not the “same” damages—they are consequential
damages from [the insurer’s] bad faith.

(record citations omitted).

The insurer summarizes its response as follows:

The trial court correctly followed Fridman … which involved
virtually identical facts. Fridman controls because it involved
a jury trial in which the insurer had an opportunity to present
evidence on the question of damages and an opportunity to
appeal any perceived errors in the trial. As such, the jury
verdict rendered in the breach of contract action sets the
measure of damages in this attempted bad-faith claim. Since
those damages do not exceed the ... policy’s limits, no bad
faith claim can exist as a matter of law.

5. Our Review

a. First-Party Bad Faith Actions Generally

“The Florida Legislature created the first-party bad faith cause of action
by enacting section 624.155, Florida Statutes, which imposes a duty on
insurers to settle their policyholders’ claims in good faith.” Cingari, 377
So. 3d at 1173. “The statutory obligation on the insurer is to timely
evaluate and pay benefits owed under the insurance policy. The damages
recoverable by the insured in a bad faith action are those amounts that
are the reasonably foreseeable consequences of the insurer’s bad faith in
resolving a claim, which include consequential damages.” Id. (internal
citations omitted). “[S]uch damages may include, but are not limited to,

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interest, court costs, and reasonable attorney’s fees incurred by the
plaintiff.” Cont’l Ins. Co. v. Jones, 592 So. 2d 240, 241 (Fla. 1992).

“As a condition to bringing such a bad faith action, Florida’s
Department of Financial Services and the insurer must be given sixty days’
written notice of the claim.” Demase v. State Farm Fla. Ins. Co., 239 So.
3d 218, 221 (Fla. 5th DCA 2018). “The sixty-day window is designed to be
a cure period that will encourage payment of the underlying claim, and
avoid unnecessary bad faith litigation. This cure period allows the insurer
a final opportunity to comply with their claim-handling obligations when
a good-faith decision by the insurer would indicate that contractual
benefits are owed.” Id. (internal citations and quotation marks omitted).

“[I]f an insurer fails to respond to a civil remedy notice within the sixty-
day window, there is a presumption of bad faith sufficient to shift the
burden to the insurer to show why it did not respond.” Id. (citations and
internal quotation marks omitted) (alteration in original). If, however, “the
insurer pays the [contractual] damages during the cure period, then there
is no [bad faith] remedy [for the insured].” Talat Enters., Inc. v. Aetna Cas.
& Sur. Co., 753 So. 2d 1278, 1284 (Fla. 2000).

Accordingly, “a statutory bad faith claim under section 624.155 is ripe
for litigation when there has been (1) a determination of the insurer’s
liability for coverage; (2) a determination of the extent of the insured’s
[contractual] damages; and (3) the required [civil remedy] notice is filed
pursuant to section 624.155(3)(a).” Demase, 239 So. 3d at 221.

b. Fridman in Detail

Here, in dismissing the bad faith action on the basis that the insured’s
damages were “fixed” by the judgment entered in the breach of contract
action, and that the insured could “recover no additional damages beyond
those awarded in the [breach of contract action],” the circuit court relied
on Fridman. However, the circuit court misapplied Fridman.

Fridman—unlike the instant case, which concerns a property insurance
policy—addressed whether an insured was entitled to a determination of
liability and the full extent of damages in an uninsured/underinsured
motorist (“UM/UIM”) action before pursuing a first-party bad faith claim
under section 624.155. 185 So. 3d at 1215. The case arose after the
insured filed a claim with his insurer for the UM policy’s $50,000 limits,
based on having been injured in an automobile accident with an
underinsured motorist. Id. at 1216. The insurer refused to pay the policy
limits, and the insured filed a CRN. Id. After the insurer had failed to

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respond to the CRN, the insured sued the insurer to determine liability
under the UM/UIM policy and the full extent of damages. Id. Before trial,
the insurer tendered the $50,000 policy limits and filed a motion for entry
of confession of judgment. Id. at 1217. The insured opposed entry of a
confessed judgment, arguing “a jury verdict would determine the upper
limits of [the insurer’s] potential liability under a future bad faith claim.”
Id. The circuit court denied the insurer’s motion to confess judgment. Id.

The case proceeded to trial, where a jury determined the underinsured
driver involved in the accident was negligent and one hundred percent
responsible for the insured’s damages, which the jury determined to be
$1,000,000. Id. The circuit court thereafter entered a final judgment
awarding $50,000 (the policy limits) to the insured, and reserving
jurisdiction to determine the insured’s right to amend the complaint to
seek bad faith damages. Id. at 1217–18. The final judgment also stated:
“If the [insured] should ultimately prevail in his action for bad faith
damages against [the insurer], then the [insured] will be entitled to a
judgment, in accordance with the jury’s verdict, for his damages in the
amount of $980,072.91 plus interest, fees and costs.” Id. at 1218.

The insurer appealed to the Fifth District, arguing, among other things:
“(1) the trial court should have granted [the insurer’s] motion for entry of
confession of judgment; [and] (2) the final judgment was void because the
trial court had no authority to reserve jurisdiction in the judgment to allow
an amendment to the pleadings or establish [the insured’s] damages to be
awarded in a future bad faith action.” Id.

The Fifth District agreed with the insurer, vacated the jury’s verdict,
and directed the circuit court to enter an amended final judgment deleting
any reference to the jury verdict or reserving jurisdiction to consider the
insured’s bad faith claim. Id. The Fifth District reasoned that where no
dispute exists as to the policy limits or available coverage, the amount of
the judgment in the UM case may not exceed the policy limits. Id.
According to the Fifth District, when the insurer confessed judgment for
the policy limits, “the issues between the parties, as framed by the
pleadings, became moot.” Id. Instead of proceeding to trial, the Fifth
District explained, “the trial court should have merely entered the
confessed judgment [for the insured], reserving jurisdiction to award costs,
prejudgment interest, and, if authorized by law, reasonable attorney’s
fees.” Id. The Fifth District reasoned this “would provide [the insured] a
sufficient basis to pursue a bad faith claim against [the insurer],” because
“[the insured] can seek the full measure of damages afforded by [section
627.727(10)] in a subsequent bad faith action.” Id. (alteration in original).

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The Florida Supreme Court quashed the Fifth District’s decision,
reasoning: “[A]n insured is entitled to a determination of liability and the
full extent of his or her damages in the UM action before filing a first-party
bad faith action. That determination of damages is then binding, as an
element of damages, in a subsequent first-party bad faith action against
the same insurer so long as the parties have the right to appeal any
properly preserved errors in the verdict.” Id. at 1216. Regarding the
verdict’s binding effect in a first-party bad faith action, the Supreme Court
explained:

First, it is obvious that the UM verdict to which the insured
is entitled must be binding in the bad faith action. Because a
determination of the full extent of the insured’s damages is
one of the prerequisites to a bad faith cause of action, to
preclude a UM verdict in excess of the policy limits from being
used in the bad faith case would force the parties to relitigate
the issue of damages a second time prior to the bad faith trial.
…

If the amount of the UM verdict is not binding as an
element of damages in the bad faith litigation, it would allow
the insurer—or the insured, if the verdict were less than
anticipated—a second bite at the proverbial apple. …

Id. at 1224–25. The Supreme Court also noted “that an element of
damages within the first-party bad faith case would be any damages in
excess of the policy limits for the injuries arising from the automobile
accident.” Id. at 1221–22.

In sum, the Supreme Court’s Fridman opinion stands for two
propositions in UM/UIM actions: (1) parties cannot challenge the damages
awarded in the underlying breach of contract action in a subsequent first-
party bad faith action if the parties had the opportunity to appeal the
judgment; and (2) if the judgment in the underlying breach of contract
action exceeds the policy limits, the excess damages can be sought as an
element of damages within the first-party bad faith action, along with any
other consequential damages proximately caused by the insurer’s bad
faith in resolving the contractual claim. See id. at 1224–25.

These propositions do not neatly carry over to first-party property
insurance actions. In UM/UIM bad faith actions, unlike in property
insurance actions, the damages recoverable include “the amount in excess

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of the policy limits.” § 627.727(10), Fla. Stat. (2017). 1 That is why the
insured, in a breach of contract action, is “entitled to a determination of
liability and the full extent of his or her damages before litigating the first-
party bad faith claim.” Fridman, 185 So. 3d at 1222. For example, in
Fridman, the insured had a $50,000 policy limit, and the jury determined
her actual damages from the accident were nearly $1 million. Hence, she
was entitled to seek that $950,000 excess as damages in a subsequent
bad faith action, even though the insurer could not be liable for more than
the $50,000 policy limit in the breach of contract action.

By contrast, in first-party property insurance actions, no mechanism
allows the insured to recover actual damages—that is, the amount of
property damage—in excess of the policy limit in the subsequent bad faith
action. So if the insured had a $50,000 policy limit, yet suffered a $1
million actual loss to his or her property, the insured could recover at most
$50,000 in the breach of contract action, but could not seek to recover his
or her actual property damage in a subsequent bad faith action. See
Citizens Prop. Ins. Corp. v. Manor House, LLC, 313 So. 3d 579, 582 (Fla.
2021) (“[E]xtra-contractual, consequential damages are not available in a
first-party breach of insurance contract action because the contractual
amount due to the insured is the amount owed pursuant to the express
terms and conditions of the policy.”). In a subsequent bad faith action,
the insured could seek extra-contractual damages incurred as a
consequence of the insurer’s failure to pay the $50,000 to which the
insured was entitled, but could not recover the additional $950,000 in
property losses. See id. (“Extra-contractual damages are available in a
separate bad faith action pursuant to section 624.155 ….”); Jones, 592 So.
2d at 241 (“[T]he damages recoverable in a first-party bad faith suit under
section 624.155, Florida Statutes (1989), are those damages which are the
natural, proximate, probable, or direct consequence of the insurer’s bad
faith.”).

c. Application Here

Here, the insured’s first-party bad faith action under section 624.155
was ripe for litigation because the insured had established: “(1) a
determination of the insurer’s liability for coverage; (2) a determination of
the extent of the insured’s [contractual] damages; and (3) the required [civil
remedy] notice [was] filed pursuant to section 624.155(3)(a).” Demase, 239
So. 3d at 221.

1 In 2023, the Legislature recodified this provision as section 627.727(9), Florida

Statutes (2023).

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Although the insured’s bad faith action could not seek contractual
damages which were litigated, or could have been litigated, in the insured’s
breach of contract action, the insured’s bad faith action could seek “extra-
contractual damages” which were not recoverable in the insured’s breach
of contract action. See Manor House, 313 So. 3d at 582 (“[E]xtra-
contractual, consequential damages are not available in a first-party
breach of insurance contract action because the contractual amount due
to the insured is the amount owed pursuant to the express terms and
conditions of the policy. Extra-contractual damages are available in a
separate bad faith action pursuant to section 624.155 ….”); Jones, 592 So.
2d at 241 (extracontractual “damages may include, but are not limited to,
interest, court costs, and reasonable attorney’s fees incurred by the
[insured]”).

Indeed, as the insured correctly argues, “[c]laim handling evidence and
bad faith allegations are inadmissible in breach of contract actions,
confirming these issues could not have been litigated in the underlying
[breach of contract] case.” See generally Universal Prop. & Cas. Ins. Co. v.
Naze, 417 So. 3d 313, 314–20 (Fla. 4th DCA 2025) (claims handling
evidence inadmissible in breach of contract action as being irrelevant and
prejudicial). As such, as the insured argues, the “the resulting extra-
contractual damages [flowing from the insurer’s alleged bad faith conduct]
could not have been—and were not—litigated in the underlying [breach of
contract] case.”

Further, while the insurer belatedly paid the CRN’s cure amount only
after we had affirmed the underlying breach of contract judgment, the
insurer’s late payment did not preclude the insured’s bad faith action. We
are not aware of any authority which permits an insurer to extend section
624.155(3)(c)’s sixty-day cure period by appealing the underlying breach
of contract judgment.

The insurer also misstates that an excess judgment in the underlying
breach of contract action is an essential element of a first-party bad faith
claim. On the contrary, excess judgments are not available in a breach of
contract action in first-party property insurance claims. See Manor House,
313 So. 3d at 582 (“[T]he contractual amount due to the insured is the
amount owed pursuant to the express terms and conditions of the
policy.”).

The primary case upon which the insurer relies involved a third-party
bad faith claim. See Cunningham v. Standard Guar. Ins. Co., 630 So. 2d
179, 181 (Fla. 1994) (“Under ordinary circumstances, a third party must
obtain a judgment against the insured in excess of the policy limits before

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prosecuting a bad-faith claim against the insured’s liability carrier.”)
(emphasis added). Third-party actions differ significantly from first-party
actions. See Macola v. Gov’t Emps. Ins. Co., 953 So. 2d 451, 457 (Fla.
2006) (“[T]he difference between first-party and third-party bad faith
causes of action is critical.”). “[A] third-party bad faith cause of action
arises when the insurer fails to act in good faith in handling a claim
brought by a third party against an insured, whereas a first-party bad faith
cause of action arises when an insurer fails to act in good faith in the
processing of the insured’s own first-party claim.” Id. As Cunningham
recognized, “the essence of a third-party bad-faith cause of action is to
remedy a situation in which an insured is exposed to an excess judgment
because of the insurer’s failure to properly or promptly defend the claim.”
630 So. 2d at 181 (emphasis added).

“Such is not the case in a first-party action, because the insured is not
injured by the excess judgment amount.” McLeod v. Cont’l Ins. Co., 591
So. 2d 621, 624 (Fla. 1992), superseded on other grounds by ch. 92-318,
§ 79, Laws of Fla., as recognized in Fridman, 185 So. 3d at 1221; see also
Barton v. Cap. Preferred Ins. Co., 208 So. 3d 239, 243–44 (Fla. 5th DCA
2016) (holding, in a first-party bad faith action, that “[section 624.155]
does not condition the right to bring an action on the insured’s recovery of
the policy limits”); Cingari, 377 So. 3d at 1171–75 (the insurer’s payment
of the policy limits in the underlying suit seeking the appointment of an
umpire did not preclude the homeowner’s first-party bad faith action
wherein the homeowner sought damages for having to sell the property at
a loss due to the insurer’s bad faith conduct).

Conclusion

Based on the foregoing, we conclude the circuit court erred in
dismissing the insured’s bad faith action. Thus, we reverse the circuit
court’s final dismissal order. We remand for the circuit court to reinstate
the insured’s bad faith action. The insured’s bad faith action may seek
extra-contractual damages which were not recoverable in the insured’s
breach of contract action. Manor House, 313 So. 3d at 582. The insured’s
bad faith action may not seek contractual damages which were litigated,
or could have been litigated, in the insured’s breach of contract action. Id.

Reversed and remanded for proceedings consistent with this opinion.

CIKLIN and LOTT, JJ., concur.

* * *

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Not final until disposition of timely-filed motion for rehearing.

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