Insurance
— Uninsured motorist — Coverage — Denial — Bad faith — Declaratory
judgment — Plaintiffs as personal representatives for estate of deceased
insured filed complaint against insurer alleging claim for bad faith and
seeking declaratory judgment to determine liability and damages — District
court, in exercising its discretion, would dismiss without prejudice, rather
than abate, plaintiffs’ unripe bad faith claim — Bad faith claim is
prematurely brought until such claim has a factual basis to support it, i.e.,
the plaintiffs’ claim for UM benefits has been resolved in plaintiffs’ favor —
Claim for declaratory judgment pursuant to Declaratory Judgment Act would be
dismissed with prejudice because there is no actual and definite controversy
where the determination of liability and total amount of damages suffered in
underlying contract claim have not been determined — Declaratory Judgment Act
does not permit a present attempt to quantify an amount of damages for a future
bad faith claim because such a declaration does not resolve the entire
controversy of whether bad faith occurred

EVELYN L. BELE and WILLIAM BELE, Plaintiffs, v. 21ST CENTURY CENTENNIAL
INSURANCE COMPANY, Defendant. U.S. District Court, Middle District of Florida,
Orlando Division. Case No. 6:15-cv-526-Orl-40GJK. September 1, 2015. Paul G.
Byron, Judge.

ORDER

This cause comes before the Court on the following:

1. Defendant’s,
21st Century Centennial Insurance Company, Motion to Dismiss Counts II and III
(Doc. 7), filed April 2, 2015; and

2. Plaintiffs’,
Evelyn L. Bele and William Bele, Response to Defendant’s Motion to Dismiss
Counts II and III (Doc. 15), filed April 29, 2015.

Upon consideration, Defendant’s motion is due to be granted in part and
denied in part for the reasons articulated herein.

I. BACKGROUND1

This case arises out of a motor vehicle accident that occurred in March
2014 in Lake County, Florida. (Doc. 2, ¶ 12). At that time, two non-party
drivers collided, disabling one of the driver’s vehicles. (Id. ¶ 13).
Around the same time, Plaintiff, Evelyn Bele, and her husband, Anthony Bele,
were traveling in their vehicle which was being driven by their neighbor. (Id.
¶ 14). The Beles’ vehicle struck the disabled vehicle, injuring the Beles.
(Id. ¶¶ 15-16).

At the time of the collision, the Beles were insured by Defendant, 21st
Century Centennial Insurance Company, under an automobile insurance policy that
provided non-stacking underinsured/uninsured motorist (“UM”) coverage with
limits of $250,000 per person and $500,000 per accident. (Id. ¶ 17; Doc.
1-1, p. 14). The non-party at-fault driver had an insurance policy with limits
of $100,000 per person and $300,000 per accident. (Doc. 1-1, p. 18). The
insurance company for the at-fault driver tendered its policy limits of
$100,000 to the Beles for a combined tender of $200,000. (Id.). Despite
this tender, the at-fault driver was underinsured for the claim. (Id.).
Defendant has denied UM coverage to Evelyn and Anthony Bele. (Doc. 2, ¶ 21).

On March 2, 2015, Plaintiffs, Evelyn Bele and William Bele, as personal
representative for the estate of Anthony Bele (collectively, “Plaintiffs”),
initiated this action by filing a Complaint against Defendant in the Circuit
Court of the Seventh Judicial Circuit in and for Volusia County, Florida. (Doc.
12, p. 1). Plaintiffs’ Complaint alleges three claims for relief. (Doc. 2).
Count I alleges a claim for breach of contract and seeks UM benefits. Count II
alleges a claim for bad-faith. Count III seeks a declaratory judgment to
determine liability and damages. On March 27, 2015, Defendant timely removed
this case to federal court. (Doc. 1). On May 15, 2015, the Court denied
Plaintiffs’ Motion to Remand the case to state court finding that the Court had
diversity jurisdiction over the case. (Doc. 19). Defendant now moves to dismiss
Counts II and III of Plaintiffs’ Complaint. (Doc. 7).

II. STANDARD OF REVIEW

A complaint must contain “a short and plain statement of the claim showing
that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). When a
complaint fails to “state a claim to relief that is plausible on its face,” the
defendant may seek dismissal of the complaint under Rule 12(b)(6). Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007) [20 Fla. L. Weekly Fed. S267a].
When considering a Rule 12(b)(6) motion to dismiss, courts must accept all
well-pleaded factual allegations — but not legal conclusions — in the
complaint as true. Twombly, 550 U.S. at 555. After disregarding
allegations that “are not entitled to the assumption of truth,” the court must
determine whether the complaint includes “factual content that allows the court
to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009) [21
Fla. L. Weekly Fed. S853a].

III. DISCUSSION

A. Count Two: Bad-Faith

In Count II, Plaintiffs assert a bad-faith claim against Defendant for
violation of §§ 624.155(1)(b)(1) and 626.9541(1)(i)(3), Florida Statutes. (Doc.
2, ¶¶ 26-38). Under Florida law, a claim for bad-faith does not accrue until
there has been a determination of liability and damages in the underlying
contract claim. See Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So.
2d 1289, 1291 (Fla. 1991). Plaintiffs do not dispute that their bad-faith claim
is premature. Thus, the only issue before the Court is whether it should abate
Plaintiffs’ bad-faith claim or dismiss it without prejudice as premature. Landmark
Am. Ins. Co. v. Studio Imps., Ltd., Inc., 76 So. 3d 963, 964-65 (Fla. Dist.
Ct. App. 2011) [36 Fla. L. Weekly D2482a] (“The trial court can decide to
either dismiss the bad faith claim without prejudice or abate the claim until
the underlying breach of contract issue is resolved.”).

Courts have not settled on a single course of action for handling unripe
bad-faith claims. Compare Lawton-Davis v. State Farm Mut. Auto. Ins. Co.,
No. 6:14-cv-1157-orl-37GJK, 2014 WL 6674458, at *3, *4 (M.D. Fla. Nov. 24,
2014) (abating bad-faith claim); Gianassi v. State Farm Mut. Auto. Ins. Co.,
60 F. Supp. 3d 1267, 1271, 1273 (M.D. Fla. 2014) (same), with Mann v. Taylor,
No. 5:15-CV-7-RS-GRJ, 2015 WL 500803, at *3 (N.D. Fla. Feb. 5, 2015)
(dismissing bad-faith claim without prejudice); Duke’s Steakhouse, Inc. v.
Certain Interested Underwriters at Lloyd’s London Subscribing to Policy #’s
L10829 & L13105, No. 8:11-cv-1324-T-24EAJ, 2011 WL 4376788, at *2 (M.D.
Fla. Sept. 6, 2011) (same). Ultimately, the decision of whether to abate or
dismiss without prejudice rests in the sound discretion of the Court. See
Vanguard Fire & Cas. Co. v. Golmon, 955 So. 2d 591, 595 (Fla. Dist. Ct.
App. 2006) [31 Fla. L. Weekly D2835a] (per curiam) (noting that “the trial
court has authority to abate the statutory claims, rather than to dismiss them,
if it appears to the court that abatement would be in the interest of judicial
economy”).

Plaintiff’s primary argument is that abatement serves judicial economy.
Florida’s Fourth District Court of Appeal recently held that “the initial
action between the insurer and the insured fixes the amount of damages in a
first-party bad faith action.” See GEICO Gen. Ins. Co. v. Paton, 150 So.
3d 804, 807 (Fla. Dist. Ct. App. 2014) [39 Fla. L. Weekly D1988a]. Because of
the court’s holding in Paton, many — but not all — courts have abated
bad-faith claims when they accompany claims for UM benefits, rather than
dismissing them without prejudice.

However, in the Court’s view, abating the bad-faith claim, even if it may
be in the interest of judicial economy, is not the proper route. Bringing a
premature bad-faith claim is contrary to the Federal Rules of Civil Procedure.
A plaintiff who has an as-yet unresolved claim for UM benefits it not “entitled
to relief” on its claim for bad-faith. Fed. R. Civ. P. 8(a)(2). Moreover,
depending on the outcome of the UM claim, a plaintiff may never be entitled to
relief on his or her bad-faith claim. Thus, it is this Court’s position that
until a bad-faith claim has a factual basis to support it — i.e., the
plaintiff’s claim for UM benefits has been resolved in the plaintiff’s favor —
such claim is prematurely brought. Accordingly, in exercising its discretion,
the Court will dismiss without prejudice, rather than abate, Plaintiff’s unripe
bad-faith claim.

B. Count Three: Declaratory Judgment

In Count III, Plaintiffs request that the Court enter a declaratory
judgment determining liability and the total amount of damages suffered by
Plaintiffs. (Doc. 2, ¶¶ 39-44). Defendant argues that Plaintiffs’ claim for
declaratory judgment must be dismissed because no actual controversy exists.
(Doc. 7, pp. 6-7).

The Court must evaluate Plaintiffs’ declaratory relief claim pursuant to
the Declaratory Judgment Act.2 See Gianassi, 60 F. Supp. 3d at 1272; Shapiro
v. Gov’t Emps. Ins. Co., No. 14-CIV-62792, 2015 WL 127897, at *3 (S.D. Fla.
Jan. 8, 2015). Under the Declaratory Judgment Act, a declaratory judgment may
be issued only in the case of an actual controversy. 28 U.S.C. § 2201(a). The
controversy must not be “conjectural, hypothetical, or contingent; it must be
real and immediate, and create a definite, rather than speculative threat of
future injury.” Shapiro, 2015 WL 127897, at *3; Gianassi, 60 F.
Supp. 3d at 1272.

Plaintiffs argue that their claim for declaratory relief as to
apportionment of liability and damages is sufficiently concrete because it is
an element of their bad-faith claim. The Court rejects this argument as
unpersuasive for two reasons. First, the Court has previously determined that
Plaintiffs’ bad faith claim should be dismissed without prejudice as it is
premature at this time. Second, a majority of courts dismiss similar
declaratory judgment claims because no actual controversy exists prior to the
determination of the damages suffered in the claim for UM benefits. See
e.g., Lawton-Davis, 2014 WL 6674458, at *3 (“Plaintiff’s bad-faith claim is
premature and thus the parties are not presently in controversy over it and, in
any event, a declaration as to liability and damages would not dispose of all
issues necessary to completely resolve the bad-faith claim.”); Gianassi,
60 F. Supp. 3d at 1272 (dismissing declaratory judgment count with prejudice); Smith
v. 21st Century Centennial Ins. Co., No. 8:14-v-2531-T-26TBM, 2014 WL
5474591, at *1 (M.D. Fla. Oct. 29, 2014) [25 Fla. L. Weekly Fed. D52a] (“Count
III for declaratory relief must be dismissed because there is no actual
controversy prior to the determination of the damages suffered in the underlying
contract claim. . . .”).

Here, the determination of liability and the total amount of damages
suffered in the underlying contract claim have not been determined. Thus, as it
now stands, there is no actual and definite controversy as “[t]he Declaratory
Judgment Act does not permit a present attempt to quantify an amount of damages
for a future bad faith claim because such a declaration does not resolve the
entire controversy of whether bad faith occurred.” Smith, 2014 WL
5474591, at *1. Accordingly, Count III will be dismissed with prejudice.

IV. CONCLUSION

For the aforementioned reasons, it is ORDERED AND ADJUDGED:

1. Defendant’s, 21st Century Centennial Insurance Company, Motion to
Dismiss Counts II and III (Doc. 7) is GRANTED as follows:

a. Count II is DISMISSED WITHOUT PREJUDICE.

b. Count III is DISMISSED WITH PREJUDICE.

2. Defendant shall answer Plaintiffs’ Complaint within fourteen (14) days
of the date of this Order.

__________________

1This account of the facts is taken from
Plaintiffs’ Complaint (Doc. 2), the allegations of which the Court must accept
as true in considering Defendant’s Motion to Dismiss. See Linder v.
Portocarrero, 963 F.2d 332, 334 (11th Cir. 1992); Quality Foods de
Centro Am., S.A. v. Latin Am. Agribusiness Dev. Corp. S.A., 711 F.2d 989,
994 (11th Cir. 1983).

2Count III is brought pursuant to §§
86.011-.111, Florida Statutes. (Doc. 2, ¶ 40). However, “[w]hen a case is
removed from state to federal court on the basis of diversity of citizenship,
the federal court applies state substantive law and federal procedural law.” Gianassi,
60 F. Supp. 3d at 1271. “Both the federal Declaratory Judgment Act, 28 U.S.C. §
2201, and Chapter 86, Florida Statutes are procedural, they do not create or
change any substantive rights.” Id. Thus, a claim for declaratory relief
under Chapter 86 of the Florida Statues is properly construed under the federal
Declaratory Judgment Act. See id. at 1271-72.

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