No Breach of Contract Action Necessary for Bad Faith

Can an insurer be liable for bad faith under §625.155 F.S. after appraisal when there is no underlying breach of contract lawsuit? The 4th DCA, in Cammarata v State Farm allowed the insured to proceed with a bad faith suit although the insured never filed a breach of contract suit. The 4th DCA ruled that resolution of a breach of contract suit in favor of the insured is only one of several alternative prerequisites necessary to perfect a statutory cause of action for bad faith. The opinion determined that an appraisal award in an amount more than offered by the insured, was tantamount to a favorable resolution necessary to proceed with a bad faith action. 

The Cammaratas suffered damaged to their home from the 2005 storm, Hurricane Wilma. State Farm estimated the damage as below the policy deductible. The Cammaratas demanded appraisal. Both parties petitioned the court to appoint a neutral umpire. The umpire issued an award in an amount above the State Farm deducible, but less than the Cammarata’s estimate. State Farm paid the award and the court dismissed the underlying petition to appoint an umpire. The Camaratas then sued State Farm for bad faith.  A breach of contract suit was never filed.