Two cases decided by the same Florida Appellate Court decades apart, leave the existence of a direct duty in doubt from a Primary Liability Carrier to an Excess Liability Carrier.
In the earlier of the two cases, Florida's First District Court of Appeal held that there is no direct duty to an Excess Carrier from the Policyholder's (or other Insured's) Primary Carrier. Hartford alleged that it was the Excess Carrier and claimed that The Travelers was the Primary Carrier acting in Bad Faith. "We further find Hartford's remaining claim that Travelers owes a direct duty to Hartford not cognizable under Florida law." Download Hartford v. Travelers (Fla. 1st DCA 1989), review denied, (Fla. 1990).
In 2007, three different distinguished Judges of Florida's First District Court of Appeal reached the opposite conclusion. "Therefore, [the Primary Carrier] owed [the Excess Carrier in this case] a duty of good faith." Download Progressive American Insurance Co. v. Nationwide Insurance Co. (Fla. 1st DCA Case No. 1D06-2159, Opinion Filed February 14, 2007).
Primary Liability Carriers will have a hard time adjusting their conduct to meet the demands of Florida Insurance Law, until the apparent conflict in the Florida case law is resolved.
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