This Tuesday, the 11th Circuit affirmed a summary judgment granted in favor of State Farm, holding that State Farm was not legally obligated to pay the claim since the amount of damages was in dispute.
Alabama law states that there can be no breach of an uninsured motorist contract, and therefore no claim for bad faith, unless and until the insured proves that he is “legally entitled” to recover. In this case, the record established that the other driver was at-fault. However, the analysis did not stop there.
The Court provided that, to establish that a plaintiff is “legally entitled” to recover, both liability and damages must be proved. Here, the record was clear that State Farm disputed the amount of damages claimed by plaintiff. As such, his claims for breach of contract and bad faith were properly dismissed as premature.
The case is Broadway v. State Farm Mut. Ins. Co., 2017 U.S. App. LEXIS 5350 (March 28, 2017).