Heads Up: Plaintiffs Want Insurers to Pay Interest Prior to Bad Faith Determination

Heads Up: Plaintiffs Want Insurers to Pay Interest Prior to Bad Faith Determination

A plaintiffs’ firm has seized on and distorted dicta in a Florida Supreme Court case, Fridman v. Safeco Ins. Co. of Illinois[i], and dicta in a Fourth District Court of Appeal case, 1st Century Centennial Ins. Co. v. Walker[ii], which discussed Fridman, to argue plaintiffs should begin earning interest on the full amount of a jury verdict – without adjustment for policy limits – prior to a bad faith determination ever taking place.

The tactic worked in a trial court but was thwarted by the Second District on April 17, 2024 in its opinion in State Farm Mut. Auto. Ins. Co. v. Finson.[iii] In this important decision, the Second District explained why Fridman did not stand for the proposition that interest should immediately begin accruing on a jury verdict, beyond policy limits, and why the Second District’s Century 21 opinion should not be relied upon for that proposition either.

As the Fourth District explained in Fridman the Florida Supreme Court considered the issues of:

(1) “whether an insured is entitled to a determination of liability and the full extend of his or her damages in the UM case, before litigating the first-party bad faith claim”, and

(2) “whether that determination of damages is then binding, as an element of damage, in a subsequent first-party bad faith cause of action.”[iv]

The Florida Supreme Court answered in the affirmative to both questions and stated the judgment order could make reference to the jury verdict in retaining jurisdiction over the future bad faith claim.[v]

As the Finson court explained, “The only fair reading of the Fridman opinion is an approval of the inclusion of a finding of the jury’s determination of the insured’s amount of damages in excess of the policy limits in a UM judgment – a reference to the amount, but not entry of judgment in that amount.”[vi]

Further, in Finson, the Second District Court of Appeal “respectfully” disagreed with the dicta in the Second District’s 21st Century decision which had interpreted Fridman as having “held that any judgment entered should be for the full amount of the insured’s damages, even though the insured must later proceed with a bad faith action to recover any amount in excess of the policy limits.”[vii]

Had this tactic worked in Finson, the benefits plaintiffs would have received are obvious. In Finson, the plaintiff would have been earning interest on $1,052,593.22, instead of $100,000, pending appeal. To use another example, if a policy limit is $50,000, but a jury returns a verdict of $2,000,000, and an appeal takes a year, the interest on that $2,000,000 would be $186,800!

In addition, the tactic has the added impact of discouraging appeals. If the dicta in Century 21 were followed, insurance companies wanting to pursue an appeal would be risking additional money – to the tune of 9.34% interest – should they lose the appeal, even prior to proceeding to a bad faith determination. For obvious public policy reasons, this could not stand.



The lesson here is: if you see this tactic, be ready with the Finson decision. Should the court err and follow the lead of the Fourth District Court of Appeal, it may be in the insurer’s best interest to appeal to a district court, and possibly to the Florida Supreme Court, to have the split between the Second and Fourth District Courts of Appeals resolved once and for all.




Keep Reading


[i] Fridman v. Safeco Ins. Co. of Illinois, 185 So. 3d 1214, 1222 (Fla. 2016).

[ii] 1st Century Centennial Ins. Co. v. Walker, 254 So. 3d 978 (Fla. 4th DCA 2018).

[iii] State Farm Mut. Auto. Ins. Co. v. Finson, 2024 WL 1669445 (Fla. 2nd DCA, April 17, 2024).

[iv] Finson at *2, quoting Fridman 185 So. 3d at 1219.

[v] Id.

[vi] Finson at *3 (emphasis added).

[vii] Finson at *2, quoting 21st Century at 981.