A Florida appellate court has partially sided with State Farm in a recent uninsured motorist case, offering a procedural course correction that insurers handling similar disputes may want to keep in mind.
On July 3, the Fifth District Court of Appeal reversed part of a judgment entered by a Duval County trial court in favor of Catherine Hudnall, a State Farm policyholder. Hudnall had received a jury verdict awarding damages following a dispute over uninsured motorist (UM) coverage. While the judgment entered by the trial court limited execution to Hudnall’s $100,000 policy limit, it still reflected the full amount of the jury’s damage determination.
State Farm appealed, not challenging the jury’s finding on liability or damages, but arguing that the trial court erred in entering a judgment for the entire net verdict while a separate bad faith claim remained unresolved. The appellate court agreed with State Farm’s position, ruling that a judgment must align with policy limits when a first-party bad faith claim is still pending.
The decision did not negate the jury’s findings. However, it clarified how those findings should be treated when bad faith litigation could follow. The court referenced two key precedents to support its decision: the Florida Supreme Court’s 2016 opinion in Fridman v. Safeco Insurance Co. of Illinois, and the more recent 2024 Second District ruling in State Farm v. Finson.
Both rulings established that an insured is entitled to a jury determination of the full extent of damages before proceeding with a bad faith action. However, those decisions also emphasized that such a verdict does not automatically justify a judgment exceeding the limits of the applicable insurance policy. The trial court’s judgment, the appellate panel explained, needed to reflect that balance.
The appellate court sent the case back to the lower court and instructed it to issue a revised judgment capped at the $100,000 policy limit. At the same time, the revised judgment can note that the jury verdict may serve as the measure of damages if the plaintiff eventually prevails in the bad faith claim.
“This isn’t about changing the jury’s decision,” the appellate court wrote. “It’s about making sure the judgment complies with established law while leaving room for appellate review and future litigation.”
For insurers, particularly those underwriting auto and fleet lines, the ruling provides a timely reminder of how to navigate the procedural steps in UM claims when there is a chance of further legal action. Ensuring that judgments stay within policy limits, while preserving the legal standing of the jury verdict for potential bad faith proceedings, is key to defensible claims management and litigation strategy.
Although the decision is not yet final and remains subject to further motions, the direction is clear. Courts expect UM verdicts and pending bad faith claims to be handled in a way that respects the boundaries of coverage, even when a jury has determined that actual damages may exceed those limits.
For the insurance business, this case signals that clarity and discipline in judgment language are not just best practices. They are legal requirements that can affect future exposure in ongoing litigation.
