When Does the Bad Faith Action Accrue?
Some jurisdictions require dismissal or abatement of the bad faith action pending the resolution of the underlying coverage and/or liability issues. For example, the Florida Supreme Court has held that a bad faith claim is premature and does not accrue in a first-party action until there has been a final determination of liability and damages on the contract claim. See Vest v. Travelers Insurance Co., 753 So. 2d 1270 (Fla. 2000); see also Pulley v. Preferred Risk Mutual Insurance Co., 897 P.2d 1101 (Nev. 1995); Bartlett v. John Hancock Mutual Life Ins. Co., 538 A.2d 997 (R.I. 1988). Where the issue is the insurer’s bad faith refusal to pay, abatement should be mandatory. For example, in Corrente v. Fitchburg Mut. Fire Ins. Co., 557 A.2d 859 (R.I. 1989), the Supreme Court of Rhode Island held: In effect, we cited with approval the test adopted by the Supreme Court of Alabama in Dutton, that: In the normal case in order for a plaintiff to make out a prima facie case of bad faith refusal
