Humbertson

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

JESSICA HUMBERTSON,

Plaintiffs,

v. Case No: 8:23-cv-1709-MSS-AAS

PROGRESSIVE SELECT

INSURANCE COMPANY,

Defendant.

ORDER

THIS CAUSE comes before the Court for consideration of Defendant

Progressive Select Insurance Company’s Motion for Summary Judgment, (Dkt. 77),

Plaintiff’s response thereto, (Dkt. 82), Defendant’s reply, (Dkt. 83), and the Parties’

Joint Stipulation of Undisputed Material Facts. (Dkt. 81) Upon consideration of all

relevant filings, case law, and being otherwise fully advised, the Court DEFERS

RULING on Defendant’s Motion and STAYS THE CASE to provide the trustee an

opportunity to consider reopening the bankruptcy action and seeking relief on behalf

of the bankruptcy estate of the insured, Jenckes.

I. BACKGROUND

a. Procedural Background

On March 21, 2023, Plaintiff Jessica Humbertson filed this bad faith action in

state court against Defendant Progressive Select Insurance Company (“Progressive”).

(Dkt. 1-1) Progressive removed this action from state court on August 1, 2023. (Dkt.

1) Plaintiff alleges Progressive acted in bad faith under Florida law in handling a bodily

injury claim brought by Plaintiff against Progressive’s insured, Joshua Jenckes, which

resulted in an excess final judgment entered against Jenckes. (Id.) Plaintiff alleges that

Jenckes suffered damages in the excess of his policy limits as a result of Progressive’s

bad faith and she suffers damages as a judgment creditor to Jenckes. (Id.) Progressive

moves for summary judgment on Plaintiff’s claims. (Dkt. 77)

b. Undisputed Facts

The following facts are undisputed in this record for the purpose of resolving

the motions. On February 10, 2019, Plaintiff was involved in a motor vehicle accident

with Joshua Jenckes. (Dkt. 81) At the time of the accident, Progressive insured Jenckes

under an automobile liability policy that provided $25,000 per person in bodily injury

(“BI”) coverage. (Id.) Plaintiff alleges that she suffered significant and permanent

injuries and damages as a result of the collision that were clearly in excess of Jenckes’s

policy limits and that she made multiple written offers to settle her claims against

Jenckes for the policy limits, but Progressive refused to settle the claim.1 On January

28, 2020, Plaintiff filed a personal injury lawsuit against Jenckes. On August 16, 2022,

the court entered an excess judgment against Jenckes in the amount of $469,849.22.

1 Progressive disputes the allegations in this sentence. (Dkt. 8 at ¶¶ 10–12) The Court provides

this allegation for context only, as the truth of whether Progressive is actually liable for bad

faith is not relevant to the resolution of this motion.

(Dkt. 30-34). Later, on August 9, 2023, the court entered an amended final judgment

against Jenckes in the amount of $493,787.74. (Dkt. 48 at 6)

In the meantime, on March 21, 2023, Plaintiff filed this action against

Progressive, bringing one claim for common law bad faith due to Progressive’s alleged

failure to settle Plaintiff’s claim within the policy limits. (Dkt. 1) On May 31, 2024,

while this action was pending, Jenckes filed for bankruptcy. (Dkt. 81) In his

bankruptcy petition, Jenckes listed Plaintiff as a creditor with a nonpriority unsecured

claim in the amount of the excess final judgment. Notably, Jenckes did not list any

bad faith action as an asset of the estate. (Id.; Dkt. 74-1 at 13)2 Notice of the bankruptcy

was sent to Plaintiff’s counsel and was also filed in the underlying personal injury

action. Importantly, Plaintiff did not file any claim or objection in the bankruptcy

action. On September 13, 2024, an order of discharge was entered and granted to

Jenckes. (Id.; Dkt. 74-8) The policy that Progressive issued to Jenckes provides that

“[t]he bankruptcy or insolvency of an insured person will not relieve us of any

obligations under this policy.” (Dkt. 82-1) Progressive now moves for summary

2 Progressive attached Jenckes’s bankruptcy petition as an exhibit to its motion for leave to

file second motion for summary judgment. (Dkt. 74-1) The Parties cite the petition in their

joint statement of agreed facts. (Dkt. 81) In addition, Progressive cites the petition in its

Motion, (Dkt. 77 at 3), and Plaintiff cites the petition in her response. (Dkt. 82 at 7)

Accordingly, the Court takes judicial notice of Jenckes’s bankruptcy petition. (Dkt. 74-1) See

also ITT Rayonier Inc. v. United States, 651 F.2d 343, 345 n.2 (5th Cir. July 20, 1981)

(recognizing that courts may take judicial notice of its own records or those of inferior courts).

In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981), the Eleventh Circuit

adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to

the close of business on September 30, 1981.

judgment, arguing that the discharge of Jenckes’s responsibility for the excess

judgment relieves Progressive of any liability.

II. STANDARD OF REVIEW

Summary judgment is appropriate when the movant can show that there is no

genuine issue of material fact and that the movant is entitled to judgment as a matter

of law. Fennell v. Gilstrap, 559 F.3d 1212, 1216 (11th Cir. 2009) (citing Welding

Servs., Inc. v. Forman, 509 F.3d 1351, 1356 (11th Cir. 2007)). Which facts are material

depends on the substantive law applicable to the case. Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986). The moving party bears the burden of showing that no

genuine issue of material fact exists. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608

(11th Cir. 1991).

Evidence is reviewed in the light most favorable to the non-moving party.

Fennell, 559 F.3d at 1216 (citing Welding Servs., Inc., 509 F.3d at 1356). A moving

party discharges its burden on a motion for summary judgment by showing or pointing

out to the Court that there is an absence of evidence to support the non-moving party's

case. Denney v. City of Albany, 247 F.3d 1172, 1181 (11th Cir. 2001) (citation

omitted).

When a moving party has discharged its burden, the non-moving party must

then designate specific facts (by its own affidavits, depositions, answers to

interrogatories, or admissions on file) that demonstrate there is a genuine issue for trial.

Porter v. Ray, 461 F.3d 1315, 1320-1321 (11th Cir. 2006) (citation omitted). The party

opposing a motion for summary judgment must rely on more than conclusory

statements or allegations unsupported by facts. Evers v. Gen. Motors Corp., 770 F.2d

984, 986 (11th Cir. 1985) (“conclusory allegations without specific supporting facts

have no probative value.”). “If a party fails to properly support an assertion of fact or

fails to properly address another party's assertion of fact . . . the court may grant

summary judgment if the motion and supporting materials . . . show that the movant

is entitled to it.” Fed. R. Civ. P. 56(e).

III. DISCUSSION

Progressive argues that summary judgment should be granted in its favor

because the discharge of Jenckes’s liability for the underlying excess judgment

precludes any action for bad faith against his insurer. Plaintiff responds that Jenckes’s

bankruptcy has no bearing on this matter other than serving as further evidence of the

repercussion of Progressive’s decision to put its own pecuniary interests ahead of its

insured.

a. Florida Bad Faith Law

Under Florida law, when handling the defense of claims against its insured, an

insurer has “‘a duty to exercise such control and make such decisions in good faith

and with due regard for the interests of the insured.’” Macola v. Gov’t Emps. Ins. Co.,

953 So. 2d 451, 455 (Fla. 2006) (quoting Boston Old Colony Ins. Co. v. Gutierrez, 386

So. 2d 783, 785 (Fla. 1980)); see also Perera v. U.S. Fid. & Guar. Co., 35 So. 3d 893,

898 (Fla. 2010). The essence of a bad faith cause of action against an insurer is that the

insurer breached the fiduciary duty owed to its insured either by wrongfully refusing

to defend its insured in a liability context or by wrongfully refusing to settle the case

within policy limits, thereby exposing the insured to a judgment exceeding the policy

coverage. Perera, 35 So. 3d at 899; Cunningham v. Standard Guar. Ins. Co., 630 So.2d

179, 181 (Fla. 1994) (“[T]he essence of a third-party bad faith cause of action is to

remedy a situation in which an insured is exposed to an excess judgment because of

the insurer’s failure to properly or promptly defend the claim.”). Although this duty is

owed to the insured, the injured third-party may nonetheless “stand in the shoes” of

the insured and bring a third-party bad faith action to recover the amount of an excess

judgment without an assignment of the claim. Macola, 953 So. 2d at 455; Fid. & Cas.

Co. of N.Y. v. Cope, 462 So. 2d 459, 461 (Fla. 1985).

b. Bankruptcy

Before turning to the parties’ arguments, some discussion of bankruptcy

principles is warranted. “The federal system of bankruptcy . . . intends to aid the

unfortunate debtor by giving him a fresh start in life[.]” Burnes v. Pemco Aeroplex,

Inc., 291 F.3d 1282, 1289 (11th Cir. 2002) (quoting Stellwagen v. Clum, 245 U.S. 605,

617 (1918)). Under Chapter 7 of the Bankruptcy Code, a discharge “discharges the

debtor from all debts that arose before the date of the order for relief[.]” 11 U.S.C. §

727(b). Thus, “[a] bankruptcy discharge and concomitant injunction against

subsequent actions are designed to give the debtor a fresh start.” In re Jet Fla. Sys.,

Inc., 883 F.2d 970, 972 (11th Cir. 1989).

Although “section 524(a) prohibits a plaintiff from proceeding against a debtor

who has received a discharge of debt in order to recover from the bankruptcy estate,”

a bankruptcy discharge “will not act to enjoin a creditor from taking action against

another who also might be liable to the creditor.” In re Jet Fla. Sys., Inc., 883 F.2d at

973, 976. Thus, “[t]he ‘fresh-start’ policy is not intended to provide a method by which

an insurer can escape its obligations based simply on the financial misfortunes of the

insured.” Id. at 975. As a result, “a plaintiff may proceed against the debtor simply in

order to establish liability as a prerequisite to recover from another, an insurer, who

may be liable.” Id. at 976; In re W.G. Wade Shows, Inc., 234 B.R. 185, 188 (Bankr.

M.D. Fla. 1999) (“It is generally agreed that the scope of Section 524(a) does not affect

the liability of the insurer and does not prohibit proceeding against the Debtor for the

limited purpose to enable the tort plaintiff to establish liability.”); see also Green v.

Welsh, 956 F.2d 30, 35 (2d Cir. 1992) (“[W]e believe that § 524 permits a plaintiff to

proceed against a discharged debtor solely to recover from the debtor’s insurer.”).

Insurance policies owned by the debtor at the time of filing a bankruptcy

petition become a part of the bankruptcy estate. See 11 U.S.C. § 541(a)(1); Fed. Ins.

Co. v. Banyon 1030-32, No. 8:10-cv-682-T-33AEP, 2010 WL 3824200, at *2 (M.D.

Fla. Sept. 27, 2010) (“Insurance policies in a debtor’s name . . . are considered property

of the debtor’s estate[.]”). Insurance proceeds, however, generally do not become a

part of a bankruptcy estate unless the debtor would personally have the right to keep

and receive those proceeds. See Matter of Edgeworth, 993 F.2d 51, 55 (5th Cir. 1993)

(“The overriding question in determining whether insurance proceeds are property of

the estate is whether the debtor would have a right to receive and keep those proceeds

when the insurer paid on the claim. When payment by an insurer cannot inure to the

debtor’s pecuniary benefit, then that payment should neither enhance nor decrease the

bankruptcy estate.”); see also In re Scott Wetzel Servs., Inc., 243 B.R. 802, 804 (Bankr.

M.D. Fla. 1999) (debtor has no cognizable interest in insurance proceeds in a typical

liability policy because “the proceeds will normally be payable only for the benefit of

those harmed by the debtor”). Because these proceeds are not part of the estate,

bankruptcy courts allow third-party tort claimants to proceed against a debtor in name

only to obtain a judgment and then seek payment from the debtor’s insurance

company. In such cases, the debtor would have no personal right to the proceeds of

the policy and thus the payment goes straight to the third-party claimant, not to the

bankruptcy estate.

Similarly, a debtor’s potential claims or causes of action that exist at the time of

filing a bankruptcy petition become a part of the bankruptcy estate. See 11 U.S.C. §

541(a)(1); Jones v. Harrell, 858 F.2d 667, 669 (11th Cir. 1988) (“A trustee in

bankruptcy succeeds to all causes of action held by the debtor at the time the

bankruptcy petition is filed.”). “Once an asset becomes part of the bankruptcy estate,

all rights held by the debtor in the asset are extinguished unless the asset is abandoned

back to the debtor[.]” Parker v. Wendy’s Int’l, Inc., 365 F.3d 1268, 1272 (11th Cir.

2004). At the close of the bankruptcy case, property that is neither abandoned nor

administered remains the property of the estate. Id. “Failure to list an interest on a

bankruptcy scheduled leaves that interest in the bankruptcy case.” Id.

c. Bad Faith and Bankruptcy

With this context, Progressive argues that Plaintiff cannot “stand in the shoes”

of Jenckes to bring this bad faith claim because the underlying debt has been

discharged and Jenckes has no longer been damaged by the excess judgment. In

support of this assertion, Progressive relies on three cases that merit further discussion:

Fid. & Cas. Co. of N.Y. v. Cope, 462 So. 2d 459 (Fla. 1985); Clement v. Prudential

Prop. & Cas. Ins. Co., 790 F.2d 1545 (11th Cir. 1986); and the line of cases beginning

with Camp v. St. Paul Fire & Marine Ins. Co., 127 B.R. 879 (N.D. Fla. 1991) (“Camp

I”).3

In Cope, the Florida Supreme Court held that an injured third-party who had

secured an excess judgment could not maintain a bad faith claim against the insurer

when the injured party has executed a release of his claim against the insured

tortfeasor. 462 So. 2d at 461. The court found that the third party’s cause of action was

“not separate and distinct from, but was derivative of” the insured’s. Id. As a result, a

satisfaction or release of the insured extinguishes the third party’s ability to bring the

cause of action.

In Clement, the insured and third-party claimant agreed to settle the claim for

$75,000, with the understanding that the insured would not be liable for any sum in

excess of the $10,000 policy limits. 790 F.2d at 1546. As part of the agreement, the

insured agreed to prosecute the bad faith action against his insurer. Relying on Cope,

the Eleventh Circuit held that, because the insured was no longer exposed to any loss

in excess of the policy limits, his bad faith claim ceased to exist. Id. at 1548.

3 See also Camp v. St. Paul Fire & Marine Ins. Co., 958 F.2d 340 (11th Cir. 1993) (“Camp

II”); Camp v. St. Paul Fire & Marine Ins. Co., 616 So. 2d 12, 15 (Fla. 1993) (“Camp III”);

Camp v. St. Paul Fire & Marine Ins. Co., 989 F.2d 428, 429 (11th Cir. 1993) (“Camp IV”).

Finally, in Camp I, the plaintiff sued a doctor for medical malpractice. 127 B.R.

at 880. Prior to the resolution of the malpractice action, the doctor filed a Chapter 7

bankruptcy case and received a discharge, which included Camp’s pending claim. The

bankruptcy court allowed Camp’s case to proceed so she could liquidate her claim

against the debtor doctor, but specifically ruled that any judgment obtained would not

be personally enforceable against the debtor doctor. Camp II, 958 F.2d at 341–42.

After an excess judgment was entered in the malpractice action, Camp and the

bankruptcy trustee agreed to jointly prosecute a bad faith claim against the doctor’s

insurer for failure to settle within the policy limits. They agreed that any recovery

would go to the bankruptcy estate, and the plaintiff would only share in those funds as

an unsecured creditor. Camp I, 127 B.R. at 882. The district court granted summary

judgment in favor of the insurer on two bases: (1) by agreeing to share in any recovery

through the bankruptcy estate, Camp lacked independent standing to sue the insurer;

and (2) because the doctor’s obligation to pay the excess judgment was discharged in

bankruptcy, Cope and Clement precluded any bad faith claim. Id. at 882.

On appeal to the Eleventh Circuit, Camp and the trustee argued that

“importing” Cope and Clement into the bankruptcy context was “ill-advised” because

“[u]nder a regime in which a named insured’s bankruptcy insulated all bad faith

exposure, insurance companies might have an incentive to contribute to the named

insured’s bankruptcy, or might refuse to settle clearly legitimate claims if the named

insured’s bankruptcy was imminent or even possible.” Camp II, 958 F.2d at 340. The

Eleventh Circuit found this to raise an issue of first impression under Florida law and

certified to the Florida Supreme Court the question of whether an insured’s discharge

from liability prior to exposure to an excess judgment precludes either the injured

party’s or bankruptcy trustee’s subsequent bad faith action. Id. at 344.

The Florida Supreme Court held that a named insured’s bankruptcy does not

bar a bad faith action by the bankruptcy trustee. Camp III, 616 So. 2d at 13. The court

reasoned that the excess judgment harmed the bankruptcy estate because the estate

“stood in the shoes” of the doctor. Id. at 15. The court further noted that, under federal

bankruptcy law, insurance policies and potential claims owned by a debtor at the time

of his petition become part of the estate. Id. (citing 11 U.S.C. § 541(a); Palmer v.

Travelers Ins. Co., 319 F.32d 296, 299–300 (5th Cir. 1963)). Finally, the court noted

that the language of the policy affirmed that, “even if the insured filed bankruptcy, [the

insurer] would bear the duty to defend and pay off a claim up to the policy limits.” Id.

As such, the Court reasoned that the insurer assumed a duty to the bankruptcy estate

and should have known that its failure to settle a claim would affect the bankruptcy

estate.

Upon return of proceedings to the Eleventh Circuit, the court noted that the

Florida Supreme Court’s holding was contrary to the district court’s ruling and

reversed the decision on that basis. Camp IV, 989 F.2d at 429. The decision was

partially affirmed, however, as the Eleventh Circuit agreed that the district court

properly dismissed Camp as a plaintiff for lack of standing. Id.

d. Analysis

Relying on the above-referenced authority, Progressive argues that Plaintiff can

no longer maintain her bad faith claim given Jenckes’s bankruptcy discharge. Plaintiff

raises three arguments in response: (1) she, as a third-party beneficiary, has an

independent cause of action separate from Jenckes’s rights; (2) an insured’s insolvency

does not preclude a bad faith action against an insurer; and (3) the bad faith action has

no bearing on the bankruptcy and was not discharged. The Court addresses each

argument in turn.

i. Third-Party Beneficiary

Plaintiff argues that Cope and Clement do not stand for the proposition that

Jenckes’s bankruptcy discharge extinguished her claim because she has independent

standing as a third-party beneficiary of Jenckes’s insurance policy. In support of this

assertion, Plaintiff relies on Thompson v. Com. Union Ins. Co., 250 So. 2d 259 (Fla.

1971). In Thompson, the Florida Supreme Court held that “a judgment creditor may

maintain suit directly against [a] tortfeasor’s liability insurer for recovery of the

judgment in excess of the policy limits, based upon the alleged fraud or bad faith of

the insurer in the conduct or handling of the suit.” Id. at 264. In so holding, it adopted

the reasoning from an earlier concurring opinion which stated, in relevant part, that

“every automobile liability insurance policy should be construed as a third-party

beneficiary contract entitling a judgment creditor to recover in a direct action against

the insured [sic] for the excess of his judgment over policy limits in those cases where

the insurer is guilty of negligence or bad faith in handling the claim.” Id. at 262, 264.

Plaintiff further notes that Cope and Clement each involved claims in which the

injured third party released the insured from liability. Thus, Plaintiff concludes that

these cases do not support the proposition that an existing bad faith claim against an

insurer is extinguished upon the insured’s bankruptcy discharge.

Plaintiff is incorrect. As an initial matter, the Cope court rejected any

interpretation of Thompson suggesting that a bad faith claim belongs outright to the

injured third party and is not fundamentally derivative of the duty owed by the insurer

to its insured:

In Thompson this Court, contrary to our prior decision in Sturgis v. Canal

Insurance Co., 122 So.2d 313 (Fla.1960), authorized an injured party to

maintain a bad faith claim against an insurer. The Court based Thompson

on public policy and justified it on the Shingleton v. Bussey, 223 So.2d 713

(Fla.1969), third party beneficiary concept and the right of a real party in

interest to maintain a suit. Nowhere in Thompson, however, did we

change the basis or theory of recovery. We did not extend the duty of

good faith by an insurer to its insured to a duty of an insurer to a third

party. The basis for an action remained the damages of an insured from

the bad faith action of the insurer which caused its insured to suffer a

judgment for damages above his policy limits. Thompson merely

allowed the third party to bring such an action in his own name without

an assignment.

An essential ingredient to any cause of action is damages. In this case

[the insured] originally suffered a judgment in excess of his policy. Before

this action was filed, however, the judgment was satisfied. Upon its being

satisfied [the insured] no longer had a cause of action; if he did not, then

Cope did not. Cope’s action was not separate and distinct from, but was

derivative of [the insured’s].

462 So. 2d at 460–61 (emphasis added). The same rationale applies here. Because

Jenckes has no longer been damaged by the excess judgment, he has no cause of action

against Progressive. If Jenckes does not, Plaintiff does not.

Moreover, to the extent Plaintiff argues that the third party’s release of the

insureds in Cope and Clement is the key factor that extinguished those claims, the

Court rejects the argument. Both courts emphasized that it was the insured’s lack of

damages that extinguished the claim. Cope, 462 So. 2d at 461; Clement, 790 F.2d

1545. By way of further example, the Eleventh Circuit’s discussion in May v. Ill. Nat’l

Ins. Co., 190 F.3d 1200 (11th Cir. 1999) is instructive. In May, the plaintiff was an

administrator ad litem of a probate estate who brought suit to recover against the

decedent’s automobile liability insurer for bad faith refusal to settle a claim resulting

from an automobile accident in which the decedent was at fault. The injured third

party in that case failed to timely file a claim in the probate proceeding. The trial court

granted summary judgment in favor of the insurer on the ground that the estate was

not liable for the excess judgment because the injured party failed to preserve his claim

against the estate. The court explained that “[i]f a deceased insured’s estate is not

obligated to pay the excess judgment, then no cause of action for bad faith exists.” Id.

at 1202; see also id. at 1204 (finding Camp III inapplicable to the facts of the case

because “[i]n the instant case, the estate is insulated from liability by operation of law,

if the failure to file a claim in the probate estate bars the claim”).

ii. Insolvency and Bad Faith

Plaintiff next argues that an insured’s insolvency does not preclude a bad faith

action against the insurer and Progressive’s reliance on the Camp cases is misplaced.

In support, she notes that the issue in that line of cases was whether the bad faith claim

was barred by the fact that the bankruptcy specifically discharged the insured doctor’s

personal liability prior to entry of the excess judgment such that the doctor was never

personally liable for the debt. She then emphasizes that “the Florida Supreme Court

rejected the notion that the bankruptcy extinguished the insurer’s liability for bad faith

and held that the excess judgment against the insured doctor constituted harm to the

bankruptcy estate, which could have been avoided had [the insurer] settled the

malpractice claim.” (Dkt. 82 at 13)

The Court agrees that the timing of the bankruptcy discharge and excess

judgment was a key factor in Camp but disagrees with the notion that the court

implicitly rejected the idea that a bankruptcy discharge extinguishes a cause of action

for bad faith. Instead, the court found that the doctor’s bankruptcy discharge—which

occurred while the malpractice action was still pending—put his bankruptcy estate in

the doctor’s shoes such that it was the bankruptcy estate that was damaged by the

excess judgment. In other words, the discharge in the midst of litigation did not

preemptively absolve the insurer of its obligation to act in good faith, it just extended

that obligation to the estate.

Plaintiff next argues that, while the Florida Supreme Court held that the trustee

acted properly in filing the bad faith claim, the court was silent as to Camp’s ability to

bring the bad faith claim. Stated differently, Plaintiff claims that while the trustee was

authorized to proceed with the bad faith claim, there is no suggestion that Camp could

not have “stood in the shoes” of the bankruptcy estate to bring the claim.4

4 To that end, Plaintiff implies that Florida Supreme Court limited its language to the trustee

because of the agreement between the claimant and the trustee that any recovery would flow

Progressive responds that the Florida Supreme Court was not “silent” because

it addressed the question of whether the named insured’s bankruptcy and discharge

from liability prior to exposure to an excess judgment precludes “an injured party’s or

bankruptcy trustee’s subsequent bad faith cause of action against an insurance

company” by answering that “a name insured’s bankruptcy does not bar a bad faith

action by the bankruptcy trustee.” (Dkt. 83 at 6 n.2); Camp III, 616 So. 2d at 13.

Progressive is correct.

While the Florida Supreme Court did not specifically state that Camp could not

bring an action, it stated that the claim belonged to the estate, and, on that basis, the

Eleventh Circuit affirmed the district court’s dismissal of Camp for lack of standing.

Id. at 15; Camp IV, 989 F.2d at 429; see also Parker v. Wendy’s Int’l, Inc., 365 F.3d

1268, 1272 (11th Cir. 2004) (“Generally speaking, a pre-petition cause of action is the

property of the Chapter 7 bankruptcy estate, and only the trustee in bankruptcy has

standing to pursue it.”); In re Kozich, 406 B.R. 949, 954 (Bankr. S.D. Fla. 2009) (“It

is well established that, if the cause of action is an asset of the estate, ‘the trustee alone

has standing to bring that claim.’”) (quoting Nat’l Am. Ins. Co. v. Ruppert

Landscaping Co., 187 F.3d 439, 441 (4th Cir. 1999)); Whritenour v. Thompson, 145

So. 3d 870, 873 (Fla. 2d DCA 2014) (“A tortfeasor’s bankruptcy filing and discharge

does not change [the procedure for bringing bad faith claims]. The only difference is

through the estate and be distributed on a pro rata basis. The Court rejects this assertion, as

this “agreement” merely reflects what bankruptcy law requires. See 11 U.S.C. § 726.

that the bankruptcy trustee brings the bad faith action against the insurance

company.”) (citing Camp III, 616 So. 2d at 15).

iii. Bad Faith Claim’s Relevance to Bankruptcy

Finally, Plaintiff argues that bad faith claims have no bearing on bankruptcy

proceedings and are not discharged through bankruptcy proceedings. In support,

Plaintiff cites five orders in which bankruptcy courts have permitted third parties to

pursue bad faith claims against a debtor’s insurance company. See E. Coast Brokers &

Packers, Inc. v. Oakwood Place, Inc., No. 8:13-bk-2894-KRM, 2010 WL 11827139,

at *1 (Bankr. M.D. Fla. July 2, 2010) (permitting claimants to pursue recovery against

debtor’s insurance policy and finding claimants waived any claim against debtors in

excess of available insurance proceeds, though such waiver did not release or discharge

any action claimants may have against debtor’s insurance carrier for bad faith); Order

Denying Motion to Reopen Case as Moot, Dkt. 12, In re Read, No. 3:24-bk-2834-BAJ

(Bankr. M.D. Fla. Feb. 21, 2025) (allowing claimant to proceed with pre-petition claim

against debtor’s insurer “solely against the proceeds of any available insurance policy

. . . which may include extracontractual damages if the liquidated auto negligence

claim exceeds Debtor’s coverage”) (Dkt. 82-2); Order Granting Creditor’s Motion for

Relief From the Automatic Stay, Dkt. 54, In re Riette, No. 3:18-bk-2945-JAF (Bankr.

M.D. Fla. Nov. 15, 2019) (allowing creditor to proceed with personal injury action for

purposes of establishing and liquidating his claims against the Debtor and allowing

creditor to “pursue any recovery associated therewith solely from Debtor’s insurance

carrier.”) (Dkt. 82-3); Order Granting in Part Motion to Modify Automatic Stay, Dkt.

22, In re Charles, No. 21-16991-EPK (Bankr. S.D. Fla. Oct. 1, 2021) (denying as moot

motion to lift stay with respect to bad faith claims against debtor’s insurer as the

“automatic stay does not apply to such claims”) (Dkt. 82-4); Agreed Order Granting

Brian Findeson’s Motion for Relief from Stay, Dkt. 258, In re Jason’s Hauling, Inc.,

No. 8:21-bk-00843-MGW (Bankr. M.D. Fla. Sep. 28, 2021) (“In the event the Movant

or his spouse obtains a recovery or judgment against the Debtor, the Movant and his

spouse shall enforce the recovery or judgment against the Debtor’s liability insurance

and insurer(s) . . . . No further order of the Court is necessary for Movant or his spouse

to pursue any claims and rights they may have against the Debtor’s liability insurance

and insurer(s).”) (Dkt. 82-5)

These cases do not change this Court’s analysis. First, two of these cases simply

permit the claimants to liquidate their principal tort claims against the debtor so they

may ultimately recover from the insurance company. (Dkts. 82-3, 82-5) Moreover, in

one case, a bankruptcy court simply found the automatic stay not to apply to a

claimant’s bad faith claims against the debtor’s insurer. (Dkt. 82-4) This holding is

consistent with this Court’s ruling. Namely, the automatic stay in bankruptcy applies

to cases brought against a debtor, not cases brought by a debtor (or by someone

standing in the shoes of the debtor). See, e.g., In re Kozich, 406 B.R. at 953 (“Section

362, by its own terms, only stays proceedings against the debtor.”) (citing 11 U.S.C. §

362) (emphasis in original).

Finally, two cases do appear to authorize the claimant to proceed with a bad

faith action against the debtor’s insurer and require further discussion. In In re Read,

a claimant moved to reopen a bankruptcy case and modify the discharge injunction to

establish and liquidate her pre-petition auto negligence claim against the debtor. (Dkt.

82-2) The bankruptcy court denied the motion as moot, finding the injunction did not

preclude the claimant’s recovery against a third-party insurer. It then stated that the

claimant could “prosecute and liquidate her claims . . . solely against the proceeds of

any available insurance policy under any applicable coverage, which may include

extracontractual damages if the liquidated auto negligence exceeds Debtor’s

coverage.” (Id.) First, the Court notes that the case contains no analysis of the

claimant’s ability to bring a bad faith claim, and there is no indication that the issues

raised here were raised in that case. Moreover, it is not the obligation of the bankruptcy

court to preemptively opine on a claimant’s standing to bring a bad faith claim,

particularly when it had not been raised. Cf. In re Collins, No. 24-11235, 2025 WL

2046098, at *5 (Bankr. D. Kan. July 18, 2025) (noting that “the merits of Creditor’s

potential claims against Progressive are neither ripe for adjudication, nor before the

Court”) (emphasis in original).

In E. Coast Brokers & Packers, Inc., the claimants sought relief from the

bankruptcy stay (not discharge) to proceed with their pre-bankruptcy state court tort

action. 2010 WL 11827139, at *1. The court authorized the claimants to proceed in

order to pursue recovery “to the extent of any proceeds available under Debtor’s

insurance policy[.]” Id. It then stated that the claimants “waive and release any claim

in excess of available insurance proceeds against the Debtor and its bankruptcy estate

and shall not be permitted to pursue recovery against the Debtor outside of the

insurance coverage available[.]” Id. Finally, the court noted that “such waiver does

not release or discharge any action [the claimants] may have against the Debtor’s

insurance carrier for any bad faith failure to resolve [the claims] within applicable

policy limits.” Id. Once again, the case contains no analysis of the claimants’ ability

to bring a bad faith claim, there is no indication that the issues raised here were raised

in that case, and it is not the obligation of the bankruptcy court to preemptively opine

on the claimants’ standing to bring a bad faith claim (particularly when it had not been

raised).

Plaintiff then argues that the language in the policy that the “bankruptcy or

insolvency of an insured person will not relieve us of any obligations under this policy”

preserves Plaintiff’s claim against Progressive. Progressive responds that this provision

simply requires it to defend and indemnify an insured up to the policy limits in an

action against him, even if he files for bankruptcy. Progressive is correct. Notably, the

policy at issue in the Camp cases contained similar language: “If the protected person

or his or her estate goes bankrupt or becomes insolvent, we’ll still be obligated under

this policy.” Camp III, 616 So. 2d at 15. The Florida Supreme Court held that this

language “affirms that, even if the insured filed bankruptcy, [the insurer] would bear

the duty to defend and pay off a claim up to the policy limits.” Id. (emphasis added).

Finally, Plaintiff notes that Progressive previously filed a motion in limine in

this case asserting that Jenckes’s bankruptcy was irrelevant to this bad faith action.

(Dkt. 63) Plaintiff asserts that this qualifies as a judicial admission and once an

admission is made, the subject matter cannot be reopened absent the showing of

exceptional circumstances. The Court rejects this argument, as a legal position taken

in a motion does not qualify as a judicial admission. Cf. Starbuck v. R.J. Reynolds

Tobacco Co., 349 F. Supp. 3d 1223, 1233 (M.D. Fla. 2018) (“Judicial admissions must

be statements of fact that require evidentiary proof, not statements of legal theories.”)

(quotations and citations omitted). Moreover, the assertion that evidence of Jenckes’s

bankruptcy is not relevant to the determination of whether Progressive acted in bad

faith in handling the underlying claim is not inconsistent with the assertion that

Jenckes’s bankruptcy discharge precludes Plaintiff’s claim as a matter of law.

IV. CONCLUSION

The Court takes a moment to emphasize that this analysis is not intended to

support rewarding insurers who operate in bad faith and push their insureds into

bankruptcy thereby relieving them of any liability for bad faith. When an insured who

has been harmed by an excess judgment files for bankruptcy, the bad faith claim

becomes an asset of the bankruptcy estate and the injured third party has a claim

against the estate. The trustee may then prosecute the bad faith claim and any recovery

would be distributed to the estate’s creditors on a pro rata basis. In such a case, the

insurer would still be liable for the same amount of damages. While the injured third-

party claimant may not ultimately receive the full excess judgment, the claimant is in

the same position as all other creditors of the estate who likely will not be made entirely

whole.

Under certain circumstances, summary judgment would be appropriate in

Progressive’s favor for the reasons discussed in this Order. Such a ruling could result

in a windfall for Progressive and an unintended forfeiture for Plaintiff if it is true that

Progressive acted in bad faith. Here, however, it appears from the record that Jenckes

failed to disclose his potential bad faith claim against Progressive in the bankruptcy

proceedings.5 (Dkt. 74-1 at 13) Thus, the Court concludes that the better course of

action may be to STAY entry of judgment to afford Plaintiff the opportunity to bring

this claim to the attention of Jenckes’s bankruptcy trustee to give the trustee an

opportunity to evaluate this claim. If the trustee wishes to pursue the claim, the trustee

may seek to reopen the bankruptcy proceedings and, if permitted to do so, file a Rule

17 motion to be substituted as the real party in interest. See Parker, 365 F.3d at 1272

(allowing bankruptcy trustee to proceed—post bankruptcy discharge—with racial

discrimination claim the debtor failed to disclose in bankruptcy action).

Accordingly, within fourteen (14) days of the date of this Order, the Parties

shall confer, and if they disagree as to this process, they may assert any objections to

this process by way of a motion. The Court will resolve any objections.

If no objection is interposed, the Parties shall take appropriate action to notify

the trustee of this bad faith action. If the trustee seeks to pursue the claim and the

bankruptcy court permits it, the trustee will be given a reasonable opportunity to seek

to intervene in this action. If the trustee evaluates the claim and determines not to

5 As a matter of practicality, creditors often do not file claims in Chapter 7 bankruptcy

proceedings where the debtor has limited assets. See In re Ernandez, No. 15-2775-JCO, 2016

WL 1726729, at *1 (Bankr. S.D. Ala. Apr. 27, 2016) (“This case is what is commonly referred

to as a ‘No-Asset Chapter 7,’ i.e., there are no assets to administer and creditors are not even

required to file claims.”); see also Dkt. 74-2.

pursue it, Progressive shall notify the Court no later than seven (7) days after the

trustee notifies the Parties of that decision.

Upon consideration of the foregoing, it is hereby ORDERED as follows:

1. The Court DEFERS RULING on Defendant Progressive Select Insurance

Company’s Motion for Summary Judgment. (Dkt. 77)

2. The Clerk is DIRECTED to STAY this case.

3. Within fourteen (14) days of the date of this Order, the Parties shall confer

on whether they agree to the process outlined in Section IV of this Order.

If the Parties disagree as to this process, either party may assert an

objection to this process by way of a motion within fourteen (14) days of

the date of this Order.

4. If the trustee evaluates the claim and determines not to pursue it,

Progressive shall notify the Court no later than seven (7) days after the

trustee notifies the Parties of that decision.

DONE and ORDERED in Tampa, Florida, this 26th day of March 2026.

UNITED STATES DISTRICT JUDGE

Copies furnished to:

Counsel of Record

Any Unrepresented Person

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