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IMPROPER RULE 54(B) CERTIFICATION - UIM - BAD FAITH - RAGLAND V. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Ragland v. State Farm Mutual Automobile Insurance Company,[Ms. 1160140, May 19, 2017] __ So. 3d __ (Ala. 2017). This decision authored by Justice Bryan (Bolin, Parker, and Main, JJ., concur, and Murdock, J., concurs in the result), dismisses an appeal by an insured of the circuit court’s dismissal without prejudice of his bad-faith claim against his underinsured motorist carrier. The Court concludes it need not decide whether the dismissal of the bad-faith claim without prejudice “had the requisite elements of finality to support an appeal because, even if we assume it did, we agree that the October 5, 2016, order was improperly certified as a final judgment pursuant to Rule 54(b).” Ms. *8.

The Court holds that the trial court exceeded its discretion in determining that there was no just reason for delay in the entry of judgment in regard to the dismissal of the bad-faith claim without prejudice: “[i]n order to prevail on a bad-faith claim against an insurance company, plaintiff must prove, among other things, the existence of ‘an insurance contract between the parties and a breach thereof by the defendant.’” Ms. *12, quoting National Sec. Fire and Cas. Co. v. Bowen, 417 So. 2d 179, 183 (Ala. 1982). Because the insured’s contract claim for underinsured motorist benefits is still pending in the trial court, and “[b]ecause it is undisputed that Ragland’s bad-faith claim could be rendered moot if State Farm prevails in the pending UIM case between the parties, we conclude that the circuit court exceeded its discretion in concluding that there was no just reason for delay in the entry of a final judgment and by certifying its October 5, 2016, order as final pursuant to Rule 54(b). Accordingly, Ragland’s appeal is due to be dismissed as taken from a non-final judgment.” Ms. *13.

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