On April 15, 1994, Billy the Kid's Buffet restaurant suffered a severe fire loss. The restaurant was owned by Talat Enterprises and was insured by Aetna Casualty and Surety. The restaurant was closed for four or five days and then re-opened for business. During its closing, Aetna paid the insured $10,000. Later in April, the restaurant was closed for nearly two weeks by order of the Department of Health.

In June, 1994, Talat requested that the property's damages be appraised and it hired the services of a public adjuster. In late July, 1994, the public adjuster sent the insurer a proof of loss claiming a property loss of more than $141,000 and a loss of business income of more than $290,000. After filing for bankruptcy in September, 1994, the insured sued Aetna for breach of contract. Rather than hear the suit, the bankruptcy court ordered the parties to arbitrate the claim.

In February, 1995, the arbitrators agreed on an appraisal award totaling more than $331,000 to cover both the personal property and lost income. In March, 1995, Aetna paid the entire arbitration amount to Talat. However, Talat pursued a bad faith claim against the insurer. Aetna filed for summary judgment, claiming that there was no basis for a bad faith claim since it promptly paid the arbitration award. Summary judgment was granted in favor of Aetna. In its decision to grant summary judgment, the lower court pointed out that the insurer complied with state law, paying the arbitration award within sixty days of it being established.

Talat's appeal was passed to the state's Supreme Court with a question of whether a bad faith claim could be pursued once the state's statute was met through court ordered arbitration. The high court reviewed the question in light of the statute and answered that, once timely payment was made by the insurer, Talat lost its standing for pursuing a bad faith claim. (Editor's note: the arbitration payment stood to close the claim).

Talat Enterprises, Incorporated dba Billy the Kid's Buffet, Appellant v. Aetna Casualty and Surety Company dba Aetna Life and Casualty, Appellee. FlaSCt. No. SC 93287. Filed March 2, 2000. CCH 2000 Fire and Casualty Cases, Paragraph 9585.