An excess judgment, , is not always a prerequisite to a bad-faith action. The second recognized circumstance involves stipulations known as Cunningham agreements under Florida law. Cunningham v. Standard Guar. Ins. Co., 630 So. 2d 179, 182 (Fla. 1994). These agreements involve the situation where there is not a previous excess judgment but an insurer and a third-party claimant enter into an agreement and stipulate to try the bad-faith issues first. The parties further stipulate that if no bad faith is found, the third-party claimant will settle for the policy limits, thus protecting the insured from exposure to an excess judgment. Cunningham agreements have been held by this Court to be the "functional equivalent" of an excess judgment. Cunningham, 630 So. 2d at 182. This Court has explained: In Cunningham, we simply approved a procedure in which the parties could avoid the time and expense of going through a trial to obtain a final judgment. In following that procedure, the parties agree and the courts recognize that a stipulated final judgment has the same force and effect as a final judgment reached through the usual judicial labor of a trial when the parties agree that it shall. Under a Cunningham agreement, the insurer's actions protect the insured against an excess judgment.