Bad Faith

Tampa Federal Court Allows Untimely Expert Testimony in Bad Faith Insurance Case

Published on: November 3, 2014 | by Friedman Rodman Frank & Estrada, P.A.

In Hayas v. GEICO General Insurance Co., a man negligently caused a motor vehicle collision that tragically killed another individual. When the traffic wreck occurred, the man carried liability insurance that was limited to $100,000 per person and $300,000 per incident. Following the fatal crash, the decedent’s estate filed a complaint against the negligent driver and his automobile insurance company. Although a settlement opportunity apparently arose, the insurer allegedly declined to settle the case. Following a jury trial, the decedent’s estate secured a $1.6 million judgment against the driver.

After the judgment was rendered, the driver instituted a bad faith insurance case against his liability insurance company in the Middle District of Florida in Tampa. In support of his case, the negligent driver filed a supplemental expert disclosure with the federal court. The insurance company responded by filing a motion to strike and asked the court to exclude the man’s proposed expert witness and prohibit the witness from offering any testimony in the case.

Middle District of Florida Refuses to Order Summary Judgment in First-Party Bad Faith Case

Published on: October 8, 2014 | by Friedman Rodman Frank & Estrada, P.A.

In Cadle v. GEICO General Insurance Co., a woman was apparently hurt in a 2007 Florida rear-end automobile collision. Immediately following the accident, the woman received medical care at a local hospital. Over the course of the next 28 months, the injured woman was treated for her alleged neck and back harm by a number of doctors. In late 2009, she also underwent surgery related to the vehicle crash.

The injured woman’s automobile insurer was reportedly notified of the accident on the date it occurred. About one year later, the company offered to settle the woman’s underinsured motorist (“UM”) claim for $500, although it was authorized to pay her almost $20,000. Instead of accepting the settlement offer, the woman ,sent a demand letter to her insurance company, seeking the full UM policy limits of $75,000. The insured also provided the company with a copy of her medical records and stated she was considering surgery to treat her accident injuries. The following month, the company offered to settle the woman’s UM claim for $1,000.

Florida Appeals Court Certifies Bad Faith Insurance Claim Question to Supreme Court: Boozer v. Stalley

Published on: September 12, 2014 | by Friedman Rodman Frank & Estrada, P.A.

Florida’s Fifth District Court of Appeals has certified a question of law to the Supreme Court of Florida in a bad faith insurance dispute. In Boozer v. Stalley, a boy was hurt in a motor vehicle collision that was apparently caused by a woman who was covered by two automobile insurance policies issued by related insurers. Following the collision, the guardian of the boy filed a negligence lawsuit against the woman, and her insurer secured an attorney to represent her. Following trial, jurors awarded the boy more than $11 million in damages. The insurance company paid the policy limits of $1.1 million, and the boy was unable to collect the remaining $10 million. Later, the boy’s guardian filed a third-party bad faith insurance claim against the woman’s liability insurance company. The same attorney continued to appear on behalf of the woman at the request of the insurer during post-judgment proceedings.

As part of the bad faith insurance lawsuit, the boy’s guardian sought to depose the at-fault motorist’s lawyer. The attorney refused to be questioned and asserted the attorney-client privilege. The attorney-client privilege requires a licensed attorney to protect most confidential statements made by a client in connection with his or her legal representation from disclosure. Despite this, a client may waive the privilege in a number of ways. After a trial court ordered the attorney to submit to deposition, he appeared as instructed. Although the legal advocate answered general questions posed by the boy’s guardian, the lawyer refused to disclose information he felt was privileged. The deposition was adjourned, and the woman and her attorney filed a petition for review with the Fifth District Appeals Court.

According to the boy’s guardian, his evidentiary requests were appropriate because Florida precedent states he may obtain discovery materials that would have been available to the at-fault driver. The Fifth District disagreed, however, and held that the lower court’s order compelling the woman’s attorney to disclose legally privileged materials was inappropriate and should be quashed. After analyzing the relevant case law, the Fifth District stated precedent shields attorney-client communications from discovery in a first-party bad faith claim. Since Florida case law is currently silent regarding whether attorney-client communications are shielded from discovery in a third-party bad faith insurance case, Florida’s Fifth District Court of Appeals certified the question to the Florida Supreme Court.

Tampa Federal Court Refuses to Sever Bad Faith Claim Against Insurer From Underlying Lawsuit: Jirau v. Wathen

Published on: September 2, 2014 | by Friedman Rodman Frank & Estrada, P.A.

The Middle District of Florida has refused to sever a bad faith insurance claim filed against an automobile insurance company from the underlying negligence action. In Jirau v. Wathen, a man was hurt in a Brandon traffic wreck. Following the crash, the man filed a negligence lawsuit against the allegedly at-fault driver in state court. He also sought underinsured or uninsured motorist coverage from his vehicle insurer. In addition, the man accused his insurance company of acting in bad faith when settling his claim. After the man filed his lawsuit, the insurer successfully removed the case to the Middle District of Florida in Tampa based upon diversity of citizenship. Diversity of citizenship is appropriate only when each of the parties to a lawsuit is a resident of a different state, and the amount in controversy exceeds $75,000.

Following removal to federal court, the injured man sought to have the case remanded back to state court because the at-fault driver was also a Florida citizen. Despite evidence to the contrary, the auto insurer claimed diversity of citizenship existed and asked the court to sever the at-fault driver from the case rather than remand the entire lawsuit. Following a hearing, the federal court granted the injured man’s motion and sent the case back to state court. According to the Middle District of Florida, “the power to sever non-diverse defendants to maintain jurisdiction should be used sparingly” in order to prevent potential prejudice. In response, the insurance company filed a motion for reconsideration as to the bad faith claim pending against it with the federal court.

After reviewing the claims the injured man made against the at-fault driver and his insurer, the court stated that severing the bad faith cause of action would waste judicial resources. Additionally, the court held it would be unfair to require the accident victim to pursue two different cases against the same defendant in both state and federal court. The federal court added that doing so could require the plaintiff to prove damages related to the same accident twice. Since severing the claims would be unnecessarily unfair to the plaintiff, the Middle District of Florida in Tampa denied the auto insurer’s motion for reconsideration.

Middle District of Florida Rules in Favor of Insurer Where No Meeting of the Minds Occurred in Rescinded Settlement Offer: Goodman v. SAFECO Insurance Co. of Illinois

Published on: August 21, 2014 | by Friedman Rodman Frank & Estrada, P.A.

In Goodman v. SAFECO Insurance Co. of Illinois, an insurance company provided bodily injury and other automobile coverage to a woman whose vehicle was involved in a 2012 traffic wreck. Immediately prior to the collision, the owner of the insured vehicle apparently allowed another individual to drive her car. Unfortunately, the man who borrowed the vehicle was involved in an accident while he was operating the insured auto. Following the collision, a plaintiff who was allegedly hurt in the traffic wreck filed a personal injury claim seeking $200,000 from the owner of the vehicle’s insurance company. In response, the insurer offered to settle the plaintiff’s claim for the insured’s bodily injury liability limit of $100,000 per person. Following the offer, the insurance company and the plaintiff reportedly entered into negotiations regarding the plaintiff’s property damage.

A few months later, the plaintiff filed a Civil Remedy Notice of Insurer Violations under Florida Statute Section 624.155. According to the plaintiff, the automobile insurance company failed to act in good faith when it attempted to settle the plaintiff’s car accident claim. In addition, the plaintiff stated her claim could be settled for about $107,000. Later, the insurer withdrew its settlement offer and stated the company was not required to cover the automobile accident. In response, the plaintiff filed a breach of contract lawsuit against the insurer and the owner of the vehicle that allegedly harmed her in a Florida court. The insurance company then removed the case to the Middle District of Florida.

Eventually, the insurer filed a motion for summary judgment against the plaintiff asserting that it could not have breached a settlement agreement with her absent the existence of an enforceable contract. When a party to a lawsuit files a motion for summary judgment, the party is asking the court to rule in its favor without proceeding to trial. In general, such a motion will not be granted unless there is no material issue of fact in dispute and the moving party is entitled to judgment as a matter of law. A court must view a motion for summary judgment in the light that is most favorable to the non-moving party.

Florida’s Fifth District Court of Appeals Holds Man Must Litigate Injury Case Separately From Bad-Faith Insurance Claim: GEICO Casualty Co. v. Barber

Published on: August 18, 2014 | by Friedman Rodman Frank & Estrada, P.A.

The District Court of Appeal of Florida, Fifth District has ruled that a man must litigate his bad-faith claim against an automobile insurance company separately from his personal injury case. In GEICO Casualty Co. v. Barber, a man filed a complaint for uninsured or underinsured motorist benefits from his automobile insurer following an injury traffic crash. The man also filed a Civil Remedy Notice claiming his harm exceeded his policy limits. The insurer responded to the man’s claim by stating it would not offer to pay him the entire policy limits of $10,000.

Several years later, the insurer sent the man a proposed settlement offer of $10,000 after learning he underwent surgery that was apparently related to his accident injuries. Despite the insurer’s proposal, the man refused to accept the company’s offer of settlement.

Eventually, the insurer filed a motion for summary judgment asking the court to rule in the company’s favor. Before the court issued a ruling, however, the injured man amended his complaint and asserted additional claims against the insurance company. After the court held several hearings, it granted the insurer’s motion with regard to the underinsured motorist benefits because the company made a confession of judgment. A confession of judgment normally occurs when one party to a lawsuit agrees to allow the opposing party to enter judgment against it. In addition, the court allowed the injured man to file a second amended complaint including a bad-faith cause of action against the insurer. The insurance company responded by filing an appeal with Florida’s Fifth District Court of Appeals.

Orlando Court Rules on Evidentiary Issues in Bad Faith Insurance Case: Soto v. GEICO Indemnity Co.

Published on: July 29, 2014 | by Friedman Rodman Frank & Estrada, P.A.

The Middle District of Florida in Orlando has refused to allow an automobile insurance company to introduce certain evidence in a bad faith insurance lawsuit. In Soto v. GEICO Indemnity Co., two drivers were involved in a motor vehicle accident in Volusia County, Florida. At the time of the crash, the at-fault driver was insured by GEICO Indemnity Co. Following the traffic wreck, the other motorist sued the at-fault driver and her insurer for damages related to the injuries the plaintiff allegedly sustained in the auto collision. Following a trial before the Circuit Court of the Seventh Judicial Circuit in and for Volusia County, the plaintiff obtained a judgment of more than $100,000 against the driver who caused the accident.

The plaintiff later filed a third-party bad faith insurance lawsuit against the at-fault driver’s auto insurance company, alleging the insurer committed bad faith in handling her claim against the other motorist. In Florida, an insurer has a duty to pay a valid insurance claim in good faith and without unreasonable delay. If an insurance company fails to do so, it may be held accountable.

Both parties to the lawsuit reportedly agreed that the only issue at trial was whether the insurer acted in good faith when it handled the plaintiff’s claim against the at-fault driver. Prior to trial, the plaintiff and the insurer filed a number of motions in limine. In general, a motion in limine asks a judge to determine whether certain evidence may be included or excluded before the finder of fact.

Federal Court in Tampa Remands Bad Faith Auto Insurance Case Back to Pinellas County Court

Published on: July 2, 2014 | by Friedman Rodman Frank & Estrada, P.A.

The United States District Court for the Middle District of Florida in Tampa has remanded a personal injury and bad faith automobile insurance case back to state court. In Hall v. State Farm Mutual Automobile Insurance Co., a woman filed a lawsuit in Pinellas County Circuit Court against her automobile insurance company following a collision with an uninsured motorist. In her complaint, the woman asked the court to award her at least $15,000 in damages related to personal injuries she sustained in the traffic wreck. She also accused her motor vehicle insurer of bad faith. After the woman’s lawsuit was filed, the insurance company removed the case to federal court based upon diversity jurisdiction. The woman responded by filing a motion to remand the case back to state court.

Federal law allows defendants in a lawsuit to remove a case to federal court for a number of reasons, including diversity jurisdiction. In order to establish diversity, the parties to a lawsuit must hail from different states and the amount in controversy must exceed $75,000. Because a plaintiff normally selects his or her desired venue when a lawsuit is filed, a defendant will bear the burden demonstrating that diversity jurisdiction exists. In general, a federal court is required to construe the facts of a case in which diversity jurisdiction is disputed in favor of remand.

According to the plaintiff in the case, the auto insurer failed to establish that the amount in controversy meets or exceeds the statutory requirements. Because of this, the woman argued the federal court lacks subject matter jurisdiction over the dispute. The insurer countered by claiming a demand letter the plaintiff submitted to the insurer several months before that sought to recover the entirety of her $300,000 automobile insurance policy limits establishes that the she seeks to recover more than $75,000. The Middle District of Florida stated although a settlement offer may be relevant in ascertaining the amount in controversy in a diversity jurisdiction dispute, it is not determinative. Because the woman’s demand letter failed to allege her specific damages and the insurer’s settlement offer of only $12,500 supported the plaintiff’s contention that the amount in controversy was well below $75,000, the federal court ordered that the case be remanded back to Pinellas County.

Florida’s Office of Insurance Regulation Looking for Beneficiaries of Multi-Million Dollar, Multi-Agency Life Insurance Settlement Agreements

Published on: January 15, 2013 | by Friedman Rodman Frank & Estrada, P.A.

Florida’s Department of Financial Services, Bureau of Unclaimed Property, holds unclaimed accounts at more than $1 billion dollars. A large portion of this money was obtained through multi-million, multi-state settlement agreements with life insurance companies, including AIG, John Hancock, MetLife, Prudential, and Zurich. All of these companies were previously only using the Social Security Administration’s Death Master File to benefit themselves. They used the file to stop annuity payments to account-holders, but they weren’t using this registry to find beneficiaries that would require new payments.

This is a large example of insurance companies refusing to make the payments to which beneficiaries are entitled. Florida insurance companies are required by law to act in good faith when negotiating and settling a claim, but they often fall short of their fiduciary responsibilities. If you need assistance litigating a bad faith claim to get the compensation you are owed, the South Florida attorneys at Friedman Rodman Frank & Estrada, P.A. have the experience and results you are looking for.

The District Court of Appeals, 4th District recently ruled against the insurance company, American Vehicle Insurance Company (AVIC). AVIC had previously been awarded summary judgment in their favor, where they alleged that there was no bad faith negotiation on their part when they failed to make a settlement soon after the accident. The Court of Appeals was specifically looking to see if there were any material issues of fact for a jury to consider whether or not AVIC acted in bad faith.

The mother of the deceased originally filed suit in Florida against the drunk driver who ran into her daughter, causing serious injuries that induced a coma and later caused her death. The mother claimed the driver’s insurance company acted in bad faith in the immediate months after the accident by failing to offer a settlement. Two-days after the accident the claim was assigned to an employee who quickly assessed the case and decided that the driver was solely at fault, that the injuries exceeded the policy limits, and that the claim should be settled. The AVIC employee attempted to contact the mother, not the injured, and was advised that an attorney was hired. The suit against the driver was filed, and the settlement offers were rejected by the mother of the victim.

The mother was awarded damages in the original case, and decided to sue for bad faith. AVIC moved for summary judgment, arguing that the mother did not have a bad faith claim. The lower court agreed, and the mother appealed, stating that the question of whether AVIC acted in bad faith is determined by their actions, not the action of the claimant. The Court of Appeals agreed with the mother, recognizing that the insurer has an affirmative duty to negotiate settlements. The Court also pointed out that Florida has a stricter standard for summary judgment, requiring that the moving party show conclusively that no material issues remain for trial (Byrd v. BT Foods Inc., 948 So.2d 921, at 923-24 (Fla. 4th DCA 2007). Ultimately the Court stated, “Any delay in making an offer under the circumstances of this case even where there was no assurance that the claim could be settled could be viewed by a fact finder as evidence of bad faith.” The Court reversed the lower court’s ruling in favor of AVIC and remanded the case so the mother could move on to further proceedings.