Tag: Florida Insurance Bad Faith Lawyers

The U.S. Court of Appeals for the Eleventh Circuit (which covers Florida) recently reversed an important lower Florida court’s decision which awarded an insurance bad faith plaintiff (Bottini) $30 million in a case involving uninsured/underinsured motorist breach of contract claims.

The vehicle involved in the accident at the heart of the claim had been underinsured under the requirements of Florida law; still the plaintiff’s estate demanded that Geico, from which the plaintiff had purchased $50,000 of uninsured motorist coverage, render the maximum payment under the policy. Geico refused, indicating that it was still conducting its own investigation to determine whether the insured had been at fault in the accident. As a result, the motorist’s estate filed a civil remedy notice of insurer violation with the Florida Department of Financial Services (a prerequisite to filing a bad faith claim against an insurer). 

While there are frequently insurance disputes over coverage, damages, or liability – sometimes claims alleging insurance bad faith or plaintiffs seeking extra-contractual liability – there is no comprehensive definition of “good faith” in Florida; therefore, the full extent of what a “showing of good faith” means remains unresolved when it comes to liability insurers declining to cover the insured against whom a third party has asserted a claim.

The Eleventh Circuit has perhaps provided the most comprehensive definition, in stating that “Coblentz” agreements (settlement devices that can be used only when an insurer refuses to defend an insured) must be free from bad faith, collusion, and fraud, and entered with efforts to minimize liability. Still, those who defend insurers—and insurers themselves—are still left wondering what type of evidence specifically demonstrates that a Coblentz agreement should not be enforced for a lack of good faith.

The longstanding standard of what constitutes bad faith in Florida was determined by the Florida Supreme Court almost 40 years ago. The Court determined that an insurer has a duty to use the same degree of care and diligence as someone “of ordinary care and prudence.” Insurers must investigate the facts, give fair consideration to settlement offers and–where a reasonably prudent person would–pay total recovery.

However, two recent appellate decisions have made some important changes to what constitutes a bad faith insurance claim in the context of third-party liability claims, as we discuss below.

Eleventh Circuit Decision

The first of those decisions—by the Eleventh Circuit—upheld a lower court decision finding that Geico deciding to offer settlement limits twenty days from the first notice of the claim was not done in good faith as a matter of law. The court ultimately upheld the jury verdict in favor of plaintiffs, finding that the jury was reasonable and had enough evidence to conclude that Geico had acted in bad faith.

The U.S. Eleventh Circuit Court of Appeals (covering Florida) recently made a decision helpful to insurance companies fighting insurance bad faith claims. Specifically, the court held that no reasonable jury could find that an insurer’s failure to disclose information about additional insurance in its statutory insurance disclosure rose to the level of bad faith.

Florida Law: Contents of Policies

In this case, a driver struck a pedestrian, who was badly injured. When the driver’s insurer (Allstate) offered full policy limits to claimant, the claimant rejected the offer. Several months later, the claimant informed the insurer that they were willing to settle and requested that the insurer provide disclosure pursuant to Florida law, which lists what every insurance policy must specify. Specifically, every policy must specify:

Florida common law also recognizes that insurers must exercise good faith in handling claims against their insureds. If an insurer is found to have acted in bad faith, it is liable for the entire judgement against the insured in favor of the injured third party, including any amounts necessary beyond the policy limits.

Recently, the 11^th Circuit Court of Appeals upheld a ruling in support of an insurance company, clarifying the importance of what evidence is required in order to prove that a claimant has suffered from a permanent injury.

The bad faith case filed in the Middle District of Florida involved an insurance claim originally filed against Geico in 2009 for allegedly failing to provide the claimant—Catherine Cadle—with the maximum payout/settlement under her motorist policy for injuries she was supposedly suffering from due to a 2007 car accident. Geico responded that Cadle had failed to provide sufficient evidence that she actually suffered from a permanent injury.

Permanent Injuries

In claims involving allegations of permanent injuries, an insurer is entitled to rely on the documents provided by the claimant’s attorney; however, reliance on these documents cannot amount to bad faith (in other words, a court will not hold that an insurance company acted in bad faith in only relying on the documents provided by the plaintiff and failing to do their own investigation).