Florida Supreme Court Reinstates $8.47MM Verdict on $100K Timely Tender - Rules Insurer Had Duties Beyond Just Timely Tender of Policy Limits.
|
|
September 23, 2018 - Daniel Santaniello, Esq. and Dale Paleschic, Esq.
|
|
On September 20 , the Florida Supreme Court, in a split decision, released an important opinion that will have a far reaching impact on claims handling for carriers as it relates to a carrier’s obligation and duties toward an insured when the policy limit is or might be in play. In the opinion,
Harvey v. GEICO, General Insurance Company
, (Fla. S. Ct., Case No. SC17-85, Sept. 20, 2018) the Court re-iterated that it was standing by its precedent as espoused in
Boston Old Colony
for the “bad faith” handling of a claim by an insurance carrier, but emphasized that
Boston Old Colony
and its progeny do more than provide a checklist that the insurer must follow.
In applying its concept of “bad faith” to the facts in the Harvey case, the majority overturned a reversal by the Fourth District Court of Appeals decision that had reversed a trial court verdict of $8.47 million in damages against the insurer. The Fourth District Court of Appeals had misapplied
Boston Old Colony
and
Berges
in the majority’s opinion and had relied upon Federal case law interpreting Florida’s bad faith precedent that “does not always hit the mark.”
(Majority op. at 12).
The Court summarized the Harvey facts as follows: the insured was involved in an automobile accident with another driver who died as a result of his injuries from the accident. The driver reported the accident to GEICO and two days later the liability issue was determined adversely to the insured. Four days later a paralegal from the law firm representing the estate called the claims professional and requested a statement from the insured presumably to determine the extent of his assets, other available insurance and if he was in the course and scope of his employment at the time of the accident. GEICO did not relay this request to the insured but had advised the insured of the possibility of an excess judgment and to consider getting personal counsel. Three days later, GEICO tendered its $100,000 policy limits along with sending a release and affidavit of coverage to the estate’s lawyer. As might be expected, the estate’s counsel wrote to GEICO acknowledging receipt of the letter and also noted the refusal to make the insured available for statement. GEICO then informed the insured of the request for the statement when it received this letter. The Insured requested an additional few days to get his personal counsel involved and ultimately never provided any information regarding his finances. GEICO did not relay the insured’s request for the few additional days to consult with personal counsel though the insured specifically asked the claims handler to advise the estate’s counsel. Subsequently, approximately one month after the initial request for a statement, the estate’s counsel returned the check and filed the lawsuit with resulting excess judgment against the insured.
In reinstating the trial court’s judgment, Justice Quince, writing for the majority, stated:
“The obligations set forth in
Boston Old Colony
are not a mere checklist. An insurer is not absolved of liability simply because it advises its insured of settlement opportunities, the probable outcome of the litigation, and the possibility of an exces judgment. Rather,
the critical inquiry in a bad faith is whether the insurer diligently, and with the same haste and precision as if it were in the insured’s shoes, worked on the insured’s behalf to avoid an excess judgment.”
(Majority op. at 10).
The Court went on to state that the proper standard is a “total of the circumstances” standard as expressed in
Berges v. Infinity Insurance Co
., 896 So. 2d 665 (Fla. 2004).
Id.
In the majority’s opinion, and contrary to the analysis of the Fourth District Court of Appeal, the analysis of causation should not focus on the actions of the insured in not securing settlement, but rather on those of the insurer in fulfilling its contractual obligations. An insurer refraining from acting in its own interest can still be acting in bad faith despite the suggestion by the Fourth District Court of Appeals in its decision in the case. Significantly, the Court noted that the significance of GEICO not informing the estate’s counsel of the insured intended actions regarding a statement could not be “overstated.” In the majority’s view because the Estate’s counsel indicated he would have recommended delaying the lawsuit and the personal representative testified she would have declined to file the lawsuit had they taken a statement and learned of the insured’s lack of assets, GEICO had not acted “with due regard” for its insured’s interests and the excess judgment could have been avoided. The dissenting opinions in the case, one penned by Chief Just Canady and another by Justice Polston, in which they each concurred with the other as well as Justice Lawson, would have denied conflict jurisdiction and stated the majority was mischaracterizing the facts and relying on unsupported assumptions and a misreading of precedent. The dissenting opinions felt that the majority opinion “muddies the waters between negligence and bad faith and bolsters ‘contrived bad faith claim.’” (Dissenting Op., C.J. Canady at 25)(internal citations omitted).
Suggestions and Recommendations
The opinion underscores the importance of timely communications between claims professionals, insureds and opposing counsel when there has been a decision to tender and a probability of an excess judgment, especially in cases where it is clear that there has been death, catastrophic injury or an exposure that exceeds policy limits. Insurers should consider establishing protocols and “tender teams” to identify cases where the exposure clearly exceeds policy limits. “Bad Faith” setups today go far beyond simply making a time limit policy demand. Carriers need to scrutinize every communication from a claimant and their attorney. As this decision points out, there is no “safe harbor” in Florida. You should attempt to follow the “mirror image” rule and make reasonable efforts to comply with reasonable requests. This may include proactively advising insureds to be prepared to provide information in such situations and forward and expedite any and all communications (written or verbal) from opposing counsel that seeks any type of affidavit, statement or disclosure from the insured or insurer. Care should be taken in drafting any type of release that might be interpreted as releasing anyone other than the insured or containing conditions such as indemnity or Medicare or unnecessary language, such as disputing liability in the release.
Luks, Santaniello has a Florida adjuster CEU accredited webinar (
Navigating Florida: The Good Faith Webinar
- Course Id Number 105064
)
and a “Good Faith Handbook” that covers the many nuances of Florida third party bad faith case law and best practices for time limit policy demands and tenders. Please contact Dan Santaniello at DJS@insurancedefenses.net to schedule training or receive a copy.
|
|
301 Yamato Road - STE 4150
Boca Raton, FL 33431
T: 888-372-8711 : F: 561-893-9048
|
|
6265 Old Water Oak Road - STE 201 Tallahassee, FL 32312
T: 850-385-9901 | F: 850-727-0233
|
|
About Luks, Santaniello, Petrillo & Jones
|
Our verdicts tell the story.™
Luks, Santaniello, Petrillo & Jones is a Florida Corporate & Insurance Defense Litigation firm. The Law Firm is Peer Review Rated by Martindale-Hubbell. Our mission is to provide our clients with legal services that help them manage risk and reduce exposure. Our goal is to ensure that our clients obtain equal justice in the courtroom. Luks, Santaniello is a member of
The Gavel.net LLC.
nationwide insurance defense network.
Luks, Santaniello defends businesses and insurers in Liability, most insurance lines and Workers’ Compensation matters. The firm has a diversified team of 85+ Insurance Defense Litigation attorneys across nine offices in Miami, Boca Raton, Fort Lauderdale, Fort Myers, Orlando, Tampa, Jacksonville, Tallahassee and Pensacola. Members have tried over 200 cases in Florida State and Federal Courts. We have a strong reputation in defending complicated general liability bodily injury claims involving over treatment, high medicals, letter of protection(s) and questionable surgeries.
Managing Partner Dan Santaniello, Esq. and Tampa Partner Anthony Petrillo, Esq. are
Florida Bar Board Certified Civil Trial Experts
. Partners Christopher Burrows, Esq. and Patrick Hinchey, Esq. are
Florida Bar Board Certified Construction Law Experts
. The firm has a full service Appellate team in South, Central and Northern Florida to assist with summary judgments, motions in limine, discovery objectives, trial strategy and post trial positions. The Daily Business Review selected Luks, Santaniello as finalists for the Most Effective Lawyers for its innovation in filing a Declaratory Judgment Action in a multiple Wrongful Death claim in 2007.
For questions or assistance with your Florida matters, please contact the Managing Partner, Client Relations or your Luks & Santaniello contact.
View Contact Directory Now.
|
|
Contact:
Luks, Santaniello, Petrillo & Jones
Daniel Santaniello, Managing Partner
T: 888.372.8711
E: DJS@insurancedefense.net
|
|
Luks, Santaniello, Petrillo & Jones
Maria Donnelly, Client Relations
T: 954.847.2936
E: MDonnelly@insurancedefense.net
|
|
This law alert is for informational purposes only and does not constitute legal advice. Reviewing this information does not create an attorney-client relationship. Sending an e-mail to Luks, Santaniello et al does not establish an attorney-client relationship unless the firm has in fact acknowledged and agreed to the same.
“
AV®, BV®, AV Preeminent® and BV Distinguished® are registered certification marks of Reed Elsevier Properties Inc., used under license. They are to be used in accordance with the Martindale-Hubbell® certification procedures, standards and policies. For a further explanation of Martindale–Hubbell’s Peer Review Ratings, please visit www.martindale.com/ratings.
|
|
|
|
|
|
|