A $3 million Florida bad faith insurance claim was affirmed recently by the U.S. Court of Appeals for the 11th Circuit, which found the auto insurer refused to tender its $250,000 policy limits to a plaintiff, even though it was well-established her injuries were clearly in excess of that.
As our Broward car accident attorneys can explain, bad faith insurance, as outlined in F.S. 624.155, occurs when an insurer either unreasonably refuses to pay or properly investigate a claim (first-party) or when an insurer unreasonably fails to defend, indemnify or settle a claim within policy limits or investigate for a different party (third-party). As outlined in the 1995 Florida Supreme Court case of State Farm Mut. Auto. Ins. Co. v. Laforet, an insurer’s duty of good faith involves the duty to refrain from acting solely on the basis of their own interests in settlement.
Claims for bad faith are separate and apart from the original negligence claim that is filed for crash liability, and can result in plaintiffs being awarded triple their actual damages.
In this case, according to the order, the crash in question occurred in late October 2010. Defendant driver reportedly had no lights on at night while attempting to make an illegal left turn.
The insurer was notified of the crash a few days later, at which time it was reported the victim had been airlifted from Key West to Miami with a severe brain injury. Further, a police report submitted to the insurer indicated that its insured (the at-fault driver) was cited by police for failure to yield the right-of-way. The insurer knew the following day that the crash victim had been in a coma for 10 days and also made a determination that its insured was 100 percent at-fault. With this evidence, the appellate court found, a reasonable jury could have concluded that on that date – Nov. 5, 2010 – that the insurance company had all the evidence it needed to conclude the cost of medical expenses and non-economic damages merited a tender of the full $250,000 policy limit. Further, an expert for the company said that by Nov. 10th, the company had expected to pay the full policy limit to resolve the case, given that the victim was still in a coma, had catastrophic facial injury, was undergoing brain surgery, had a feeding tube and was unable to breathe on her own. The facial injury alone would have been grounds to remit the $250,000 policy limit.
And yet, the insurance company refused the husband’s demand to tender the full policy limit until Nov. 22 – after the victim’s husband had filed a personal injury lawsuit on her behalf.
The bad faith claim was litigated over the course of several years, during which plaintiffs made several settlement offers to defendants and the insurer – all of which were rejected. Plaintiffs alleged the insurer’s refusal to settle cost them tens of thousands of dollars and five years of delay on a claim that should have been settled right away after the crash happened – or else at numerous opportunities during the progression of the underlying bad faith lawsuit.
At trial, the parties agreed on the extent of damages – $2.95 million – so the only issue that remained was whether the insurer acted in bad faith. The jury decided the case in favor of plaintiff, and the appellate court affirmed.
Although an auto insurer has no duty to settle any case beyond its policy limits, the appellate panel ruled it was reasonable for a jury to conclude the insurer had all the information it needed by Nov. 5, 2010 to settle the claim for the full policy limits. The fact that it waited until after plaintiffs filed a lawsuit to do so, the court held, constituted bad faith.
Call Fort Lauderdale Injury Attorney Richard Ansara at (954) 761-4011. Serving Broward, Miami-Dade and Palm Beach counties.
Additional Resources:
11th Circuit Upholds $2.9M Bad Faith Verdict Against Geico, July 25, 2018, By Greg Land, Law.com
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Florida Motorcycle Accident Lawsuits May Named Loved Ones Defendants, July 13, 2018, Broward Car Accident Attorney Blog