Florida Court: Insurer Required to Cover $15M Car Accident Verdict

An auto insurer’s failure to comply with the state’s Claims Administration Statute, F.S. 627.426, meant no genuine issue of material fact was left to consider regarding insurance coverage of an absconded drunk driving suspect who allegedly killed five people in a horrific crash.

Plaintiffs, parents of one of those killed, sued defendant driver for wrongful death resulting from the crash. The incident happened on I-95 outside Miami, when defendant drove his mother’s vehicle onto the shoulder of the highway, plowing into seven other vehicles that had just been involved in a chain reaction collision and had parked in the emergency lane. Victims ranged in age from 22 to 57. (Plaintiff’s son was a recent university graduate.)

Defendant driver’s blood alcohol level was 0.127, well above the legal limit of 0.08, and that was several hours after the crash. He also smelled of alcohol, a trooper noted, and allegedly admitted to drinking at a local nightclub prior to the collision.

The 26-year-old defendant, however, had no intention of sticking around for trial on five DUI manslaughter charges, for which he faced a maximum sentence of 75 years in prison. He was a real estate appraiser with no criminal history, he fled the country before trial. He has family in Nicaragua, but his whereabouts are still unknown.

At the civil trial, he was represented in absentia by a trial attorney hired by his car insurance company. His mother told jurors she had no idea where he is.

Jurors awarded car accident wrongful death plaintiffs $15 million in damages to plaintiffs in economic damages, as well as another $350,000 in punitive damages.

With the question of the driver’s liability settled, the issue then became who was going to pay for it.

Auto insurer notified defendant driver of its reservation of rights because the driver failed to cooperate with the insurer’s investigation. In fact, numerous reservation of rights letters were issued. Subsequent to this, the auto insurer appointed an attorney to defend driver in the civil lawsuit – and this representation extended for years.

After jurors decided the case in favor of plaintiffs, insurer sought to deny coverage on the basis of the coverage-defense of breach of cooperation.

However, before the appellate court, this defense failed because insurer did not comply with the claims Administration Statute, which states liability insurers can’t deny coverage on the basis of this defense unless:

• Insurer knew or should have known within 30 days of the defense, asserted this in a notice of reservation of rights given to named insured by registered official via certified mail to the last known address of insured or by hand delivery;
• Within two months of receiving a summons and complaint naming insured either gives written notice of refusal to defend insured or obtains a non-waiver agreement from insured or retains independent counsel agreeable to both parties.

Just based on the plain language of the policy, the court held insurer failed to meet these basic requirements. Not only did insurer not send a written refusal to defend within 30 days, insurer continued to defend the driver in court for years. For this reason, insurer was liable to pay damages to wrongful death plaintiff.

Call Fort Lauderdale Injury Attorney Richard Ansara at (954) 761-4011. Serving Broward, Miami-Dade and Palm Beach counties.

Additional Resources:

GEICO v. Mukamal, Aug. 23, 2017, Florida’s Third District Court of Appeal

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