Florida 4th DCA Reiterates Insurers Negligence Not Enough to Sustain Bad Faith Claim

by Rumberger Kirk & Caldwell
Contact

Rumberger Kirk & Caldwell

Directs Judgment to be Entered in Favor of Insurer

In GEICO v. Harvey, (Fla. 4th DCA Jan. 4, 2017), Florida’s Fourth District Court of Appeal held that the trial court erred in denying the insurer’s motion for directed verdict on the insured’s bad faith claim. In doing so, the Fourth District reminded courts and litigants that an insurer’s mere negligence is handling a claim is insufficient to support a finding of bad faith.

In Harvey, the insured was involved in an automobile accident resulting in the death of the other driver. The insured’s policy with GEICO provided $100,000 in coverage. Following an $8.47 million judgment against the insured in the underlying automobile negligence suit, the insured brought a bad faith claim against GEICO. The jury found in favor of the insured, with the trial court denying GEICO’s motion for directed verdict and subsequent motion for judgment notwithstanding the verdict.

In evaluating whether GEICO acted in bad faith, the Fourth District noted that the “totality of the circumstances” must be considered in light of the factors set forth in the seminal bad faith case of Boston Old Colony Insurance Co. v. Gutierrez, 386 So.2d 783, 785 (Fla. 1980). The Fourth District in turn examined each of these factors in the context of the facts presented at trial and concluded that “there was no factual basis to sustain the bad faith judgment.” These facts included promptly notifying the insured of the possibility of an excess judgment and the unconditional tender of policy limits 9 days after the accident. Based upon these facts and others, the Fourth District remanded the case with instructions to enter judgment in favor of the insurer.

Notably, while the Fourth District found insufficient evidence to sustain a bad faith claim, the court nevertheless recognized that there were in fact deficiencies in GEICO’s claims handling. Specifically, the Fourth District noted that GEICO’s adjuster failed to relay information to the Estate regarding when the insured and his counsel would be available to provide a statement previously requested by the Estate, with testimony presented that the Estate would not have filed suit had the statement been provided. There was also evidence that the adjuster had received some deficient performance reviews and at times had difficulty managing her workload.

The Fourth District pointed out however, that: “[N]egligence alone is insufficient to sustain a bad faith award. An insurer's imperfect handling of a claim does not, by itself, equate to bad faith; the essence of a bad faith claim is that the insurer put its own interests before that of the insured.” The mere fact that “GEICO could have acted more efficiently in handling the insured’s claim” and could have perhaps “improved its claim process” the facts did not demonstrate bad faith.

The Fourth District also noted in this case that the insured was aware that the Estate had requested a statement and did nothing to facilitate that request despite having the assistance of personal counsel. Pointing to that conduct, the court stated that in addition to bad faith conduct on the part of the insurer, the insurer’s bad faith must have also caused the excess judgment; “where the insured’s own actions or inactions result, at least in part, in an excess judgment, the insurer cannot be liable for bad faith.”

It is, to say the least, rare for a Florida state court to conclude, as a matter of law, that an insurer did not act in bad faith. Harvey provides support, however, that judgment as a matter of law is appropriate in some circumstances, even if claims handling deficiencies exist. As further demonstrated by Harvey, an insurer has an even greater chance of success where the insured’s own conduct hinders the settlement process.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Rumberger Kirk & Caldwell | Attorney Advertising

Written by:

Rumberger Kirk & Caldwell
Contact
more
less

Rumberger Kirk & Caldwell on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.