Source: https://insuranceclaimsbadfaith.typepad.com/insurance_claims_badfaith/jury_instructions/
Timestamp: 2019-04-25 11:53:54+00:00

Document:
FLORIDA STANDARD BAD FAITH JURY INSTRUCTIONS TRUMP SPECIAL REQUEST.
On St. Patrick's Day in 2017, in an officially unreported and virtually uncitable decision, In re Hintz (Stalley v. Allstate Ins. Co.), No. 16-14816, 2017 WL 1033670 (11th Cir. March 17, 2017), a plaintiff-appellant argued that the District Court committed reversible error in giving Florida Standard Jury Instructions on Bad Faith.
In particular, the plaintiff-appellant argued in this third-party bad faith case that the insurance carrier bears the burden of proving that there was no realistic possibility of settlement within policy limits when the same carrier rejected a settlement demand in the underlying case.
An Eleventh Circuit panel affirmed the District Court in this case.
Arguing that the giving of Standard Jury Instructions is reversible error is all but an insurmountable hurdle. And so it was here.
RELEASED FOR THE HOLIDAYS! BAD FAITH, Coblentz, & VERDICT FORMS!
The Eleventh Circuit has specifically found that question two of the verdict form—“Do you find the consent judgment entered into by [Antonio James Jimenez] was reasonable in amount and not tainted by bad faith, fraud, collusion or without any effort to minimize liability?”—is an accurate statement of Florida law and has upheld the use of the question as a special verdict form interrogatory. Mid-Continent Cas. Co., 534 Fed. Appx. at 928 (upholding use of the Special Verdict Form Interrogatory and explaining that “Florida law could not be clearer as to the elements necessary to enforce a consent judgment. Subsequent to the entry of the agreement, the injured party must bring an action against the insurer and prove coverage, wrongful refusal to defend, and that the settlement was reasonable and made in good faith.”).... The special interrogatory question on the verdict form has specifically been approved by the Eleventh Circuit for use in bad faith claims involving Coblentz agreements. See id.
Parenthetically, once again a Federal Court in Florida insists on calling a consent judgment with an assignment of bad-faith rights a "Coblentz" agreement in any case in which the liability carrier refuses to defend. The name comes from a case decided by a Federal appellate court: "In Coblentz v. American Surety Company of New York, the Fifth Circuit held that 'if a liability insurer is informed of an action against its insured, but declines to defend the insured, the insurer may be held to a consent judgment entered in that action, absent fraud or collusion.' 416 F.2d 1059, 1062-63 (5th Cir. 1969)." Jimenez v. GEICO, No. 6:10–cv–640–Orl–37KRS, 2015 WL 12844296, at *1 n.1 (M.D. Fla. April 28, 2015).
UNDER LAW AND FACTS ON REQUESTED JURY INSTRUCTION.
The authorities cited by Plaintiff do not establish the existence of a “presumption” under Florida law in a jury trial setting regarding the possible outcome of settlement efforts. This Court does not read Powell as creating any such presumption; instead, as noted earlier, this Court construes the statement in Powell that “[a]ny question about the possible outcome of a settlement effort should be resolved in favor of the insured” as an accurate, well-established statement of the movant's burden on a motion for directed verdict—the context in which that statement was made. Plaintiff has identified no Florida state court decision discussing or approving a jury instruction informing the jury that it should resolve “any question about the possible outcome of a settlement effort” in favor of the insured. No binding Eleventh Circuit precedent to this effect has been brought to the Court's attention either. Furthermore, Plaintiff's proposal of language requiring “conclusive proof” by an insurance company to overcome the supposed “Powell presumption” is wholly lacking in support. Thus, this Court concludes that the portion of Plaintiff's proposed Special Instruction 3 quoted earlier in this order is not an accurate statement of Florida law in the context of jury instructions, and accordingly this Court concluded that it was not appropriate to include that proposed language in the jury instructions in this case.
Stalley v. Allstate Ins. Co., No: 6:14-cv-1074-Orl-28DAB, 2016 WL 3282371, at *6 (M.D. Fla. June 10, 2016), appeal docketed, No. 16-14816 (11th Cir. July 11, 2016).
In an earlier appearance of Stalley, on an earlier record, the same District Judge ruled that the record at that time potentially supported Powell and accordingly denied Allstate's motion for summary judgment at that time. The Court's stated rationale included the Powell rule. See Stalley v. Allstate Ins. Co., No. 6:14-cv-1074-Orl-28DAB, 2016 WL 1752764, at *8 (M.D. Fla. April 29, 2016), quoting Powell v. Prudential Property & Casualty Insurance Co., 584 So. 2d 12, 14 (Fla. 3d DCA 1991), review denied, 598 So. 2d 77 (Fla. 1992).
The Powell rule of initiating settlement negotiations when the likely damages in the underlying case are greater than available policy limits ("when damages are great") and when the insured's underlying liability is probable ("when liability is probable"), is not a hard-and-fast legally constructed duty despite being called a "rule." Instead, it varies with the facts, as the rulings in Stalley so clearly display.
California Law Initiates Settlement Negotiations or Exposure to Bad Faith Damages.
On June 11, 2012, the Ninth Circuit Court of Appeals aligned California law with modern case law which requires a Liability Insurance Company to initiate settlement negotiations when liability of its Policyholder or other Insured has become reasonably clear (and damages are great, meaning likely in excess of policy limits, as in this case): Yan Fang Du v. Allstate, (9th Cir. June 11, 2012), Download Yan Fang Du v. Allstate (9th Cir. 06.11.12). The consequence of not initiating settlement negotiations is exposure to Bad Faith Claims in the ordinary case. Parenthetically, in this particular case, the Ninth Circuit panel actually upheld the District Court's rejection of the Appellant's claim of reversible error, because the appellate panel agreed with the District Judge that there was no evidentiary basis for a Jury Instruction to this effect, in this particular case.
The Ninth Circuit did not use the word, "initiate," however. Failure to "effectuate" settlement when the underlying liability is reasonably clear can constitute Insurer Bad Faith in California under a Jury Instruction approved by the Ninth Circuit in this case.
In determining whether Deerbrook Insurance Company breached the obligation of good faith and fair dealing owed to Mr. Kim, you may consider whether the defendant did not attempt in good faith to reach a prompt, fair, and equitable settlementof Yan Fang Du’s claim after liability [of its insured Kim] had become reasonably clear.
The presence or absence of this factor alone is not enough to determine whether Deerbrook Insurance Company’s conduct breached the obligation of good faith and fair dealing. You must consider Deerbrook Insurance Company’s conduct as a whole in making this determination.
A second ruling is also noteworthy. In its decision, the Ninth Circuit also firmly held that the "genuine-dispute doctrine" simply does not apply outside of First-Party Cases under California law. Specifically, the doctrine does not apply to Third-Party or Liability Insurance. It is simply no defense to a Liability Insurer accused of Bad Faith under California law, that the Liability Insurer genuinely and legitimately contested its Insurance Coverage as a reason for its failure to settle the underlying claims against its Policyholders.
The author is indebted to Mr. Gene Murray for forwarding this decision to my attention.
Florida Bad Faith Instructions Change Florida Insurance Bad Faith Law.
I hope that you will find this to be useful and productive.
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Jury Instructions Committee Alterations to "Insurer Bad Faith" Standard Instructions.
The Florida Bar Standard Jury Instructions Committee has recommended a complete new wardrobe for the Standard Instructions in Florida Civil Cases. On March 4, 2010 the Florida Supreme Court authorized the publication of these new clothes, and some new proposed "Standard Instructions," in an enormously long opinion which you can download here: Download In re Standard Jury Instructions in Civil Cases (Fla. Case No. SC09-284, Opinion Filed March 4, 2010). This opinion and its appendix of proposed new Standard Jury Instructions is also published as In re Standard Jury Instructions in Civil Cases, 2010 WL 727521 (Fla. March 4, 2010)(subscription required to access Westlaw).
The Standard Instructions are all renumbered and regrouped. "Insurer's Bad Faith" is now addressed in several proposed Standard Jury Instructions, numbered 404.1 through 404.13, inclusive. Several of the proposed changes do not appear to be substantive changes concerning Insurer Bad Faith Claims, but some may have the effect of changing the outcome of Jury Trials in Bad Faith Cases.
Newly proposed SJI 404.2 provides that "(Claimant)[Defendant] must prove [his][her][their] claim(s) [and defenses] by the greater weight of the evidence." Whatever the substantive accuracy or inaccuracy of this assertion, it is a change from the current opening Instruction, MI 3.1 b, which does not advise the Jury of who has what burden of proof, but instead instructs the Jury on what they should determine from all that they have seen and heard during the Trial: "If the greater weight of the evidence does not support the claim of (claimant), your verdict should be for (defendant). However, if the greater weight of the evidence does support the claim of (claimant), your verdict should be for (claimant)."
The Jury in an Insurer Bad Faith Case is likely to be confused by this unnecessary change in language from SJI MI 3.1 b, to proposed SJI 404.2, above. It is not the Jury's job to determine whether one party or another has met her, his or its burden of proof. That is the Judge's job. Rather, the Jury's job is to review all the evidence, regardless of who introduced it, and then determine on the full record whether or not the "greater weight of the evidence" supports the claim.
The proposed SJI 404.2 evidences an effort to be fair by eliminating that part of the current Instruction that the Jury's "verdict should be for (claimant)" if the Jury determines that the manifest weight of the evidence supports the claim in the given case. There are Defenses based on alleged Facts to consider, too, which the proposed change would include and the current SJI MI 3.1 b does not address. Inherently, SJI MI 3.1 b is premised on an idea that all Defenses that may be available in Insurer Bad Faith Cases must always be based on Law rather than on Fact, so this is a good change to recommend to that extent, but not in the proposed language.
Proposed SJI 404.5 is totally new. It would address "only" Cases involving "Medical Malpractice Insurer's Bad Faith Failure to Settle," according to the new Committee Comment. This is ostensibly premised on a Florida Statute, Section 766.1185 (2009). This Statute purports to apply to "all actions for bad faith against a medical malpractice insurer relating to professional liability insurance coverage for medical negligence". To begin with, the continuing validity of this Statute is highly questionable on Equal Protection grounds advanced by various parties. See Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" § 3:2 (2009 Supplement West Publishing Company).
a. Deposition of all claimants named in the complaint or amended complaint.
b. Deposition of all defendants named in the complaint or amended complaint, including, in the case of a corporate defendant, deposition of a designated representative.
c. Deposition of all of the claimants' expert witnesses.
d. The initial disclosure of witnesses and production of documents.
e. Mediation as provided in s. 766.108.
(b) Either party may request that the court enter an order finding that the other party has unnecessarily or inappropriately delayed any of the events specified in subparagraph (a)2. If the court finds that the claimant was responsible for such unnecessary or inappropriate delay, subparagraph (a)1. shall not apply to the insurer's tendering of policy limits. If the court finds that the defendant or insurer was responsible for such unnecessary or inappropriate delay, subparagraph (a)2. shall not apply to the insurer's tendering of policy limits.
(c) If any party to an action alleging medical negligence amends its witness list after service of the complaint in such action, that party shall provide a copy of the amended witness list to the insurer of the defendant health care provider.
(d) The fact that the insurer did not tender policy limits during the time periods specified in this paragraph is not presumptive evidence that the insurer acted in bad faith.
Fla. Stat. § 766.1185(1)(a)-(d) (2009). The Statute expressly provides in Subsection (2) that certain factors -- which appear in somewhat altered form in the newly proposed Instruction 404.5 -- apply "[w]hen subsection (1) does not apply". Fla. Stat. § 766.1185(2) (2009). Since the Legislature expressly intended for the events it enumerated in subsection (1) to be determined first, before any of the events which the Legislature thereafter enumerated in subsection (2) are determined, it is certainly incongruous if not misleading to blow past the subsection (1) events entirely as if they did not exist and as if they are not worth mentioning even in passing, and go directly to (2).
One last change remains for discussion this day. Proposed SJI 404.9 breaks out the language of current SJI MI 3.1 c, which is simply that in cases without claims for mental distress, the Jury should be instructed: "If your verdict is for (claimant), the court will award damages in an amount allowable under Florida law." Proposed SJI 404.9 would add a new title to hang down over this language like a banner, that it is the "Concluding Instruction When Court to Award Damages". Maybe, maybe not. But the change is not necessary and the consequences of the change are not known, and may not be intended.
As it has done in the past when authorizing publication of the Jury Instruction Committee's recommendations, the Florida Supreme Court has carefully also stated that "we express no opinion on their correctness and remind all interested parties that this authorization forecloses neither requesting additional or alternative instructions nor contesting the legal correctness of the instructions." In re Standard Jury Instructions in Civil Cases, 2010 WL 727521 *5 (Fla. March 4, 2010).
Moreover, even then, "[t]he instructions as set forth in the appendix, fully engrossed, shall be effective when this opinion becomes final." The opinion was issued on March 4, 2010. In re Standard Jury Instructions in Civil Cases, 2010 WL 727521 *5 (Fla. March 4, 2010).

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