Source: https://insuranceclaimsbadfaith.typepad.com/insurance_claims_badfaith/um-uninsured-motorist-and-uim-underinsured-motorist/
Timestamp: 2019-04-25 11:59:34+00:00

Document:
NEVADA CARRIER'S ESTOPPEL DEFENSE COMES UP SNAKE EYES.
An underinsured motorist (UIM) policyholder's bad faith claims were not barred by claim preclusion, i.e., by res judicata or estoppel, where the bad faith claims were based on the UIM carrier's alleged conduct after the policyholder had prevailed in arbitration on her claim for the full UIM policy limits. She filed suit to enforce the arbitration award and obtained a judgment in her favor, following which the carrier paid the UIM policy limits and the policyholder dismissed her case. Searcy v. Endurance Ins. Co., 243 F. Supp. 3d 1146 (D. Nev. 2017).
The UIM carrier defended its conduct occurring after the policyholder filed suit to enforce the arbitration award and, in this case, after the judgment confirmed the arbitration award, on the ground that the policyholder's bad faith claims should have been brought before the conduct occurred, in basic and simple terms. The District Judge disagreed. And so, in the end, yet another gamble in Nevada did not pay off.
PERFECTION IS NOT REQUIRED. BUT MEDICAL EXPERT TESTIMONY IS: HOLDING.
In Duncan v. GEICO Gen. Ins. Co., No. 8:17-CV-40-T-30TGW, 2017 WL 4574605 (M.D. Fla. October 13, 2017), the Court held that perfection is not required in the handling of an Uninsured Motorist (UM) claim to avoid a bad faith claim in Florida.
But medical expert testimony is required, the same Court held, if the bad faith UM claim is based on the carrier's alleged handling of the policyholder's permanent injury. Since the plaintiff-policyholder did not introduce expert medical evidence into the record that he was permanently injured, the District Judge granted the UM carrier's motion for summary judgment on his bad faith claim.
DESPITE BAD FAITH, REPORTING, CURRENT POLITICIANS: HEALTHCARE COVERAGE IS REALLY STILL THERE.
Is Healthcare Coverage still available under the Affordable Care Act? Absolutely.
Can you and can your clients still sign up?
Will you and will your clients be able to sign up now if you want?
Answers to these and other important questions are reported in an excellent article by Haeyoun Park, "Yes, You Can Still Enroll in Obamacare: Five Answers to Questions About Getting Covered" (New York Times online, posted on Saturday, October 14, 2017).
PLAUSIBLE PENNSYLVANIA BAD FAITH CLAIMS OVER UM INVESTIGATION AND EVALUATION.
After bad faith claims were dismissed under Pennsylvania law in this Federal case, amended bad faith claims related to alleged investigation and evaluation of uninsured motorist (UM) claim stated claims upon which relief could be granted, in Meyers v. Protective Ins. Co., NO. 3:16-CV-01821, 2017 WL 4516712 (M.D. Pa. October 10, 2017).
DESPITE BAD FAITH, REPORTING: HEALTHCARE COVERAGE IS REALLY STILL THERE.
... where UM coverage has not yet been decided.
Another Federal case has lined up in favor of abating and not dismissing a statutory bad faith claim in Florida in a case for UM coverage, where coverage has not yet been determined: "The Court, consistent with its past rulings on this issue, considers abatement of the bad faith claim to be the appropriate remedy." Cooper v. Progressive Am. Ins. Co., No: 5:17–cv–70–Oc–30PRL, 2017 WL 784816, at *2 (M.D. Fla. March 1, 2017).
ALLEGATIONS OF BAD PERFORMANCE REQUIRED, WHEN BAD FAITH MEANS BAD PERFORMANCE.
On Halloween, the Third Circuit Court of Appeals affirmed a Rule 12(b)(6) dismissal of claims including bad faith claims in Ensey v. Government Emp's Ins. Co., No. 15-1933, 2016 WL 6407379 (3d Cir. October 31, 2016).
The Third Circuit also took jurisdiction to decide on appeal the District Court's grant of summary judgment to the insurance carrier on the last remaining count of the policyholder's complaint in this case.
Ensey v. Government Emp's Ins. Co., No. 15-1933, 2016 WL 6407379, at *3 (3d Cir. October 31, 2016).
The policyholder apparently argued her insurance bad faith claim in terms of New Jersey's law of the covenant of good faith and fair dealing which is implied in all contracts. At any rate, that is how the Third Circuit addressed her fact allegations about UM/UIM coverage options which, it said, were legally insufficient to support a claim of bad faith here.
She argued that the implied covenant is breached when the defendant either acted in bad faith or demonstrated some other kind of inequitable conduct in the course of performing a contractual obligation. The Third Circuit agreed with this statement of New Jersey law, but held that the policyholder's fact allegations were legally insufficient to meet that legal standard. Accordingly, the Third Circuit affirmed the dismissal of her bad faith claims against the carrier in this case. Ensey v. Government Emp's Ins. Co., No. 15-1933, 2016 WL 6407379, at *3-*4 (3d Cir. October 31, 2016).
WHEN DELAY MEANS NOT JUST DENIAL, BUT POSSIBLY BAD FAITH.
State Farm argues at length that Hackler cannot show bad faith because she cannot show a decision to deny benefits. (See ECF No. 55 at 4-5.) However, as courts in this district and elsewhere have recognized, sitting on a claim for an extended period is functionally equivalent to a denial. (Citations omitted.) As such, the Court finds State Farm's understanding of the requirements of showing bad faith needlessly narrow.
Hackler v. State Farm Mut. Auto. Ins. Co., No. 3:14-cv-00531-MMD-VPC, 2016 WL 5402743, at *4 (D. Nev. September 26, 2016).
U.M.: DISPUTING DAMAGES, AVOIDING ATTORNEY'S FEES TO INSURED IN OREGON.
Our determination that “damages due the insured” is a reference to the amount of damages (if any) that the insured would be entitled to recover from the uninsured motorist provides a clear answer to the remaining question. Although we agree with plaintiff that defendant's pleadings were enough to put at issue the possibility that plaintiff would recover no benefit in the UM action, the allegations raised issues only as to the damages that the insured would be entitled to recover from the uninsured motorist.
In its answer, in response to plaintiff's allegation that he sustained noneconomic damages, defendant admitted that plaintiff sustained “some” injury in the collision with the uninsured motorist but disputed “the nature and extent of [p]laintiff's alleged injuries.” On its face, that allegation disputes only the amount of plaintiff's damages. Although plaintiff contends the allegation could have permitted a determination that plaintiff is entitled to zero noneconomic damages, ORS 742.061(3) does not preclude disputes about individual categories of damages. A dispute about whether plaintiff sustained economic damages would still be a dispute regarding the amount of the damages due the insured as a result of the collision.
Next, in response to plaintiff's allegation of economic damages for medical expenses, defendant's answer disputed “the reasonableness and necessity of some of [p]laintiff's accident-related medical expenses.” In response to two of plaintiff's requests for admissions, defendant similarly disputed some, but not all, of plaintiff's alleged injuries: “Admit that Plaintiff sustained ‘some’ injury as a result of the accident alleged in the Complaint; however, Defendant denies the nature and extent of Plaintiff's injuries” and “Admit that some of the treatment was necessary; Defendant denies the reasonableness, necessity, relatedness and extent of some of Plaintiff's treatment.” Again, facially, those allegations dispute only the amount of plaintiff's damages.
Please Read The Disclaimer. ©2016 by Dennis J. Wall, author of Litigation and Prevention of Insurer Bad Faith (3d ed. Thomson Reuters West in 2 Volumes, with Supplements). "Attorney's Fees" payable to insureds by their insurance companies are addressed in particular in Volume 2 id., § 13:12. All rights reserved.
FLORIDA UM BAD FAITH CLAIM ABATED UNDER SECTION 624.155.
In Johnson v. State Farm Mut. Auto. Ins. Co., No: 6:15–cv–1942–Orl–31TBS, 2016 WL 1127748 (M.D. Fla. March 21, 2016) (Presnell, J.), the plaintiff in State Court received a jury verdict in excess of policy limits on a UM claim. She then asked for and received leave to amend to allege a bad faith claim. The Florida State Court Judge left entry of the judgment open, however.
The UM carrier removed the case to Federal Court. The Federal Judge denied the plaintiff's motion to remand the case to State Court. The UM carrier then asked the Federal Judge to dismiss the bad faith claim. As there was no final determination of damages in the UM case because there was no final, appealable judgment, the Federal Court granted relief but refused to dismiss. Instead, the Federal Judge abated the UM bad faith claim "pending entry of judgment and any appeal taken by State Farm." Johnson v. State Farm Mut. Auto. Ins. Co., No: 6:15–cv–1942–Orl–31TBS, 2016 WL 1127748, at *2 (M.D. Fla. March 21, 2016) (Presnell, J.).
The Federal Judge did not say so, but his reasoning was apparent that the State Judge retained jurisdiction over the UM case for at least the purpose of entering judgment on the jury verdict.
Please Read The Disclaimer. ©2016 by Dennis J. Wall, author of Litigation and Prevention of Insurer Bad Faith (3d ed. Thomson Reuters West in 2 Volumes, with Supplements). Abatement of UM bad faith claims in particular is discussed in Volume 2, § 11:24, "Other defenses: Defenses potentially available in all claims and cases of first-party insurance bad faith." All rights reserved.
Abate That Premature Bad Faith Claim? Dismiss? What to Do?
FLORIDA BAD FAITH ACTION AFTER U.M. VERDICT: DISCOVERY, DAMAGES, DUE.
In the first-party bad faith case of Batchelor v. GEICO Casualty Co., 2014 WL 3906312 (M.D. Fla. June 9, 2014), GEICO contended that it would be deprived of due process if it could not get answers to its damages interrogatories.
The interrogatories certainly appear to be standard, form interrogatories used in U.M. cases. They inquire into the plaintiff's damages sustained in the given accident, what physicians she has seen, what injuries she claims, what effects the accident had on her employment history and capacities, and so on.
The interrogatories were served in a bad faith case.
Ms. Donna Batchelor is GEICO's insured. She was injured in an auto accident. She had U.M. coverage of $30,000.00 under a policy issued by GEICO. After GEICO refused to pay the U.M. coverage, Donna Batchelor sued GEICO and a jury in a Florida State Court determined her damages at $1.8 Million.
The U.M. trial court granted GEICO's motion to reduce the verdict to the U.M. policy limit of $30,000.00. GEICO appealed the result (except, certainly, the trial court's ruling limiting the plaintiff's recoverable damages to the U.M. policy limits). Florida's Fifth District Court of Appeal affirmed.
GEICO served its U.M. interrogatories in the instant first-party bad faith lawsuit. A motion to compel filed on behalf of GEICO presented the argument that GEICO would be denied due process in the bad faith lawsuit if it were not allowed to serve U.M. interrogatories inquiring into the plaintiff's damages from the accident. This argument was based on a State District Court of Appeal Judge's concurring opinion in a case, which was followed by two U.S. District Judges in two later cases.
The due process argument was successful in front of a U.S. Magistrate Judge in the bad faith case, who granted the motion to compel the plaintiff to answer interrogatories about what damages she incurred in the auto accident, until the argument reached a third U.S. District Judge, in the Middle District of Florida.
As the District Judge pointed out, the due process argument which originated in a State DCA Judge's concurring opinion and "which is wholly unsupported by authority--is contrary to Florida law and, indeed, to the ... majority opinion itself."
GEICO's position might have been made stronger if the interrogatories in question were written to ask what damages Ms. Batchelor claimed in this bad faith lawsuit. Instead, the interrogatories are a form used in U.M. cases directed to the issue of damages sustained in the underlying automobile accident. So, GEICO's position here was that due process would be denied if a U.M. carrier could not send out another set of U.M. interrogatories to ask about damages already fixed by a verdict, reduced in a judgment to U.M. policy limits by motion, and affirmed on appeal to a State District Court of Appeal.
This Court cannot discern any due process violation from this procedural posture. Defendant fully litigated the issue of the extent of Plaintiff's damages, argued that issue on appeal, and obtained a ruling from the appellate court. It has received all of the process to which it is due.
Batchelor v. GEICO Casualty Co., 2014 WL 3906312 *3 (M.D. Fla. June 9, 2014).
GEICO's position may yet prevail. One of the U.S. District Court cases mentioned as accepting this argument on certain facts, is the subject of a pending appeal in the U.S. Eleventh Circuit Court of Appeals. The Batchelor opinion may be one District Judge's comment on that pending issue.
Defendant's position would improperly read the words "award or" out of the statute. If the legislature intended only for the amount of a judgment to establish the damages, those words would be superfluous.
I was going to include the interrogatories for you to see, so I copied them from the motion to compel from the electronic court file on PACER. They are not quoted in the Court's opinion, although the Court's decision in Batchelor becomes clearer on reading the defendant's interrogatories and the plaintiff's answers and objections. When I copied them from the Court File, however, the copy came with a formatting command embedded in the motion to number the paragraphs, so the formatting started over again at paragraph number 1 instead of beginning with paragraph number 5 and ending with paragraph number 15. Renumbering some eleven paragraphs is more work than I anticipated, and so I intend to post the interrogatories separately later.
Affirmative Defenses in First-party Bad Faith Case in Florida.
SETTLEMENT DEMAND LETTER SUPPORTS "NOTION" OF $75,000+.
In the case of Wilt v. Depositors Insurance Co., 2013 WL 6195768 (M.D. Fla. November 26, 2013), a U.S. Magistrate Judge recommended that a plaintiff's motion for remand in an insurance case be denied. The U.S. District Judge "adopted, confirmed, and approved" the report "in all respects," but added a thought of her own.
The District Judge added to the observation of the Magistrate Judge that settlement demand letters ordinarily do not, standing alone, establish that the amount in controversy is in excess of $75,000 for federal jurisdiction to attach in diversity cases. However, in this case the District Judge added the thought that the settlement demand letters in this case "provide sufficient information to support the notion that Plaintiff is seeking in excess of the jurisdictional minimum." Wilt v. Depositors Insurance Co., 2013 WL 6195768 *1 n.1 (M.D. Fla. November 26, 2013).
To put this in context, the Magistrate Judge's report and the District Judge's "adoption, confirmation and approval" of that report "in all respects," were based on three (3) independent reasons for ruling.
First, this is an uninsured/underinsured motorist coverage case in which the plaintiff-policyholder is seeking the remaining UM limits of $275,000.00 out of a policy limit of $300,000.00. She alleged in her complaint that the UM policy limit of $300,000.00 was not enough to compensate her for the injuries she sustained in an automobile accident caused by an underinsured motorist. That alone was sufficient for the Magistrate Judge to recommend that the plaintiff's motion for remand be denied as to the required $75,000+ amount in controversy, Wilt v. Depositors Insurance Co., 2013 WL 6195768 *7 (M.D. Fla. November 26, 2013), and for the District Judge to agree. Wilt v. Depositors Insurance Co., 2013 WL 6195768 *1 (M.D. Fla. November 26, 2013).
Second, in a second count in addition to the coverage count, the plaintiff in this case alleged a claim for insurer bad faith. She accordingly attached a copy of her Florida Civil Remedy Notice of Insurer Violation to her complaint. In the CRN, the plaintiff-policyholder's attorney wrote that "'her claim has a value well in excess of the remaining available [UM/UIM] policy limits of $275,000.00'". Wilt v. Depositors Insurance Co., 2013 WL 6195768 *3, *4 (M.D. Fla. November 26, 2013). This, too, was an independent basis for the Magistrate Judge's recommendation that the plaintiff's motion to remand be denied in this case. She, the Magistrate Judge, wrote that "[t]he Civil Remedy Notice attached to [the] Complaint also supports a finding that the amount in controversy exceeds $75,000.00. This is further evidence from which it can be reasonably inferred that the amount in controversy exceeds $75,000.00." Wilt v. Depositors Insurance Co., 2013 WL 6195768 *7 (M.D. Fla. November 26, 2013). The District Judge again agreed. Wilt v. Depositors Insurance Co., 2013 WL 6195768 *1 (M.D. Fla. November 26, 2013).
The Magistrate Judge and the District Judge seemed to part company on the District Judge's third ground for approving the report, however, namely on whether the settlement demand letters in this particular case could be a basis for denying remand. The Magistrate Judge took the view that she had already recommended for two good and sufficient reasons that the plaintiff's remand motion be denied. To the Magistrate Judge, then, "it is not necessary to consider the letter memorializing the $300,000 settlement offer [i.e., plaintiff's settlement demand] to conclude that the amount in controversy is satisfied." Wilt v. Depositors Insurance Co., 2013 WL 6195768 *7 (M.D. Fla. November 26, 2013).
However, the District Judge's take was a little different. To her, the "settlement demand letters here" were a part of the "reasonable deductions, reasonable inferences and reasonable expectations" which a Federal Court is permitted to draw or to take into account, as the case may be, from a complaint and its exhibits in considering a motion to remand. Wilt v. Depositors Insurance Co., 2013 WL 6195768 *1 * n.1 (M.D. Fla. November 26, 2013).
So, there you have it, the context of what one U.S. District Judge meant when she wrote that settlement demand letter supports the "notion" of $75,000+.
Elizabeth Caserta was walking with her boyfriend along a roadside at night. An unknown driver of a car hit them both. Ms. Caserta's boyfriend, Edward Carcarey, died from his injuries. Ms. Caserta "suffered minor injuries and subsequent emotional distress." Caserta v. GEICO General Insurance Co., 2012 WL 6604613 *1 (3d Cir. December 19, 2012)(case involved Pennsylvania substantive law).
Mr. Carcarey's mother "had an automobile insurance policy with GEICO that included uninsured motorist coverage." Edward Carcarey was clearly an "insured." Ms. Caserta contended that she, too, is an insured and sued GEICO for alleged breach of the insurance contract and for Bad Faith. Caserta v. GEICO General Insurance Co., 2012 WL 6604613 *1 (3d Cir. December 19, 2012).
Our task, as a federal court sitting in diversity, is “to apply state law and not to form it.” Coviello, 233 F.3d at 716 (3d Cir.2000). For purposes of bystander liability under Pennsylvania law, Caserta is not “closely related” to Edward Carcarey, her boyfriend. As a result, we conclude that her claim fails as a matter of law, and she cannot recover under Suzanne Carcarey's GEICO policy.
Caserta v. GEICO General Insurance Co., 2012 WL 6604613 *3 (3d Cir. December 19, 2012). The appellate panel accordingly affirmed the lower court's Judgment on the Pleadings in favor of GEICO in this case. Parenthetically, although the panel did not mention it, apparently the Judges were of the prevailing view that where there is no Coverage, there is no Bad Faith either. See December 20, 2012 article posted here on Insurance Claims and Bad Faith Law Blog.
If there had been Pennsylvania State Court decisions denying the existence of the tort under the circumstances alleged by Ms. Caserta, the decision would probably make sense. However, by reaching a decision that despite case law to the contrary, several Federal Judges decide that State law should not and would not recognize the legal existence of a tort here, the panel actually did what it said it would not do, which in the panel's own quoted words, is to form State law and not to apply it.
Merry Christmas and Happy Holidays to All in 2012, and a Happy New Year to All in the year to come!
EVIDENCE AFTER CIVIL REMEDY NOTICE OF INSURER VIOLATION HELD INADMISSIBLE.
In a First-Party Bad Faith Case in Florida, a Federal Court was confronted with a Plaintiff's-Policyholder's First Motion in Limine to Limit Evidence at Trial to the Relevant Time Period.
The case is Alexander v. GEICO, 2012 WL 5382051 (M.D. Fla. November 1, 2012). The Plaintiff, Randolph Alexander, was caught in an automobile accident involving four vehicles in 2005. He made a claim for Coverage under his GEICO Uninsured/Underinsured Motorist Policy. It has limits of $50,000/$100,000. Mr. Alexander filed suit against GEICO for his "UM benefits" in 2007. Alexander v. GEICO, 2012 WL 5382051 *1 (M.D. Fla. November 1, 2012).
After he filed his UM benefits lawsuit, Mr. Alexander filed two Civil Remedy Notices of Insurer Violation ("CRNs") outlining GEICO's failure to pay, in essence. The first CRN was filed in 2008, and the second in 2009.
Thereafter, Mr. Alexander obtained a verdict, apparently in the UM case against GEICO, and apparently for the damages caused to him by the other parties in the automobile accident. The verdict amount was entered into a Judgment after the amount was reduced by setoffs to $212,356.95.
The District Judge did not reveal when Mr. Alexander's Bad Faith Claim or Claims was or were alleged in a lawsuit, but his Florida First-Party Bad Faith Claims could only have been alleged under Florida Statute Sections 627.727(10), Florida's UM Statute, and 624.155, Florida's Bad-Faith Statute. Following the Verdict and Judgment, "Alexander seeks to collect the balance of the verdict from GEICO based upon its alleged bad faith failure to settle within the $50,000 policy limits." Alexander v. GEICO, 2012 WL 5382051 *1 (M.D. Fla. November 1, 2012). Parenthetically, the Federal Court did not explain whether or in what way GEICO had a duty in the first place to settle Mr. Alexander's claims, if any, against the other parties involved in the four-vehicle automobile accident.
Instead, this decision revolves around only Mr. Alexander's First Motion in Limine to Evidence at Trial to the Relevant Time Period. In that motion, Mr. Alexander asserted that the relevant time period for any and all evidence on the Bad Faith Claims ended when the time period for responding to his second CRN ended. His argument ran to the effect that his filing of a CRN is a condition precedent to First-Party Bad Faith Claims like his and, that being so, "the improper conduct alleged must necessarily pre-date the expiration of the CRN." Alexander v. GEICO, 2012 WL 5382051 *1 (M.D. Fla. November 1, 2012).
[S]ection 624.155(3)(b) requires the CRN to “state [ ] with specificity ... the facts and circumstances giving rise to the violation,” which leads to the logical conclusion that the conduct constituting the alleged bad faith must have occurred prior to the plaintiff filing the CRN.
Although the parties have not cited Florida case law directly on point—and the Court is unable to locate any—this conclusion also appears in alignment with related Florida bad faith case law.
Thus, evidence of GEICO's actions taken after the expiration of the second CRN is not relevant to the issue of bad faith and will not be admissible at trial.
Alexander v. GEICO, 2012 WL 5382051 *3 (M.D. Fla. November 1, 2012).
Well, that takes care of that, probably.
FIRST-PARTY BAD FAITH IN FLORIDA: RECENT CASES.
It is well settled in Florida that a statutory First-Party Bad Faith action is premature until two conditions have been satisfied: First, the First-Party Insurance Company raises no defense which would defeat Coverage including but not limited to situations where the Coverage Defense has been raised and adjudicated against the Insurance Company by a Florida Court of competent jurisdiction; and, Second, the actual extent of the Insured's loss has been finally determined, meaning that a recognized determination has been made as to liability and the extent of damages.
Recognizing these twin conditions, a Florida Appellate Court has recently held that an Appraisal Award can qualify as a required "final determination". Trafalgar at Greenacres, Ltd. v. Zurich American Insurance Co., 2012 WL 3822215 *2 (Fla. 4th DCA September 5, 2012). This decision appears to resolve an open question of Florida law as to whether an Appraisal Award can ever qualify as a final determination of the Insured's loss, meaning both liability and the extent of damages, for purposes of Florida's Bad Faith Statute, Fla. Stat. § 624.155. See 2 Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith § 11:24 (2012 Supplement, 3d Edition West Publishing Company).
It has also been recently held, although not deciding an open question in Florida law, that a Policyholder pursuing a statutory First-Party Bad Faith cause of action cannot allege that there has been a final determination of liability where the Policyholder's Breach of Contract case is still pending. Lime Bay Condominium, Inc. v. State Farm Florida Insurance. Co., 94 So. 3d 698, 699 (Fla. 3d DCA 2012). See, in addition, Maraist v. State Farm Mut. Auto. Ins. Co., 2012 WL 3536759 *1 (N.D. Fla. 2012)(granting Underinsured Motorist Carrier's Motion to Dismiss its Insured's Bad-Faith Claim because Florida law "requires not an allegation but a determination" of liability and the extent of the Insured's damages [emphasis added]).
Although having the right to do so during the sixty-day window following the filing of the CRN, GEICO never attempted to obtain a statement under oath from King, to receive medical authorization allowing access to King's medical providers and treating physicians, or to conduct a compulsory medical examination of King to ascertain the severity of his damages. Nor did GEICO seek review of King's medical records by a physician or an opinion from an outside attorney as to the value of King's claim. In sum, GEICO made no efforts to investigate the claim beyond review of the demand package, either at the time of the initial settlement offer or upon receipt of the CRN.
The Court further held that the Civil Remedy Notice at issue in that case was sufficiently specific to satisfy Florida law, in part because "[g]iven the settlement letter detailing King's medical expenses and prognosis received by GEICO just two months prior to the CRN, common sense dictates how GEICO might have responded given the information provided." King v. GEICO, 2012 WL 4052271 *8 (M.D. Fla. September 13, 2012).
FILLING OUT "OFFICIAL" ONLINE NOTICE FORM NO BAR TO DISMISSAL.
In Ardrey v. USAA Casualty Insurance Co., 2012 WL 831620 (M.D. Fla. March 12, 2012), Download Ardrey v. USAA Casualty Ins. Co. (M.D. Fla. Case No. 8.12cv08, Order Filed March 12, 2012) PUBLIC ACCESS, a Federal District Court considered a Motion to Dismiss a Bad Faith Claim under Florida's Bad-Faith Statute. USAA based its Motion to Dismiss in part on an alleged failure of a USAA Uninsured Motorist Policyholder to comply with a statutory condition precedent of completing a legally sufficient Civil Remedy Notice form.
Because none of these specific violations were identified in the CRNs, USAA argues that Plaintiff's unfair settlement practices claim based on these alleged violations must be dismissed.
Plaintiff opposed the Motion to Dismiss in this regard on the ground that she went to the website of the Florida Office of Insurance Regulation (formerly the Florida Department of Insurance), and there she filled out a form Civil Remedy Notice or "CRN" which she printed and sent to USAA. She contended that "she cannot be faulted for failing to list the specific statutory subsections in the CRNs, because the CRN form was provided online by the Department and she was required to select the statute that was violated from a drop-down menu. Thus, Plaintiff contends that she did not have the option to identify the specific subsections that USAA violated. Id.
Furthermore, given the complete lack of any information in the CRN regarding the specific ways in which Plaintiff believed that USAA engaged in unfair settlement practices, the Court finds that the CRNs did not provide USAA with sufficient notice of her unfair settlement practices claim.
Two things come immediately to mind as a result of this decision. First, the OIR may need to provide statutory-compliant options as a part of its online Civil Remedy Notice form.
Second, after this case, at least, it will do Policyholders no good to rely on the OIR's online CRN form rather than on what the Florida Statute requires.
Bad Faith Statute Not Defense to UIM Bad Faith Claim.
In Moss v. GEICO Indemnity Co., 2012 WL 882575 (M.D. Fla. March 15, 2012), Download Moss v. GEICO Indemnity Co. (M.D. Fla. Case No. 5.10cv104, Order of USMJ Filed March 15, 2012) PUBLIC ACCESS, a dissatisfied Policyholder sued an Underinsured Motorist Insurance Company for alleged Bad Faith.
a. To the extent that Plaintiff's Civil Remedy Notice failed to comply with the requirements of Florida Statute § 624.155, Plaintiff failed to fulfill a condition precedent to the present action.
b. To the extent that the allegations set forth in Plaintiff's Amended Complaint are broader than the allegations set forth in Plaintiff's Civil Remedy Notice, Plaintiff fails to fulfill a condition precedent to the present action.
c. The provisions of Florida Statute § 624.155 regarding punitive damages apply to the present action. There is no basis for punitive damages to be sought or awarded.
d. To the extent that Plaintiff's allegations do not constitute bad faith as defined by Florida Statute § 624.155 and Florida law, Plaintiff's Amended Complaint fails to state a cause of action.
e. To the extent that Plaintiff alleges damages in her Amended Complaint that are not allowed by Florida Statute § 624.155, Plaintiff's Amended Complaint fails to state a cause of action.
Id. at *1, quoting GEICO's Second Affirmative Defense in this case.
This was a legal argument, not an Affirmative Defense which must be based on allegations of fact under the Federal Rules of Civil Procedure. In particular, "subparagraphs 'c' and 'e'" were stricken as "statements of law; [they are] not affirmative defenses."
It is "devoid of any factual allegations to support its legal conclusions." As such, this alleged Affirmative Defense "fails to give Plaintiff notice of the grounds of the defense and is likely to lead to surprise and undue prejudice."
The Court noted that "each subpart" of this alleged Affirmative Defense begins with the words, "[t]o the extent." "Absent specifics, which GEICO has not supplied, it is impossible to know whether any part of the second affirmative defense applies in this case." [Emphasis added.] To put it another way, it is not enough to know how many angels can dance on the head of a pin; the knowledge required is specific to the facts of this case, whether or not it applies to the facts in other cases pending or yet to be filed.
Finally, GEICO attempted to allege what once was called "a general denial" of the Plaintiff's compliance with a supposed condition precedent. Under Federal Rule of Civil Procedure 9(b), however, and under most Rules of Civil Procedure extant in 2012, a denial of compliance with a condition precedent must be alleged with particularity.
NO FLORIDA CIVIL REMEDY NOTICE, NO FEDERAL CASE.
In Florida, First-Party Bad Faith Cases may be filed under a Statute, Section 624.155. One of the statutory conditions precedent to filing a Section 624.155 lawsuit is a Civil Remedy Notice of Insurer Violation. The complainant sends the original to the Florida Office of Insurance Regulation (formerly the Florida Department of Insurance), and sends a copy to the affected Insurer which has a certain amount of time to "cure" the alleged Bad Faith.
In Bolllinger v. State Farm Mutual Automobile Insurance Co., 2012 WL 112937 (S.D. Fla. January 12, 2012), Download Bollinger v. State Farm Mut. Auto. Ins. Co. (S.D. Fla. Case No. 1.11cv14257, Order Filed January 12, 2012) PUBLIC ACCESS, there was no Civil Remedy Notice but there was a lawsuit. At least a lawsuit was filed.
State Farm was Ms. Betty Bollinger's Uninsured/Underinsured Motorist carrier. She was injured in an automobile accident with a third-party tortfeasor and State Farm gave her permission to settle with the tortfeasor for the tortfeasor's liability policy limits. Ms. Bollinger then demanded the $10,000 UM/UIM Policy Limits on her own State Farm Policy on the ground that her Damages exceeded the liability policy limits of the tortfeasor and her UM/UIM Coverage should compensate her for her uninsured loss. State Farm at first declined. Id. at *1.
Ms. Bollinger then sued State Farm in Florida State Court, apparently for alleged First-Party Bad Faith in addition to her UM/UIM Policy Limits. State Farm reconsidered its position on offering the UM/UIM Policy Limits to her, and decided to offer the limits after Ms. Bollinger filed suit. This time, she did the declination. Her lawsuit proceeded to Trial and a Jury awarded Ms. Bollinger $410,000.00. It was then that State Farm removed the lawsuit to Federal Court. Id.
However, no-one filed or served a Civil Remedy Notice before Ms. Bollinger's lawsuit was filed in the first place. Id. at *2. The Federal Court held that the lack of a statutorily required Civil Remedy Notice was sufficient grounds for dismissal in and of itself.
For that reason alone, the Federal Court held, there was no basis for Federal Jurisdiction. The Federal Court accordingly dismissed Ms. Bollinger's lawsuit on the ground of lack of Federal Jurisdiction, specifically, on the ground that Ms. Bollinger's First-Party Bad Faith Claim was not yet "ripe". Id. at *3.
The glaring absence of a Civil Remedy Notice can be fatal to any action for Florida First-Party Bad Faith. In this recent decision under Florida Statute Section 624.155, the Court held that where there is no Civil Remedy Notice, there is no Federal Case.
A Release is Not Necessarily a Release of ALL Claims.
Lee S. Haramis, Sr., sued Allstate's Insured in Florida State Court. Allstate settled that lawsuit. Mr. Haramis executed "a Complete Release of All Claims and Agreement to Hold Harmless and Indemnify". The only insurance policy limits referenced in that Release, according to a highly respected Federal Judge now on senior status, were policy limits for Bodily Injury and Property Damage Liability Coverages. See Haramis v. Allstate Property & Casualty Insurance Co., 2011 WL 5510730 *1-*2 (M.D. Fla. November 10, 2011), Download Haramis v. Allstate Property and Casualty Insurance Co. (M.D. Fla. Case No. 3.11cv455, Order Filed Nov. 10, 2011) PUBLIC ACCESS.
Mr. Haramis then sued Allstate as personal representative of his daughter's Estate, seeking Uninsured Motorist benefits. Allstate defended itself by raising the Release in the earlier lawsuit.
Parenthetically, the Release in the first lawsuit was drafted to include an express Release "'from any claims whatsoever arising from allegations of bad faith dealing, breach of insurance contract, negligent claims adjustment or otherwise actionable conduct by [Defendant] in its claims defense activities ....'" In addition, although the Court did not dwell on the fact, the earlier Release expressly applied to certain claims and not others. It reached claims "'of any kind or nature (other than claims for first-party insurance, medical, or governmental benefits from other entities not named herein)....'" Id. at *2.
Bifurcation in Bad Faith Case: Liability Phase From Damages Phase.
In Download Ross v. First Liberty Insurance Corp. (M.D. Fla. Case No. 8.11cv.983, Order Filed July 15, 2011) PUBLIC ACCESS, also published as 2011 WL 2784321 *1 (M.D. Fla. July 15, 2011)(authorized password required to access Westlaw), a Federal Judge granted a unique joint motion: "the parties' Joint Stipulation and Motion to Stay Bad Faith and Bifurcate Damages Determination from Bad Faith Liability Determination".
The parties' Joint Stipulation and Motion presented the parties' request to the Court in this Underinsured Motorist Insurance Bad Faith Case "to stay the liability portion of Plaintiff's bad faith claim until the actual damages Plaintiff suffered have been determined." Id.
The Federal Judge granted this stipulated Motion. The Court offered two grounds: (1) Under Florida Statutory First-Party Bad Faith Law, the Insured's underlying damages first have to be determined before any Bad Faith Claim will lie, and (2) simultaneous discovery on Coverage and Bad Faith issues, the parties in this case stipulated, could cause "'improper production of the claim file and other work product discovery before the determination of damages.'" Id. at *2.
Although this ruling came in response to a Stipulated Joint Motion, the concepts it offers are very much worthwhile putting before the Courts for their consideration, i.e., presenting these arguments, certainly from the Defendant Insurance Companies' point of view in all Bad Faith cases. This is particularly true where the Damages to be determined are not simply underlying Damages but the extracontractual or Bad Faith Damages, the determination of which may prejudice the simultaneous determination of Bad Faith Liability.
In cases in which a damages determination of underlying damages as distinct from extracontractual or Bad Faith Damages is a condition precedent to a Bad Faith Claim, and in which discovery is likely to be stayed anyway as a result until underlying damages are determined, Policyholders too have an interest in saving time and expense through a vehicle such as the Stipulated Joint Motion in this case.
Mark S. Shapiro, Esquire is listed on Pacer, the Federal Courts' Online Docket, as a Counsel of Record for the Defendant in the Ross case. Together, the author of this post and Mr. Shapiro will present the Florida Workshop at the American Conference Institute on Bad Faith Litigation in Orlando, Florida which will be held November 30 - December 1, 2011.
Wisconsin: No Bad Faith Claim, No Discovery Without Contract Coverage.
In Download Brethorst v. Allstate Property & Casualty Insurance Co. (Wis. Opinion Filed June 14, 2011) PUBLIC ACCESS, also published as 2011 WI 41, 798 N.W.2d 467 (2011)(authorized password required to access Westlaw), the Supreme Court of Wisconsin addressed a case of first impression. The question in the case, as framed by the Supreme Court, was whether discovery could proceed in a case where the only claim against the Uninsured Motorist Carrier Defendant was an alleged common law Bad Faith Claim, and there was no Breach of Contract Claim. Allstate requested bifurcation of all Contract-Coverage Issues from the Bad Faith Issues even though there was only one Claim alleged, and that one Claim was alleged for Bad Faith. Alternatively, Allstate requested a stay of all discovery until the Plaintiff proved that her claim to coverage was wrongly denied.
The Wisconsin Supreme Court held that the Plaintiff-Policyholder in this First-Party Bad Faith case bore the Burden of Proof that she had a Covered Claim, as a part of proving her Bad Faith Claim. Brethorst v. Allstate Property & Casualty Insurance Co., 798 N.W.2d at ¶ 78, p. 484. This holding is squarely in accord with the nearly unanimous holdings in other cases in other jurisdictions by Courts across the nation. See generally Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" §§ 9:17-9:18, 11:17 (West Third Edition scheduled for pubilcation in July, 2011).
In the end, the Supreme Court affirmed the Trial Court's ruling denying Allstate's motion for bifurcation and denying Allstate's motion for a stay of discovery until breach of contract was proven in this case. The Plaintiff-Policyholder would be required to adduce evidence, which was in the record of this case according to the Supreme Court, that the Plaintiff would be likely to prove a breach of contract, i.e., that the Defendant denied a covered claim. (In all such cases, the Defendant Insurance Company would then be free not only to file a responsive pleading denying any breach of contract, but also to file a "motion," i.e., to "show" that the Plaintiff is not likely to prove denial of a covered claim.) Once the Plaintiff in such a case makes this preliminary showing, the Plaintiff will be entitled to take discovery on a Bad Faith Claim even though there is no accompanying Claim for Breach of Contract, as in this case, the Supreme Court held. Id. at ¶¶ 76 & 77, pp. 483-84.
The Wisconsin Supreme Court's Brethorst v. Allstate decision is commented on, in excellent posts on June 16, 2011 on the Wisconsin State Bar Website and on June 23, 2011 on Contracts Prof Blog.
Smile When You're Silent, Pardner ... Colorado Court Dismisses Extracontractual Claims.
Settlement of underlying Underinsured Motorist Benefits was a key issue in Download Dumpert v. State Farm Fire & Casualty Co. (D. Colo. Case No. 10cv02320, Order Dismissing Second and Third Claims for Relief, Filed June 29, 2011) PUBLIC ACCESS, also published as 2011 WL 2581398 (D. Colo. June 29, 2011)(authorized password required to access Westlaw).
Following a tragic accident which resulted in the death of one Justin Dumpert, there was a prior settlement for $850,000.00, an amount less than the tortfeasor's $1,100,000.00 Liability limits. Then and thereafter Mr. Dumpert's parents sued State Farm which had issued their son a UIM Policy. Counsel representing the Plaintiffs-parents refused to allow Deposition questions asking why the underlying settlement was for an amount less than the tortfeasor's Liability limits.
The Policyholder-Plaintiff alleged Claims for Insurance Bad Faith (under Colorado and Arizona Law) and Statutory Claims for alleged wrongful Denial of Coverage by the UIM Carrier Defendant. Among other things, the UIM Carrier's Counsel argued that Summary Judgment of Dismissal on this record was warranted on the extracontractual claims "because the plaintiffs have failed to show any basis for contending that the denial of the claim in excess of the settlement amount was unreasonable or in bad faith." Dumpert v. State Farm Fire & Casualty Co., 2011 WL 2581398 at *2.
The Federal Senior District Judge agreed. The Court in this case dismissed the Claims for alleged Insurer Bad Faith under Colorado or Arizona Law both, and also dismissed the Statutory Claim for Denial of Coverage under a Colorado Statute.
The Federal Judge did not overlook the Plaintiffs' refusal to answer questions about their underlying settlement for less than the tortfeasor's Liability Limits. The Court ruled that "the plaintiffs will not be permitted to explain their acceptance of that amount on the grounds stated in the scheduling order [which declared the Plaintiffs' representation that their underlying settlement reflected their assessment of the emotional toll of going through Trial and moreover their lawyer in the underlying case did not advise them of the Statute of Limitations] ...." Id.
I must be in a "Colorado State of Mind," you might say. Here are some more news reports involving Colorado: Jim Rutenberg and Jeff Zeleny, "Perry's Rift With Bush Could Hold Peril in a Presidential Race" p. A11, col. 1 (New York Times Nat'l ed., Wed., July 6, 2011)(reporting that governor Rick Perry of Texas "went to Colorado last week" to join other wealthy people at a gathering of Kochs) and Kirk Johnson, "Steamboat Springs Journal / Family Still a Vital Part of a Colorado Town's Fabric" p. A11, col. 2 (New York Times Nat'l ed., Wed., July 6, 2011).
Florida Attorney's Fees, Contingent Judgments, Bad Faith, and Settlement Proposals.
In Download Government Employees Insurance Co. v. King (Fla. 2d DCA Case No. 2D09.4742, en banc Opinion Filed 05.06.11) PUBLIC ACCESS STATED NOT FINAL, also published as 2011 WL 1709825 (Fla. 2d DCA May 6, 2011)(en banc)(authorized password required to access Westlaw), the entire Florida Second District Court of Appeal came to the same conclusion on rehearing. Unfortunately, its opinion was not entirely transparent.
The Court dealt a blow to the practice of Trial Courts entering "contingent judgments" and of Florida Appellate Courts approving them -- although the Second District had previously approved the practice and in this case, did not define exactly what it had in mind when it wrote about "contingent judgments". It is clear from the context of the decision, however, that what the Court had in mind in this case was the practice by which Trial Courts have entered Judgment for Insurance Policy Limits, reserved jurisdiction to determine attorney's fees and costs at a later time, and proceed thereafter to "conduct a hearing on attorneys' fees" even though there was no determination of "bad faith and there was no legal basis at the time of the judgment for an award of fees." Id. at *2. [Emphasis added.] Apparently the "contingency" of the attorney's fees Judgment was that the Plaintiffs would prevail on a claim that would entitle them to attorney's fees. See id.
In this UIM Case, the Court had previously affirmed a Judgment entered, not for actual damages sustained, but for the amount of the UIM Policy Limits, i.e., "based on the $25,000 in insurance coverage." Id. at *1. Since there was no denial of the Insurance Coverage, and since the proposal of settlement was in an amount greater than the judgment obtained and on appeal, the original Second District panel denied the Plaintiffs'-Appellees' motion for appellate attorney's fees. Id. at *1.
In the course of the underlying case, the Plaintiffs had "each made a proposal for settlement in the amount of $100,000." Id. The Plaintiffs argued that the Second District should allow the entry of a "contingent judgment" for appellate attorney's fees if they should later prove entitlement to them.
The damages in a bad faith action involving underinsured motorist coverage are specified in section 627.727(10), Florida Statutes (2009)[unchanged in the official 2010 publication]. If attorneys' fees for this appeal are an element of damages under the language of that statute, an issue we do not decide today, those damages are awardable under section 627.727(10), not under section 768.79 [the Florida settlement proposal or offer of judgment statute, also unchanged in the official 2010 publication]. It is the finder of fact in the subsequent lawsuit that is entitled to determine the amount of those fees. We are aware of no legal authority granted to this court or the trial court to predetermine those fees for the trier of fact in the subsequent lawsuit.
In sum and in substance, the en banc Second District Court of Appeal (1) disapproved the entry of judgments in an amount certain, contingent on the party seeking attorney's fees later proving that it is entitled to attorney's fees and (2) held that only Fla. Stat. § 627.727(10) governs the awardability of attorney's fees if the Plaintiff prevails in a Bad Faith action, not Fla. Stat. § 768.79, the settlement proposal/offer of judgment statute. The whole of the en banc panel agreed with these legal conclusions, withheld its approval of any "contingent judgment" for the appellate fees in this case, granted rehearing to the extent of the above substituted holding, and denied the Plaintiffs'-Appellees' motion for appellate attorney's fees. Id.
... Evaluating Damages in Good Faith.
"They brought two claims: breach of contract and bad faith." Download Rossi v. Progressive Insurance (M.D. Pa. Case No. 3.09CV876, Memorandum Order Filed April 25, 2011) PUBLIC ACCESS, also published as 2011 WL 1565848 (M.D. Pa. April 25, 2011)(authorized password required to access Westlaw). "They" are Mr. and Mrs. Alan and Laura Rossi. They are the Policyholders on a Progressive Policy that provides Underinsured Motorist Coverage in accordance with its terms.
Among the terms is of course the universally followed rule of Underinsured Motorist Coverage that the Underinsured Tortfeasor must in fact be "underinsured" in relation to the Policyholders' Damages. Based on the Damages information submitted to Progressive in this case, the Federal Court concluded that Progressive could reasonably conclude that the likely Damages did not invade UIM Coverage at all, id. at *4, even assuming that "liability and causation issues" were to be determined in the Policyholders' favor. However, the UIM Tortfeasor's Liability Insurer, Allstate, settled with Progressives' Policyholders for $131,567.82 or $31,567.82 above the $100,000.00 limit on Allstate's Liability Policy. "Of this amount, $31,567.82 is described as costs and fees." Id. at *7.
Under the circumstances of this case, the Federal Court in Pennsylvania granted Progressive's Motion for Summary Judgment on the Bad Faith Claim. That Claim was brought under the Pennsylvania Bad Faith Statute, 42 Pa. C.S.A. § 8371 because in Pennsylvania there is no Bad Faith Cause of Action in a case like this UIM case, unless that statute applies.
The Insurance Company in Pennsylvania "'assumes a fiduciary status by virtue of the policy's provisions which give the insurer the right to handle claims and control settlement.'"
"'Bad faith' ... is any frivolous or unfounded refusal to pay proceeds of a policy; it is not necessary that such refusal be fraudulent.'"
To constitute actionable Bad Faith, the Insurance Company's conduct must show "'a dishonest purpose,'" "self-interest or ill will; mere negligence or bad judgment is not bad faith.'"
Bad Faith can be shown when the Insurance Company "'did not have a reasonable basis for denying benefits under the policy and ... the insurer knew of or recklessly disregarded its lack of reasonable basis in denying the claim.'"
Bad Faith can include the Insurance Company's investigation.
Moreover, "conduct that violates the Unfair Insurance Practices Act may rise to the level of bad faith."
The Insurance Company's duties of Good Faith continue "during the pendency of the litigation."
And, finally, "[t]he plaintiff must prove bad faith by clear and convincing evidence."
In this case, the evidence showed the District Judge that "Progressive continued its investigation in an objectively reasonable manner, even if it did not move as quickly as [its Policyholder] would have liked." Id. at *10. The available proof on damages led to an objectively verifiable conclusion that the likely damages would not exceed the UIM Tortfeasor's available Liability Coverage in this case, even if in fact the damages settlement did exceed that limit: "However, considering the lack of evidence that Rossi's injuries would exceed the amount covered by McGroarty's [the UIM Tortfeasor's] policy, the pace and scope of Progressive's investigation does not suggest bad faith." Id. at *11.
Florida Civil Remedy Notice Does Not Require Evidence Pleading, Court Holds.
In the case of Download Altheim v. GEICO General Ins. Co. (M.D. Fla. Order Filed January 18, 2011) PUBLIC ACCESS, also published as 2011 WL 161050 (M.D. Fla. January 18, 2011)(authorized password required to access Westlaw), GEICO argued a Motion for Summary Judgment based in part on an allegedly insufficient CRN or Civil Remedy Notice under Fla. Stat. § 624.155, Florida's Bad Faith Statute. The Federal Judge denied GEICO's Motion for Summary Judgment in that case.
A fair reading of the CRN gives Defendant notice of the specific wrongful conduct at issue -- Defendant's failure to settle Plaintiff's claim due to an unsatisfactory settlement offer. Furthermore, common sense suggests that the action Defendant could have taken to cure the alleged violation would be to increase the amount offered to settle Plaintiff's claim. Plaintiff is not required to delineate in the CRN the specific amount necessary to settle her claim. [Citations omitted.] Additionally, the Court notes that there is no evidence before the Court that the Department of Insurance returned the notice for lack of specificity.
Undisputed Covered U.M. Amounts: Extracontractual Exposure, Punitive Damages Exposure Also.
There are important holdings on Bad Faith Claims filed against an Uninsured Motorist/Uninsured Motorist ("U.M.") Insurance Company in Nevada. Two of them are posted here.
1. Failure to Pay Undisputed Covered Parts of the Insured's Coverage Claim.
A growing number of Courts is holding that failure or refusal to pay undisputed covered amounts under First-Party Insurance Policies can be the basis of a Claim for Bad Faith. The Bad Faith Claims may come at Common Law or under Statutes. See generally Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" § 9:26 "Insurer's Payment of Undisputed Covered Amounts: Introducing the Concept -- Part Payment of Non-Property, First-Party Claims, And of Claims Generally" (West Publishing Company 2010 Supplement). A Federal District Court in Nevada has now held that Bad Faith Claims in such cases can be based on a U.M. Insurer's failure to follow its own Claims Manual.
In Download Storlie v. State Farm Mutual Auto. Insurance Co. (D. Nev. Case No. 2.09cv02205, Order Filed January 13, 2011) PUBLIC ACCESS, also published as 2011 WL 116881 (D. Nev. Order Filed January 13, 2011)(authorized password required to access Westlaw), a Federal Court held in effect that the complete absence of case law in Nevada "indicating that an insurer must advance the undisputed portion of an UM policy," id. at *6, did not prevent a Bad Faith Claim from accruing. First, provisions of the Defendant's "Auto Claim Manual" suggested to the Court that at least in some cases, the Defendant U.M. Carrier "does instruct its employees to advance the undisputed portions of an insured's UM policy benefits prior to the final settlement of an insured's claim." Id.
In this case, a reasonable trier of fact could conclude that Defendant's failure to tender any offer during the ten month span of time between when Defendant initially received notice that Plaintiff might be pursuing an UM cause of action and the time at which Plaintiff filed this lawsuit -- January to October -- demonstrated a failure on Defendant's part to effectuate the sort of prompt, fair, and equitable settlement contemplated in [Nevada's] Unfair Claims Practices Act [Nev. Rev. Stat. § 686A.310(1)(e)], particularly when coupled with Defendant's failure to pay the undisputed portion of Plaintiff's medical bills even after receiving notification that they had been sold to a collections agency.
Storlie v. State Farm Mutual Auto. Insurance Co., 2010 WL 116881 *8 (D. Nev. Order Filed January 13, 2011). (Link here to Chapter 686A of the Nevada Statutes.) Although the Federal District Court's decision does not refer to them, other States' Statutes have similar Unfair Claims Practices provisions.
"Under Nevada law, in order to recover punitive damages a plaintiff must show by clear and convincing evidence that the defendant acted with oppression, fraud, or malice. [Citation omitted.] Oppression is a conscious disregard for the rights of others constituting cruel and unjust hardship. [Citation omitted.] Malice is present in conduct that is intended to injure a person or despicable conduct that is engaged in with a conscious disregard of the rights and safety of others." Storlie v. State Farm Mutual Auto. Insurance Co., 2010 WL 116881 *9 (D. Nev. Order Filed January 13, 2011).
In Storlie, the Plaintiff raised a genuine and material issue of fact in the eyes of the Federal Judge "particularly because over $9,000 of the policy was not in dispute and Plaintiff's medical bills had been submitted to collections." Put on notice that part of Plaintiff's medical bills were being submitted to a collections agency, "Defendant's actions look particularly arbitrary and callous," wrote the District Court. Id. The Plaintiff's Punitive Damages Claim survived the Defendant's Motion for Summary Judgment in that case accordingly. "Thus, summary judgment will be denied as to Plaintiff's request for punitive damages." Id.
Remand Bad Faith Case: Yes, No. And: Abatement No Shield.
The issue in this decision was whether the Federal Courts' $75,000.00 "amount in controversy" jurisdictional requirement was met. If not, the Federal Court would reject the Defendant's removal of the lawsuit and remand the case back to State Court.
The Federal Court held that the Defendant did not meet its burden of proof that it was "more likely than not" that the jurisdictional amount would be met. The Federal Court characterized the Defendant's argument as "mere speculation" that an assessment of Punitive Damages for example could exceed $75,000.00. The Federal Court granted the Plaintiff's Motion to Remand. Raschke, 2010 WL 86580 at *1 - *2.
In contrast, in another recent Bad Faith case a Federal Court refused to remand: Download Barnes v. Allstate Insurance Co. (M.D. Fla. Order Filed Dec. 28, 2010) PUBLIC ACCESS, also published as 2010 WL 5439754 (M.D. Fla., Order Filed December 28, 2010)(authorized password required to access Westlaw). In Barnes, the Plaintiff likewise sued for Uninsured Motorist Coverage. Ms. Barnes requested leave to amend her State Court Complaint to include allegations of Bad Faith, which the State Court apparently granted but which was abated and was not tried in the State Court. The State Court lawsuit instead proceeded on Ms. Barnes' U.M. Coverage Claim. Her original State Court lawsuit was tried, a verdict was returned in her favor, a Judgment was entered against Allstate and was affirmed on appeal by Florida's Second District Court of Appeal.
Allstate removed the case only after the Florida Appellate Court issued its mandate. The issue was whether the removal was timely in this case. "This was timely because the appellate process must be complete before the cause of action for bad faith insurance practice is ripe." Barnes, 2010 WL 5439754 at *3.
Ms. Raschke was also permitted by the Federal Court to again amend her Complaint. She wanted to include allegations of conduct which she contended had accrued while her original Bad Faith claim was abated. "The Court agrees that Plaintiff should be permitted to amend the bad faith claim to contain additional allegations that were not available to Plaintiff when she originally filed the bad faith claim." Id.
Halloween Coverage Dispute, Bad Faith Dismissed or Abated (as Usual)!
Trick or Treat! Coverage must be determined FIRST, Bad Faith Claim must abide the outcome of the Coverage Determination, the Court held reaffirming a solid Florida Rule of Law in 21st Century Insurance Co. of California, Inc. v. Morneau, Download 21st Century Insurance Co. v. Morneau (Fla. 4th DCA Case No. 4D10.2324, Opinion Filed October 27, 2010) (PUBLIC ACCESS. Stated Not Final), also published as 2010 WL 4226440 *1 (Fla. 4th DCA October 27, 2010)(Subscription required to access Westlaw).
U.I.M., Bad Faith Claim, Florida Statute, CRN "Good to Go".
A Federal Court has found a Civil Remedy Notice of Insurer Violation ("CRN") in compliance with Florida Statute Section 624.155 which requires it. The First-Party Bad Faith Claim in that case concerned alleged failure to Settle Uninsured (here, Underinsured) Motorist Coverage. Lisagail O'Leary and Kevin O'Leary v. First Liberty Insurance Corp., Download Lisagail O'Leary and Kevin O'Leary v. First Liberty Insurance Corp. (M.D. Fla. Case No. 8.10cv1625, Order Filed Sept. 14, 2010) PUBLIC ACCESS also published as 2010 WL 3610446 (M.D. Fla. September 14, 2010)(Westlaw subscription required to access Westlaw). The CRN at issue there was reprinted in pertinent part by the Federal Court. O'Leary v. First Liberty Insurance Corp., 2010 WL 3610446 at *1.
(1) identifies the "complainant" as the "insured," (2) lists Lisagail O'Leary as the name of the "insured," (3) identifies Kevin O'Leary as a "claimant," (4) identifies both Lisagail's policy number and the number that the insurer assigned to Lisagail's claim, (5) states that Lisagail sustained injuries in a "collision in which the other party was at fault and under-insured," (6) quotes the relevant policy language that provides coverage to the plaintiffs for bodily injury resulting from a collision with an under-insured motorist, (7) paraphrases the statutory language by saying that the insurer failed to settle the claim in good faith, and (8) otherwise contains all of the statutorily required information.
Remand Denied: Bad Faith Claim Held Separate From Coverage Claim.
In Love v. Property & Casualty Ins. Co. of Hartford, Download Love v. Property & Cas. Ins. Co. of Hartford (M.D. Fla. Case No. 8.10.CV.649, Order Filed July 16, 2010) PUBLICLY ACCESSIBLE OFFICIAL REPORT also published as 2010 WL 2836172 (M.D. Fla. July 16, 2010)(Westlaw subscription required to access Westlaw), a Federal Court denied a Motion to Remand a UM Bad Faith Claim. The Court held that, under Florida law, a Bad Faith Claim is separate from a Claim on an Insurance Policy. Love, 2010 WL 2836172 at *2. In the Court's view, therefore, it is proper to remove a Bad Faith Claim to Federal Court and leave the adjudication of the Coverage Claim, here, the UM Claim, to the State Court in which a Jury had already returned a Verdict in excess of the UM Policy Limits. Id. at *3.

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