Opinion ID: 1694656
Heading Depth: 1
Heading Rank: 8

Heading: settlement deadlines and bad faith

Text: Taylor's demand letter required Infinity to tender payment on the bodily injury claims within his designated time limits; [o]therwise there [wa]s no deal. I understand that it is common practice for a party contemplating litigation to submit a settlement offer that remains outstanding for only a finite period and that a person injured by a policyholder may set any deadlines he desires  even an arbitrary or unreasonable one. An insurer does not act in bad faith, however, when it fails to meet an arbitrary deadline. See DeLaune v. Liberty Mut. Ins. Co., 314 So.2d 601, 603 (Fla. 4th DCA 1975) (affirming a verdict for the insurer on a bad faith claim where the insurer missed by one business day the claimant's totally unreasonable ten-day offer acceptance deadline, which was the sole basis for the bad faith claim); see also Southern Gen. Ins. Co. v. Holt, 262 Ga. 267, 416 S.E.2d 274, 276 (1992) (An insurance company does not act in bad faith solely because it fails to accept a settlement offer within the deadline set by the injured person's attorney.). For example, in Clauss v. Fortune Insurance Co., 523 So.2d 1177 (Fla. 5th DCA 1988), the insurer expressed its intent to accept the injured party's settlement offer upon its verification of the claim. The day after the injured party's thirty-day deadline passed, the insurer sent a letter to his attorney tendering the policy limits and including a release form. The injured party, however, refused to settle. The district court concluded that [a] one-month period to verify the claim was not excessive, and certainly does not rise to the level of bad faith, particularly when Fortune tendered the policy limits one day after the notice of the bad-faith failure to settle was sent by Clauss. Id. at 1178. Thus, the insurer did not violate either its common law duty of good faith or its statutory duty of good faith. Id. at 1179. Berges's claims of evidence of bad faith are all in reality claims that Infinity did not meet Taylor's deadlines. I have already explained why Infinity could not deliver payment within the deadlines. Berges therefore claims that the bad faith lies in Infinity's failure to obtain for Taylor the requisite legal authority for completing the settlement within his deadlines. Let's look at the facts. Within eighteen days after learning of the accident, Infinity had investigated the claim and accepted Taylor's May 2 offer to settle, conditioning its acceptance on the legal proceedings Taylor understood were necessary for settlement. Within a week, although it had no duty to do so, Infinity hired an attorney (Korth) on Taylor's behalf at its own expense to undertake the necessary legal proceedings. It sent him a letter containing the relevant details. Korth commenced work on the case, and on May 23 sent Taylor a letter explaining the process to him. Neither Infinity nor Korth had any reason to believe that Taylor did not soon thereafter receive the letter. In fact, when Taylor revoked his offer, Infinity and Korth contacted Taylor's attorney, sending him copies of the pleadings Korth had drafted to demonstrate that the matter was being worked on and that tender of payment would be forthcoming. The majority concludes that the dissent ignores the evidence that suggests that the failure to consummate the settlement was due to Infinity's own actions in ... not working diligently to obtain the court approvals. Majority op. at 678 n. 9. To the contrary, there is no evidence that Infinity was not pursuing the legal process necessary to conclude the settlement. Berges claims that Infinity should have worked faster to meet the deadlines or called Taylor to ask for an extension for tendering payment, and that these factors evidence bad faith. [16] Testimony at trial, however, showed that in the May 11 conversation in which Infinity accepted Taylor's offer, the deadlines were not even mentioned. Subsequently, Taylor continued to believe the deadlines were in force. Infinity's claims agent believed they were no longer in effect, but Infinity would try to meet them. Based on this testimony, the majority concludes that the issue of the deadlines' continued effect requires a jury determination. Majority op. at 678 n. 9. This conclusion misses the point. Whether the deadlines were still in effect is irrelevant because the fact that Infinity missed these deadlines cannot establish bad faith. Here, the undisputed evidence shows that Infinity accepted the offer to settle for the policy limits within Taylor's arbitrary deadline; it just could not forward actual payment until Taylor had the legal authority to execute releases on behalf of the estate and guardianship. Infinity cannot be held to have acted in bad faith for failing to accomplish the many tasks necessary to complete the settlement  investigate the claim, negotiate with Taylor, obtain legal documents for the estate, obtain legal documents for the guardianship, request and obtain court approval of the settlement  all within Taylor's arbitrary twenty-five- and thirty-day deadlines. Even if evidence had been presented that Infinity could have accomplished all these tasks in such a short time, that alone does not prove that Infinity's failure to do so was even negligent, much less bad faith  that is, that Infinity failed to settle the claim against its insured within the policy limits when, under all the circumstances, it could and should have done so had it acted fairly and honestly towards its insured and with due regard for his interests. This is the standard the jury was instructed to apply, and it was Berges's burden to show that Infinity acted wrongfully, i.e., unfairly or unreasonably. In fact, even Taylor, who retained his own counsel to establish the estate, did not accomplish this task within his own deadlines. There is simply not a scintilla of evidence that Infinity's failure to meet the time demand by actually delivering payment constituted bad faith disregard for the insured's interests. See Powell v. Prudential Prop. & Cas. Ins. Co., 584 So.2d 12, 14 (Fla. 3d DCA 1991) (holding that [b]ad faith may be inferred from a delay in settlement negotiations which is willful and without reasonable cause ) (emphasis added). [17]