Opinion ID: 794236
Heading Depth: 2
Heading Rank: 2

Heading: Pozzi's Cross-appeal

Text: 89 We now turn to Pozzi's claim on cross-appeal that the magistrate judge erred in granting judgment as a matter of law in favor of Auto-Owners as to the issues of bad faith and punitive damages. 90 The Florida Supreme Court has identified the following factors as relevant to a bad-faith determination: (1) efforts or measures taken by the insurer to resolve the coverage dispute promptly or in such a way as to limit any potential prejudice to the insureds; (2) the substance of the coverage dispute or the weight of legal authority on the coverage issue; (3) the insurer's diligence and thoroughness in investigating the facts specifically pertinent to coverage; and (4) efforts made by the insurer to settle the liability claim in the face of the coverage dispute. State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So.2d 55, 63 (Fla.1995). The parties agree that these are the relevant factors. 91 In granting judgment as a matter of law in favor of Auto-Owners, the magistrate judge concluded that the evidence showed Auto-Owners' conduct was appropriate for an insurer that believed reasonably and in good faith that the claims were not covered: 92 ... The evidence shows that Auto-Owners denied coverage, defended the case under a reservation of rights, challenged coverage through the appropriate legal mechanism, and eventually was found to be wrong on the issue of coverage. Despite Pozzi's characterization of the evidence, it is clear that Auto-Owners did what insurance companies properly do when they have a serious doubt as to coverage: it defended under a reservation of rights, and sought declaratory relief on the question of coverage. There was no evidence of unreasonable conduct, no evidence of any independent tort, and no evidence that it exposed its insureds to excess judgments by its conduct. It did not mislead its insureds, and did not cause them any damages other than the amount of coverage provided by the policy. 93 The magistrate judge then concluded that each of the Laforet factors weighed in favor of Auto-Owners. 94 On appeal, Pozzi challenges the magistrate judge's application of the Laforet factors. After careful review of the record, we conclude that the magistrate judge did not err in applying the Laforet factors. 4 For example, as the magistrate judge's order explained, the coverage issue was and is subject to serious debate; the evidence showed that Auto-Owners' denial of coverage was well-reasoned; there was no evidence that Auto-Owners misrepresented the terms of its Policies; Auto-Owners did not subject its insured to any damages beyond the denial of coverage; and the evidence was insufficient to support the jury's bad faith verdict. We conclude that Auto-Owners was entitled to judgment as a matter of law on the bad faith issue. 5 95 Pozzi also argues that the same factors establishing bad faith warrant a punitive-damages award. 6 For the reasons set forth above and in the magistrate judge's order, we reject this argument and conclude that the magistrate judge properly granted Auto-Owners judgment as a matter of law.