Opinion ID: 4561244
Heading Depth: 3
Heading Rank: 1

Heading: Bad Faith Actions Under Florida Law 4

Text: Florida law provides that “an insurer owes a duty of good faith to its insured.” Berges v. Infinity Ins. Co., 896 So. 2d 665, 672 (Fla. 2004); Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla. 1980) (per curiam). The insurer’s duty of good faith “obligates the insurer to advise the insured of settlement opportunities, to advise as to the probable outcome of the litigation, to warn of the possibility of an excess judgment, and to advise the insured of any steps he might take to avoid [the] same.” Gutierrez, 386 So. 2d at 785. The duty also requires the insurer to “investigate the facts, give fair consideration to a settlement offer that is not unreasonable under the facts, and settle, if possible, 4 “In diversity cases, we are required to apply the substantive law of the forum state; here, Florida.” Mesa, 799 F.3d at 1358. 10 Case: 19-13941 Date Filed: 08/28/2020 Page: 11 of 15 where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so.” Id. When an insurer breaches its duty a cause of action for bad faith may be brought against the insurer. Id; Fla. Stat. § 624.155. Moreover, “[b]ad faith actions may be brought by a claimant directly against a tortfeasor’s insurer when third-party insurance claims are involved.” Mesa, 799 F.3d at 1358, citing Thompson v. Commercial Union Ins. Co., 250 So. 2d 259, 264 (Fla. 1971) (holding that “a judgment creditor may maintain suit directly against tortfeasor’s liability insurer for recovery of the judgment in excess of the policy limits, based upon the alleged . . . bad faith of the insurer in the conduct or handling of the suit”). To fulfill its duty in handling claims against its insured, an insurer must exercise “the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business.” Id. at 1359, quoting Gutierrez, 386 So. 2d at 785. “The insurer must therefore make ‘decisions in good faith and with due regard for the interests of [its] insured.’” Id., quoting Gutierrez, 386 So. 2d at 785. An insurer breaches its duty when it acts in bad faith—mere negligence is not enough. Campbell v. Gov’t Emps. Ins. Co., 306 So. 2d 525, 530 (Fla. 1974) (“[W]e align[ ] Florida with those states whose standards for determining liability in an excess judgment case is bad faith rather than negligence.”). Under Florida law, “the question of whether an insurer has acted in 11 Case: 19-13941 Date Filed: 08/28/2020 Page: 12 of 15 bad faith in handling claims against the insured is determined under the totality of the circumstances standard” and “is ordinarily for the jury to decide.” Mesa, 799 F.3d at 1359, quoting Berges, 896 So. 2d at 680 (internal quotation marks omitted). 2. No Reasonable Jury Could Find Defendant Acted in Bad Faith In the present case, we conclude that a jury could not reasonably conclude that Defendant had acted in bad faith based on the evidence Plaintiff has proffered. See Mesa, 799 F.3d at 1358 (affirming summary judgment for defendant insurance company on a bad faith claim where insurance company was diligent in its efforts to settle multiple claims against its insured and there existed no causal connection between the insurer’s actions and the entry of an excess judgment against its insured); Gutierrez, 386 So. 2d at 785–86 (holding insurer’s motion for directed verdict should have been granted where insurer offered policy limits before trial and there was “no sufficient evidence from which any reasonable jury could have concluded that there was bad faith on the part of the insurer”). Upon notification of the accident, Defendant immediately opened a claim file and began an investigation. Through its own research, Defendant quickly determined that there were multiple victims not disclosed by the insured and that there were five total claimants. Defendant diligently investigated the claims arising from the occupants of the second vehicle, obtaining updates regarding the extent of their injury and their medical care. Defendant worked to do the same for Plaintiff and was able to 12 Case: 19-13941 Date Filed: 08/28/2020 Page: 13 of 15 obtain limited information from Plaintiff’s Personal Injury Protection carrier. Defendant identified Plaintiff’s counsel, initiated contact, and repeatedly attempted to engage Plaintiff’s counsel, all to no avail. Consequently, Defendant remained in the dark regarding Plaintiff’s counsel’s assessment of the personal injury claims of Plaintiff and Eduardo Gonzalez Jr. Given counsel’s radio silence, Defendant also lacked any knowledge whether Plaintiff would be willing to settle the wrongful death claim for $250,000.5 Simultaneously, Defendant conducted an internal coverage investigation to determine whether the policy covered the insured’s son, who was not listed on the policy and who was driving the vehicle in Florida, a location far removed from Delaware, the state in which the policy was issued to the Browns. Plaintiff concedes that this investigation was warranted and Plaintiff offers no evidence supporting the notion that Defendant delayed its investigation in bad faith.6 5 The district court perceived improper motives in Plaintiff’s counsel’s lack of communication, stating that “the Court cannot ignore Plaintiff’s counsel’s hand in manufacturing the delay Plaintiff now complains about” and asserting that “[t]he Court will not tolerate the use of bad faith claims as a sword for claimants in insurance litigation.” We agree with Plaintiff that the perceived desire of Plaintiff’s counsel to manufacture delay is not, on its own, a ground for deciding whether the insurer acted in bad faith. See Berges, 896 So. 2d at 677 (“[T]he focus in a bad faith case is not on the actions of the claimant but rather on those of the insurer in fulfilling its obligations to the insured.”). Nonetheless, regardless of whether Plaintiff’s counsel acted in good or bad faith, the fact remains that, given counsel’s unresponsiveness, Defendant lacked claims information from Plaintiff as well as any insight into whether Plaintiff would have settled for $250,000. Thus, this case is markedly different from Berges, where plaintiff communicated a settlement offer and imposed a deadline that went unheeded by the insurer. Id. 6 Plaintiff contends that Defendant determined early on that the policy provided coverage. The record reflects that an “initial” coverage investigation concluded that “Insured’s son was a permissive user of the vehicle.” The initial investigation did not determine whether there had 13 Case: 19-13941 Date Filed: 08/28/2020 Page: 14 of 15 Upon completion of the coverage investigation, and within 32 days of being notified of the accident, Defendant offered the full policy limits in furtherance of a global settlement of the multiple claims. See Farinas v. Fla. Farm Bureau Gen. Ins. Co., 850 So. 2d 555, 560–61 (Fla. 4th Dist. Ct. App. 2003) (per curiam) (noting that an insurer’s duty of good faith requires that it attempt to resolve as many claims as possible when there exist multiple bodily injury claimants and insufficient coverage under the policy). Despite the fact that Plaintiff never even attempted to communicate with Defendant—much less make a settlement demand—before Defendant made the full policy limits available, Plaintiff contends that Defendant should have immediately tendered the $250,000 policy limit for the wrongful death claim. But “because there were multiple claimants, [Defendant’s] decision to pursue a global settlement was consistent with its duty of good faith under Florida law.” Mesa, 799 F.3d at 1360 (affirming summary judgment of no bad faith for failure to immediately tender policy limits for a catastrophic injury); see Farinas, 850 So. 2d been any misrepresentations made during the application process regarding location and use of the vehicle that could void coverage. Conducting that investigation was not unreasonable given that Jason Brown, the insured’s son, was not listed on the policy and Jason was living in Florida, where the accident occurred, not in Delaware where the policy had been issued. Even if the coverage investigation could have been completed sooner, we see no delay that a jury could reasonably conclude as rising to the level of bad faith, especially given the simultaneous need for Defendant to investigate multiple claims, the lack of communication from Plaintiff, no evidence suggesting a particular need for urgent action, and no indication that Plaintiff would settle the wrongful death claim for $250,000 or object to an allocated settlement conference. 14 Case: 19-13941 Date Filed: 08/28/2020 Page: 15 of 15 at 560; see also Shuster v. S. Broward Hosp. Dist. Physicians’ Prof’l Liab. Ins. Trust, 591 So. 2d 174, 177 (Fla. 1992) (noting that when multiple claimants exist, an insurer has a duty to abstain from “indiscriminately settl[ing] with one or more of the parties for the full policy limits”). Moreover, given the lack of communication from Plaintiff, we see no evidence in the record suggesting that Defendant knew it was exposing its insured to excess liability by failing to immediately tender the full policy limits for the wrongful death claim and by proposing a global settlement conference 32 days after first learning of the accident and before receiving any of the medical records that it repeatedly sought during that period. See Mesa, 799 F.3d at 1360 (noting “it is not unusual for settlement negotiations to last several months”). Viewing the facts in the light most favorable to Plaintiff, and considering the totality of the circumstances, we see no evidence indicating Defendant unreasonably exposed its insured to a judgment in excess of his policy limits. Accordingly, no reasonable jury could find that Defendant acted in bad faith.