Opinion ID: 78397
Heading Depth: 2
Heading Rank: 2

Heading: Auto-Owners' Motive for Settling the Rivermar Claim

Text: The jury heard evidence to support an inference Auto-Owners intended to eliminate its risk of a bad faith claim, with Southeast's money. Auto-Owners shifted its position on the bond claim immediately following the direct threat of Rivermar's bad faith claim. Froman, Auto-Owners' in-house attorney responsible for reviewing all surety bond claims, first learned of the claim in September 2004 when Pinckney, the general counsel of Rivermar's parent company, ASI, called. Froman did not know about Rivermar's claim against the bond or Rivermar's bad faith claim against Auto-Owners until the phone call from Pinckney. Because of this direct communication, Froman became concerned about the bad faith claim by Rivermar. Froman increased Auto-Owners' reserve from $5,000 to $800,000 in October 2004, after Pinckney's contact with Froman, but prior to Auto-Owners' re-investigation of the claim. Auto-Owners initially supported Southeast's defenses against Rivermar's claims on the bond, and their position changed only after Froman learned of the bad faith claim. The jury could have concluded Auto-Owners' change of position and settlement of the claim on the bond was prompted by its self-interested concern about Rivermar's bad faith claim. The secretive nature of the negotiations between Auto-Owners and Rivermar also lends support for the jury's verdict. The jury heard evidence that would support an inference Auto-Owners' and Rivermar had reached a settlement in principle at the March 28, 2005 secret meeting in Louisville. The day after, McLellan was instructed to abandon his review of the mooring analysis and calculations on the dock system. The jury could have concluded Auto-Owners and Rivermar had reached a settlement in principle and Auto-Owners excluded Hayes and Southeast so they would not throw a monkey wrench into the settlement. The jury also heard that Auto-Owners and Rivermar's settlement excluded Rivermar's claims against Southeast, while it released the claims of bad faith against Auto-Owners. The jury could have concluded Auto-Owners would have obtained a release of claims against both it and Southeast if the payments made to Rivermar indeed had been in settlement of Rivermar's claim against the bond, as opposed to settlement of Rivermar's bad faith claim. The jury reasonably could have concluded the failure to obtain a release of claims against Southeast, by payment of money Auto-Owners intended to recoup from Southeast, is evidence the settlement reached was not for the claims against the bond. Whether a surety has settled a claim in good faith or not, of course, depends on the particular facts of the case. See Dadeland Depot, Inc. v. St. Paul Fire & Marine Ins. Co., 483 F.3d 1265, 1276 (11th Cir.2007). It is the province of the factfinders to assess the credibility of witnesses and draw reasonable and logical inferences from the evidence. See Combs v. Plantation Patterns, 106 F.3d 1519, 1538 (11th Cir.1997). As outlined above, the verdict reached by the jury was supported by the evidence presented at trial.