Court Opinion

ID: 3043472
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:11:31.449672+00
Date Added: 2024-06-11T09:20:08.017878
License: Public Domain

Case: 13-14171        Date Filed: 08/04/2015      Page: 1 of 13

                                                                       [DO NOT PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT
                              ________________________

                                     No. 13-14171
                               ________________________

                          D.C. Docket No. 9:11-cv-80552-KLR

SHERON HARRIS,

                                                                          Plaintiff-Appellant,

                                             versus

GEICO GENERAL INSURANCE COMPANY,
a corporation,

                                                                        Defendant-Appellee.
                               ________________________

                      Appeal from the United States District Court
                          for the Southern District of Florida
                             _______________________
                                   (August 4, 2015)

Before TJOFLAT, WILLIAM PRYOR, and BARKSDALE, ∗ Circuit Judges.

PER CURIAM:

∗
 Honorable Rhesa H. Barksdale, United States Circuit Judge for the Fifth Circuit, sitting by
designation.
             Case: 13-14171     Date Filed: 08/04/2015    Page: 2 of 13

      For this diversity action controlled by Florida law, primarily at issue in this

bad-faith action by Sheron Harris against her insurer, GEICO General Insurance

Company, is whether, during the statutory 60-day safe-harbor period, GEICO

denied in bad faith Harris’ demand for the policy limit for her uninsured-motorist

coverage. Judgment as a matter of law was granted GEICO. AFFIRMED.

                                       I.

      In June 2009, an uninsured motorist (UM) injured Harris in an automobile

accident in Florida involving both vehicles. GEICO insured Harris for UM

accidents, with a policy limit of $100,000. By 13 August 2009 letter, Harris

demanded that limit; GEICO countered on 25 August with an offer substantially

below it.

      Pursuant to Florida law, Harris then provided GEICO with a civil remedies

notice (CRN). The 1 September CRN afforded GEICO a 60-day safe-harbor

period to investigate the legitimacy and extent of Harris’ claim before formally

approving or denying it. Fla. Stat. § 624.155(3)(a) (“As a condition precedent to

bringing an action under this section, the department and the authorized insurer

must have been given 60 days’ written notice of the violation.”).

                                            2
             Case: 13-14171     Date Filed: 08/04/2015   Page: 3 of 13

      During that 60-day period, Harris again demanded the policy limit on 14

September, and provided GEICO an MRI revealing bulging discs and herniations

and notice that she would undergo a percutaneous discectomy (a brief, outpatient

procedure performed in approximately 15 minutes from which the patient is sent

home with a band-aid over the entry site). On 1 October, GEICO presented

another offer below the policy limit; Harris responded by sending GEICO

additional medical records and bills on 6 October, in which she informed GEICO

of $54,082.15 in medical expenses for the percutaneous discectomy (PD)

procedure and related expenses. On 8 October, GEICO raised its offer to an

amount still well below the policy limit, which Harris rejected.

      On 6 November, following the close of the 60-day safe-harbor period, Harris

filed a UM action in Florida state court, claiming GEICO owed her the policy

limit. In February 2010, while the UM action was pending, she underwent spinal-

fusion surgery. As a result, that April, GEICO offered Harris the policy limit,

which she rejected.

      Harris prevailed at the UM trial in November 2010, with the jury finding her

permanently injured and awarding damages in the amount of $336,351, of which

$185,351 constituted economic damages (medical expenses and lost wages).

                                          3
              Case: 13-14171    Date Filed: 08/04/2015    Page: 4 of 13

Pursuant to Florida law, GEICO successfully moved to have the award reduced to

the policy limit of $100,000.

      Florida law allows insureds to sue insurers whose denial of meritorious

claims is in bad faith. Fla. Stat. § 624.155(1)(b). Harris brought this bad-faith

action against GEICO, with trial being held in February 2013. During trial,

pursuant to Federal Rule of Civil Procedure 50, GEICO moved for judgment as a

matter of law (JML), but the court reserved ruling on the motion, pending the

jury’s verdict on liability, with the measure of damages to be determined

subsequently. The jury found GEICO acted in bad faith by failing to settle Harris’

claim. Because the court granted GEICO’s post-verdict, renewed motion for JML,

the measure of damages was not reached. Harris v. Geico Gen. Ins. Co., 961 F.

Supp. 2d 1223, 1233-34 (S.D. Fla. 2013).

      In granting JML, the court relied on Harris’ UM-trial counsel’s testimony

that, during the safe-harbor period, Harris provided no information from a medical

expert to GEICO stating Harris would suffer permanent injury. Id. at 1230-32.

The court disregarded the UM-trial counsel’s testimony that she anticipated

correctly that Harris would sustain permanent injury, with the court’s stating

permanency must be established within a reasonable degree of medical probability

by expert medical testimony. Id. at 1232. (Whether such permanency must be

                                          4
              Case: 13-14171     Date Filed: 08/04/2015    Page: 5 of 13

established during the 60-day period need not be decided, as Harris has failed to

cite any evidence that expert medical testimony supports her claim of

permanency.) The court also concluded the damages the jury awarded in the UM

trial were not, as a matter of law, the amount required to measure the damages in

the bad-faith trial. Id. at 1232-34.

                                        II.

      Harris challenges the JML that, during the safe-harbor period, she failed to

prove her injuries were permanent within a reasonable degree of medical

probability. In the alternative, she claims the economic damages provided GEICO

during that period demonstrate GEICO’s bad faith in not tendering the policy limit.

(And, she claims there need not be a trial on damages, asserting that the jury award

in the UM trial is the amount used to measure damages in the bad-faith trial. We

need not reach that issue.)

      A JML is reviewed de novo. E.g., Optimum Techs., Inc. v. Henkel

Consumer Adhesives, Inc., 496 F.3d 1231, 1251 (11th Cir. 2007). All evidence

and inferences drawn from the evidence must be examined in the light most

favorable to the nonmovant. Id. The court must then determine whether, in this

light, there was any legally sufficient basis for a reasonable jury to find in favor of

                                              5
              Case: 13-14171     Date Filed: 08/04/2015      Page: 6 of 13

the nonmovant. E.g., Advanced Bodycare Solutions, LLC v. Thione Int’l, Inc., 615

F.3d 1352, 1360 (11th Cir. 2010).

      In Florida, “[a]ny person may bring a civil action against an insurer when

such person is damaged: . . . by the insurer[’s] . . . [n]ot attempting in good faith to

settle claims when, under all the circumstances, it could and should have done so,

had it acted fairly and honestly toward its insured and with due regard for her or

his interests”. Fla. Stat. § 624.155(1)(b)1. On the other hand, no bad-faith action

shall lie if, within 60 days after a claimant files a CRN, “the damages are paid or

the circumstances giving rise to the violation are corrected”. Id. § 624.155(3)(d).

For bad-faith claims,

             [t]he insurer’s appropriate response is based upon the

             insurer’s good-faith evaluation of what is owed on the

             insurance contract. What is owed on the contract is in

             turn governed by whether all conditions precedent for

             payment contained within the policy have been met. An

             insurer, however, must evaluate a claim based upon proof

             of loss required by the policy and its expertise in advance

             of a determination by a court or arbitration.

                                           6
              Case: 13-14171     Date Filed: 08/04/2015   Page: 7 of 13

Vest v. Travelers Ins. Co., 753 So. 2d 1270, 1275-76 (Fla. 2000).

                                          A.

      In granting JML to GEICO, the district court framed the bad-faith claim as

arising from GEICO’s refusal, during the 60-day safe-harbor period, to tender the

policy limit to cover Harris’ non-economic damages (pain and suffering). See 961

F. Supp. 2d at 1230. Such damages are only available under the terms of the

policy if the plaintiff suffers a “permanent injury”, which must be established

“within a reasonable degree of medical probability”. Accord § 627.737(2)(b). The

Florida Supreme Court has not read the “within a reasonable degree of medical

probability” clause to “limit the evidence to objective findings to establish the

existence or permanency of a physical injury”. City of Tampa v. Long, 638 So. 2d

35, 37 (Fla. 1994). A “subjective complaint of the patient may be the principal

evidence available to prove its existence”. Id. A “mere recitation of the plaintiff’s

subjective complaints of pain”, however, “is insufficient to prove a permanent

injury-the plaintiff must also present expert medical testimony to establish the

existence and permanency of the alleged injury”. Id. at 38 (emphasis added).

      Admitting she did not provide a medical note with a permanency rating

during the safe-harbor period, Harris relies instead on her non-medical insurance

expert’s testimony, during the bad-faith trial, that an insurance adjuster should

                                          7
              Case: 13-14171      Date Filed: 08/04/2015   Page: 8 of 13

have been able to deduce permanency from the kind of medical treatment Harris

received and her condition. Regarding the safe-harbor period, Harris’ counsel for

the UM trial testified during the bad-faith trial:

             Q: In fact, however, you didn’t give GEICO any

             evidence of permanent injury in this case, did you, in the

             period of time that the Civil Remedy Notice was in

             existence?

             A: At that time, permanent injury is really dictated by

             medical doctors. We anticipated—

             Q: You didn’t give any information from a medical

             doctor that said she would have a permanent injury, did

             you?

             A: That’s correct.

      As noted, proving permanency “within a reasonable degree of medical

probability” requires expert medical testimony. E.g., id. Harris fails to identify

when a medical expert may have provided an opinion on the permanency of her

injuries. As the above testimony during the bad-faith trial demonstrates, she did

not provide expert medical evidence of permanency during the safe-harbor period.

                                            8
              Case: 13-14171      Date Filed: 08/04/2015    Page: 9 of 13

Likewise, she did not do so during the bad-faith trial; there, the only expert she

presented was the earlier-referenced insurance claims-adjuster supervisor.

       Instead, Harris claims expert medical testimony regarding permanency may

be presented during the UM trial. She failed, however, to make this contention in

opposition to GEICO’s JML motion; therefore, her claim is waived. See Ramirez

v. Sec’y, U.S. Dep’t of Transp., 686 F.3d 1239, 1249-50 (11th Cir. 2012). In any

event, she fails to cite any evidence that expert medical testimony as to

permanency was presented at the UM trial. Therefore, no reasonable juror could

find GEICO denied Harris non-economic damages in bad faith. See Long, 638 So.

2d at 37; see also Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So. 2d 1289,

1291 (Fla. 1991) (“If an uninsured motorist is not liable to the insured for damages

arising from an accident, then the insurer has not acted in bad faith in refusing to

settle the claim.”).

                                           B.

       As noted, the district court limited its liability assessment to the bad faith vel

non of the denial of only non-economic damages. In contesting JML, Harris also

claimed her economic damages, presented during the 60-day safe-harbor period,

demonstrated GEICO acted in bad faith by not offering the policy limit.

                                            9
               Case: 13-14171   Date Filed: 08/04/2015    Page: 10 of 13

      Of course, bad-faith claims are not limited to failure to settle claims based

only on the amount of claimed non-economic damages. Florida’s bad-faith statute

does not distinguish economic and non-economic damages in first-party bad-faith

actions such as this. The “damages in first-party bad faith actions are to include

the total amount of a claimant’s damages . . .”. State Farm Mut. Auto. Ins. Co. v.

Laforet, 658 So. 2d 55, 60 (Fla. 1995) (emphasis added); see also Fla. Stat. §

627.727(10).

      The bad-faith statute “is correctly read to authorize a civil remedy for extra

contractual damages if a first-party insurer does not pay the contractual amount

due the insured after all the policy conditions have been fulfilled within sixty days

after a valid” CRN has been filed. Talat Enters., Inc. v. Aetna Cas. & Sur. Co.,

753 So. 2d 1278, 1283 (Fla. 2000). “It follows that there is no need to allege an

award exceeding the policy limits to bring an action for insurer bad faith.” Imhof

v. Nationwide Mut. Ins. Co., 643 So. 2d 617, 618 (Fla. 1994). Determining the

extent of such damages begins from the date of the proven violation. E.g., Vest,

753 So. 2d at 1275. Therefore, whether Harris’ economic damages presented to

GEICO during the safe-harbor period exceeded the policy limit, and whether she

was unwilling to settle for less than the policy limit, is of no consequence.

                                          10
             Case: 13-14171    Date Filed: 08/04/2015   Page: 11 of 13

      Although the court “conflate[d] the standard for establishing insurance

coverage[, for non-economic damages,] under [Florida law] at [the UM] trial with

the standard for determining whether [GEICO] acted in good faith in denying a

claim”, Wiggins v. Allstate Prop. & Cas. Ins. Co., No. 13-CV-23354, 2015 WL

1401967, at *6 (S.D. Fla. 2 Mar. 2015) (emphasis added), GEICO also included in

the policy, as noted, the statutory requirement for establishing permanency within a

reasonable degree of medical probability, which therefore requires expert medical

testimony to award non-economic damages. But this provision, as discussed

supra, extends only to non-economic damages in both the policy and Florida law.

The court correctly ruled GEICO did not deny Harris’ claim in bad faith; but, the

court’s rationale properly extends only to GEICO’s denial of Harris’ claim for non-

economic damages.

      As she did in opposing JML, Harris asserts the $75,305 in medical expenses

she provided GEICO during the safe-harbor period demonstrates her economic

damages reasonably could (in all likelihood would) have exceeded the policy limit.

GEICO did not tender an offer equaling or exceeding $75,305 before the safe-

harbor period ended. Harris relied in part on these expenses as a basis for her bad-

faith claim at trial. And, the jury found GEICO acted in bad faith “under all the

circumstances” by failing to settle the claim and would have settled had it “acted

fairly and honestly toward” Harris and with due regard for her interest.

                                         11
             Case: 13-14171     Date Filed: 08/04/2015   Page: 12 of 13

      No reasonable juror, however, could have found GEICO acted in bad faith

based on the economic damages provided to it during the safe-harbor period.

GEICO’s final settlement offer during the safe-harbor period was $30,000, despite

Harris’ medical bills’ then exceeding $75,000. In the light of the evidence,

discussed infra, that Harris’ medical bills were unreasonably excessive, a

reasonable juror could not find GEICO acted in bad faith in not tendering the

policy limit during the safe-harbor period.

      During the UM trial, Harris requested approximately $199,000 in medical

expenses, but the jury awarded her $150,000. This was reflected in the UM verdict

form admitted as evidence in the bad-faith trial. As Harris’ attorney in the UM

action admitted during the bad-faith trial, the difference between those requested

damages and the jury’s UM award corresponds with the difference between the bill

she submitted to GEICO for the PD procedure during the safe-harbor period

(approximately $54,000 for the total process), discussed supra, and the amount

which GEICO’s expert would have offered to settle the claim for the PD procedure

in this matter (between $2,000 and $6,000). Furthermore, as Harris’ UM-trial

counsel testified during the bad-faith trial, Harris’ health insurer denied coverage

for the PD procedure because it was outside of mainstream coverage.

                                          12
             Case: 13-14171     Date Filed: 08/04/2015    Page: 13 of 13

      Consequently, based on Harris’ reasonable medical expenses during the

safe-harbor period and considering GEICO’s final settlement offer during that

period of $30,000, no reasonable juror could find that GEICO acted in bad faith in

failing to tender the policy limit. See generally Aboy v. State Farm Mut. Auto. Ins.

Co., 394 F. App’x 655, 657 (11th Cir. 2010) (“If a genuine issue of material fact

exists about whether the evidence showed [the insured’s economic] damages to

exceed the policy limits, then it would be illogical to simultaneously suggest ‘that a

judgment in excess of the policy limits is likely’ in the eyes of the insurer.”)

                                          III.

      For the foregoing reasons, the judgment is AFFIRMED.

                                          13