Directs Judgment to be Entered in Favor of Insurer
In GEICO v. Harvey, (Fla. 4th DCA Jan. 4, 2017),
Florida's Fourth District Court of Appeal held that the trial
court erred in denying the insurer's motion for directed
verdict on the insured's bad faith claim. In doing so, the
Fourth District reminded courts and litigants that an insurer's
mere negligence is handling a claim is insufficient to support a
finding of bad faith.
In Harvey, the insured was involved in an automobile accident
resulting in the death of the other driver. The insured's
policy with GEICO provided $100,000 in coverage. Following an $8.47
million judgment against the insured in the underlying automobile
negligence suit, the insured brought a bad faith claim against
GEICO. The jury found in favor of the insured, with the trial court
denying GEICO's motion for directed verdict and subsequent
motion for judgment notwithstanding the verdict.
In evaluating whether GEICO acted in bad faith, the Fourth
District noted that the "totality of the circumstances"
must be considered in light of the factors set forth in the seminal
bad faith case of Boston Old Colony Insurance Co. v.
Gutierrez, 386 So.2d 783, 785 (Fla. 1980). The Fourth District
in turn examined each of these factors in the context of the facts
presented at trial and concluded that "there was no factual
basis to sustain the bad faith judgment." These facts included
promptly notifying the insured of the possibility of an excess
judgment and the unconditional tender of policy limits 9 days after
the accident. Based upon these facts and others, the Fourth
District remanded the case with instructions to enter judgment in
favor of the insurer.
Notably, while the Fourth District found insufficient evidence
to sustain a bad faith claim, the court nevertheless recognized
that there were in fact deficiencies in GEICO's claims
handling. Specifically, the Fourth District noted that GEICO's
adjuster failed to relay information to the Estate regarding when
the insured and his counsel would be available to provide a
statement previously requested by the Estate, with testimony
presented that the Estate would not have filed suit had the
statement been provided. There was also evidence that the adjuster
had received some deficient performance reviews and at times had
difficulty managing her workload.
The Fourth District pointed out however, that:
"[N]egligence alone is insufficient to sustain a bad faith
award. An insurer's imperfect handling of a claim does not, by
itself, equate to bad faith; the essence of a bad faith claim is
that the insurer put its own interests before that of the
insured." The mere fact that "GEICO could have acted more
efficiently in handling the insured's claim" and could
have perhaps "improved its claim process" the facts did
not demonstrate bad faith.
The Fourth District also noted in this case that the insured was
aware that the Estate had requested a statement and did nothing to
facilitate that request despite having the assistance of personal
counsel. Pointing to that conduct, the court stated that in
addition to bad faith conduct on the part of the insurer, the
insurer's bad faith must have also caused the excess judgment;
"where the insured's own actions or inactions result, at
least in part, in an excess judgment, the insurer cannot be liable
for bad faith."
It is, to say the least, rare for a Florida state court to
conclude, as a matter of law, that an insurer did not act in bad
faith. Harvey provides support, however, that judgment as a matter
of law is appropriate in some circumstances, even if claims
handling deficiencies exist. As further demonstrated by Harvey, an
insurer has an even greater chance of success where the
insured's own conduct hinders the settlement process.
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