United States: Eleventh Circuit Clarifies "Permanency" Requirement Under Florida Bad Faith Statute

Last Updated: December 19 2016
Article by Colton M. Peterson

In Cadle v. GEICO Ins. Co., Case No. 15-11283 (11th Cir. Sept. 30, 2016), the Eleventh Circuit held that GEICO had not acted in bad faith when it failed to settle a claim after the insured did not provide any evidence of permanency during the cure period as is required by Florida law.

With A Friend Like This...

On July 2007, Catherine Cadle was rear-ended by Derek Friend, an underinsured motorist driving down I-95. Cadle had previously purchased insurance providing coverage for such an accident under a stacked uninsured motorist (UM) policy with a $75,000 limit. Although Friend had insurance as well, his policy contained a $25,000 limit.

Cadle sought treatment for the pain she suffered in the weeks following her accident. However, when this treatment failed to alleviate her pain, Cadle's doctors recommended more active pain management. During the following months between August 2007 and June 2008 Cadle received epidural injections and almost a dozen facets—also known as nerve blocks—which required the use of anesthesia.

Throughout this period, GEICO examined Cadle's medical records and discovered that in 1989, Cadle had suffered a neck injury requiring surgery. GEICO offered to settle Cadle's UM claim for $500, but on July 11, 2008 Cadle's attorney responded by demanding the $75,000 UM limit. Her attorney also provided all of Cadle's medical records at this time. After receiving these records, GEICO upped their settlement offer to $1,000, but noted that these records did not indicate any permanency in Cadle's injuries, which they mentioned raised a question as to the breach of the permanency requirement in Florida Statutes § 627.727(7).

Shortly afterwards, Cadle filed her first Civil Remedy Notice (CRN) under Florida Statutes § 624.155. This CRN noted that as of 14 months after her accident, Cadle still required pain management and had discussed the possibility of a surgical intervention with her doctors. During the 60-day cure period following the filing of the CRN, GEICO requested only Cadle's medical records from her 1989 surgery. GEICO did not increase its settlement offer and again noted that there was no final evaluation indicating any permanency for Ms. Cadle.

State Court Uninsured Motorist Suit

In early 2009, Cadle sued GEICO and filed a second CRN noting treatment had been ongoing and surgical intervention was a possibility. Finally, on December 15, 2009, Cadle had surgery during which she had the aging facet in her neck replaced with a larger facet expected to provide more stability to her neck.

After the completed surgery, Cadle's attorney sent GEICO the operative report and all the requested information regarding her treatment—including her medical bills now totaling $123,132.49. GEICO responded by serving Cadle with a proposal for settlement rather than tendering its policy limits.

In March of 2013, Cadle's UM claim was tried in front of a jury in state court. Despite the fact that none of Cadle's doctors had yet assigned her a permanency rating, the jury found she sustained a permanent injury within a reasonable degree of medical probability as a result of the automobile accident, and awarded a verdict of $900,000.

Federal Court Bad-Faith Claim

On October 15, 2013, Cadle filed a bad-faith diversity case in the Middle District of Florida against GEICO for failing to settle her claim when she believed it should have done so. GEICO moved for partial summary judgment seeking a determination that the $900,000 damage award from the state UM case was not binding as a measure of damages in the federal case. In denying GEICO's motion, the court noted that Florida law "does not establish a procedure for determining damages; and the law in this regard is in a state of flux."

The district court then held a three-day trial during which GEICO's attorney raised the issue of whether GEICO had "any indication that Cadle had sustained a permanent injury in the subject accident." Cadle's bad-faith expert answered in the negative and went so far as to state that in Mrs. Cadle's record there were no files from which he could infer a permanent injury.

Based on this testimony, GEICO moved for a directed verdict under the premise that at no time prior to the surgery was there any record indicating a permanent injury to Mrs. Cadle nor any evidence from which a permanent injury could be inferred. Cadle's counsel responded that Mrs. Cadle's medical records provided a reasonable inference that she needed surgery. However, the judge replied:

That's your own expert. I'm sorry, but when you call an expert, you're kind of stuck with what that expert says; and he pretty much pulled the rug out from under your claim.... [The expert] also said there was no evidence of a threshold breach at the time. So, you know, I mean, that's what he said.

Still, the judge reserved ruling on GEICO's motion as a matter of law. Shortly afterwards, the jury determined Cadle had proven by a preponderance of the evidence that GEICO acted in bad faith by failing to settle her UM claim. However, the judge permitted GEICO to file a written motion substantiating its motion for judgment. In it, GEICO argued that Cadle was only entitled to economic damages because there were no medical records indicating permanency, and that these economic damages fell well short of the $75,000 policy limits.

After reviewing the evidence presented at trial, the district judge concluded no evidence supported Cadle's contention that GEICO was aware or should have known she had a permanent injury prior to 2010 when Cadle's attorney informed GEICO of her 2009 surgery. The judge, in addressing GEICO's reliance on Cadle's medical documents, stated:

Reliance on the documents provided by and representations made by [Cadle's] lawyer cannot amount to bad faith, and [Cadle] has cited no authority to the contrary. Rather, the insurer is entitled to rely on the documents provided by [Cadle's] counsel, and the representations made by him concerning his client's claim.

The judge also noted that "there is no evidence that such additional investigations would have produced a different result." Accordingly, the judge granted GEICO's renewed motion for judgment as a matter of law.

Appeal Issue One: Whether Underlying UM Damage Determination is Binding

On appeal to the Eleventh Circuit Court of Appeals, Cadle argued there was both sufficient evidence presented at trial for the jury to find permanency of her injury and that her burden of proof under a totality-of-the-circumstances analysis does not require her to prove a permanent injury at the time of her settlement demand.

The Eleventh Circuit first sought to clear up Florida law on the issue of whether the state court's determination of UM damages was binding on a subsequent bad-faith suit. In establishing the correct framework, the Court concluded "that [because] the insured is entitled to a determination of the full extent of damages in the UM action, it follows that such a determination is [a] binding [element] in the subsequent bad faith action against the same insurer."

The Court further explained its decision by arguing that if the verdict were not binding, it would lead to the insured having a second chance to relitigate the damages, inconsistent verdicts, and comity issues between state and federal courts. Further, it noted the correct damages in a first-party bad-faith action should contain the total amount of a claimant's damages including any amount in excess of the claimant's policy limits—damages that in essence constitute a penalty.

Appeal Issue Two: Procedural Requirements of Statutory Bad Faith

After disposing of this problematic issue, the Court dove into the heart of its analysis by focusing on the procedural requirements for a bad-faith claim against an insurer. It noted that although typically the question of bad faith is one for the jury, in certain instances, Florida courts have "concluded as a matter of law that an insurance company could not be liable for bad faith." Based on this finding, the Eleventh Circuit held, "[w]here a judge concludes as a matter of law a plaintiff has not established a bad-faith case against an insurer, he [or she] must remove the case from the jury for decision."

Turning to the insurer's obligations, the Court emphasized the importance of the civil remedy notice and sixty-day cure period. It declared that the insurer's failure to respond to a CRN within this period automatically raises a presumption of bad faith sufficient to shift the burden to the insurer to show why it did not respond. However, that is not to say the denial of payment means the insurer is guilty as a matter of law. Rather, so long as the insurer has a good faith belief to deny claims under a policy, there is no cause of action for bad faith even if it is later determined that the insurer's denial was mistaken.

Finally, the court addressed the last piece of the bad faith framework: the permanent injury requirement for noneconomic damages. It focused on the Florida Supreme Court's definition of permanent injury as a bodily injury arising out of the use of a motor vehicle and which "consists in whole or in part of . . . [p]ermanent injury within a reasonable degree of medical probability." Walk v. Grainger, 64 So. 3d 1201, 1207 (Fla. 2011). In fact, before seeking noneconomic damages, an insured must first establish both the existence and permanence of an injury. Fla. Stat. § 627.727(2)(a)–(d).

The Clock Strikes Midnight on Cadle's Bad Faith Claim

On appeal, Cadle argued there was sufficient evidence in the record to support the jury verdict that GEICO acted in bad faith when it failed to pay her claim and that as a result, the district judge erred in overruling the jury's determination. However, based on the procedural requirements of a bad faith claim under Florida Statutes as outlined above, Cadle was required to prove the existence and permanence of her injury during GEICO's sixty-day cure period. In holding Cadle failed to do so, the Eleventh Circuit established that Cadle's own medical expert and UM attorney could not point to any medical evidence presented to GEICO during this period which demonstrated the permanency of Cadle's injury. Therefore, because Cadle failed to satisfy this requirement, noneconomic damages were not available. Fla. Stat. § 627.727(2)(b).

Absent any evidence of permanency of Cadle's injury, the Eleventh Circuit held there was no basis for GEICO to value Cadle's claim at or above the $75,000 policy limit. Accordingly, it held the district court judge correctly determined no reasonable jury could find GEICO acted in bad faith in its failure to settle Cadle's claim. Because there was no evidence of permanency provided to GEICO during the cure period as required under Florida law, the Eleventh Circuit affirmed the district judge's granting of GEICO's Rule 50(b) motion for judgment as a matter of law.

The High Stakes of Bad Faith Claims

The Eleventh Circuit Court of Appeals decision in Cadle clarifies the framework bad faith claims operate within under Florida law and establishes that the determination of damages in a UM claim is binding as an element in a subsequent bad-faith action. However, under Florida law, the existence and permanency of an injury must be proven and provided to an insurer during the cure period in order to recover noneconomic damages in a bad faith claim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.