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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions