39 Fla. L. Weekly D1988a
Insurance — Uninsured motorist — Bad faith — Jury’s determination of
damages in first trial, which also established liability of tortfeasor, was
binding on insurance company in bad faith trial — Circuit court did not err by
treating excess verdict from UM trial as conclusive evidence of plaintiff’s
damages in the bad faith trial
District. Case No. 4D12-4606. September 17, 2014. Appeal from the Circuit Court
for the Seventeenth Judicial Circuit, Broward County; Michael L. Gates, Judge;
L.T. Case No. 09-13697(12). Counsel: Paul L. Nettleton of Carlton Fields, P.A.,
Miami, for appellant. Philip M. Burlington of Burlington & Rockenbach, P.A.,
West Palm Beach, and Richard M. Benrubi of Liggio & Benrubi, P.A., West Palm
Beach, for appellee. Louis K. Rosenbloum of Louis K. Rosenbloum, P.A.,
Pensacola, for Amicus Curiae, Florida Justice Association.
brought by an insured against her underinsured motorist carrier and write to
address one issue: whether, in the bad faith trial, the plaintiff was required
to once again prove her damages, instead of relying on the jury’s damage
determination in the first trial, which also established the liability of the
tortfeasor. We hold that the jury’s determination of damages in the first trial
was binding on the insurance company in the bad faith trial.
due to the negligence of the underinsured driver. The driver’s insurance
company, GEICO General Insurance Company (“Geico”), paid Paton the $10,000
policy limit. Paton’s mother maintained uninsured/underinsured coverage with
Geico, with $100,000 of coverage.
Geico. Geico offered $1,000. After Geico’s expert reviewed Paton’s MRI which,
according to her expert, showed that she had two lumbar herniations, Geico
maintained its $1,000 offer. Later, Geico raised its offer to $5,000, but
returned to the $1,000 offer after Paton refused to settle. In an attempt to
resolve the case, Paton, against Kogan’s advice, reduced her demand to $22,500.
Geico did not respond to this offer.
against Geico. In closing argument, plaintiff’s counsel did not suggest a
specific amount for Paton’s intangible losses. The jury awarded $10,000 for past
pain and suffering, and $350,000 for future pain and suffering. The verdict set
Paton’s total damages at $469,247.
policy limit. Geico paid the final judgment.
under section 624.155, Florida Statutes (2010). Before trial, Paton moved in
limine to exclude evidence of damages; she argued that the excess verdict
returned in the UM trial established the damages she could recover under her bad
faith claim. In opposition, Geico filed its own motions in limine seeking to (1)
exclude from evidence in the bad faith trial the verdict returned in the UM
trial and (2) require Paton to prove her damages anew in the bad faith trial.
The circuit court granted Paton’s motions and denied those of Geico.
attorney representing Paton in the underlying litigation met a statutory notice
requirement and 2) whether Geico failed to act in good faith to settle Paton’s
claim. Consistent with the rulings on the motions in limine, Paton presented
evidence of the verdict returned in the UM trial and the trial court removed the
damages issue from the jury’s consideration with an instruction that the court
would award damages in an amount allowable under Florida law if its verdict was
for the plaintiff.
in the amount of the excess verdict from the UM trial ($369,247) plus
the UM trial as conclusive evidence of Paton’s damages in the bad faith trial,
thereby denying the company procedural due process and violating its right to
appeal and access to the courts.
creating the bad faith cause of action, (2) the Supreme Court’s jurisprudence in
first party bad faith actions, and (3) Geico’s failure to challenge the damage
award after the first trial or in this appeal.
created a first-party bad faith cause of action by an insured against the
insured’s uninsured or underinsured motorist carrier, thus extending the duty of
an insurer to act in good faith to those types of actions.” State Farm Mut.
Auto. Ins. Co. v. Laforet, 658 So. 2d 55, 59 (Fla. 1995); see also §
624.155(1)(b)1., Fla. Stat. (2009).
first-party bad faith case include the total amount of the plaintiff’s damages
that were caused by the original third-party tortfeasor, even an amount in
excess of policy limits. See Chs. 90-119, § 55, 92-318, § 80, Laws of
Fla. Subsection 624.155(8) provides that:
The damages recoverable pursuant to this section [624.155] shall
include those damages which are a reasonably foreseeable result of a specified
violation of this section by the authorized insurer and may include an award or
judgment in an amount that exceeds the policy limits.
The damages recoverable from an uninsured motorist carrier in an
action brought under s. 624.155 shall include the total amount of the claimant’s
damages, including the amount in excess of the policy limits, any interest on
unpaid benefits, reasonable attorney’s fees and costs, and any damages caused by
a violation of a law of this state. The total amount of the claimant’s damages
is recoverable whether caused by an insurer or by a third-party
determination “that damages in first-party bad faith actions are to include the
total amount of a claimant’s damages, including any amount in excess of the
claimant’s policy limits without regard to whether the damages were caused by
the insurance company.” Laforet, 658 So. 2d at 60.
between the insured and the insurer establishes two elements that must exist for
the bad faith cause of action to accrue — the liability of the uninsured
tortfeasor and the extent of the plaintiff’s damages in the underlying accident.
In Blanchard v. State Farm Mutual Automobile Insurance Co., 575 So. 2d
1289, 1291 (Fla. 1991), the Supreme Court wrote that:
an insured’s underlying first-party action for insurance benefits
against the insurer necessarily must be resolved favorably to the insured before
the cause of action for bad faith in settlement negotiations can accrue. It
follows that an insured’s claim against an uninsured motorist carrier for
failing to settle the claim in good faith does not accrue before the conclusion
of the underlying litigation for the contractual uninsured motorist insurance
benefits. Absent a determination of the existence of liability on the part of
the uninsured tortfeasor and the extent of the plaintiff’s damages, a
cause of action cannot exist for a bad faith failure to settle.
that the initial action for first-party benefits, which sets the plaintiff’s
damages arising from an accident, determines the extent of the plaintiff’s
damages in a first party bad faith case:
Section 627.727(10) provides that the damages recoverable from an
uninsured motorist insurance carrier in a bad faith action brought under section
624.155 and the 1990 amendment thereto shall include the total amount of a
claimant’s damages, including any amount in excess of the claimant’s policy
limits awarded by a judge or jury in the underlying claim.
658 So. 2d at 56-57 (emphasis added); see also Progressive Select Ins.
Co. v. Shockley, 951 So. 2d 20, 20 (Fla. 4th DCA 2007) (recognizing that
“both the existence of liability and the extent of damages are elements of a
statutory cause of action for bad faith”); State Farm Mut. Auto. Ins. Co. v.
O’Hearn, 975 So. 2d 633, 635 (Fla. 2d DCA 2008) (stating that “[t]here is an
abundance of case law that holds that a first-party bad faith claim does not
accrue until there has been a final determination of both liability and damages
in an underlying coverage claim”). Thus, based on the Florida Supreme Court’s
construction of the applicable statutes, the initial action between the insurer
and the insured fixes the amount of damages in a first-party bad faith action.
Geico urges, is such bad policy that we do not glean even a hint of its
existence in any case the Supreme Court has decided in this area. Under
Blanchard, the recovery of damages in the first-party action for
insurance benefits is necessary for the accrual of the bad faith claim. Geico
participated fully in the first trial with an opportunity to challenge the
plaintiff’s evidence and a powerful motive to suppress the amount of damages.
When it comes to a judge or jury’s factual determination of damages, Florida’s
policy is not to give multiple bites at the same apple absent some legal
infirmity in the first trial. As one federal district judge has observed,
[f]orcing plaintiffs to relitigate their damages in first-party bad
faith actions would have serious ramifications, including: running the
almost-certain risk of inconsistent verdicts; potentially raising comity issues
between state and federal courts; creating a discrepancy (surely unintended and
definitely illogical) between first- and third-party bad faith claims; placing
an inexplicable burden on plaintiffs to prove their cases twice; and causing a
great deal of judicial inefficiency.
3906312, *4 (M.D. Fla. June 9, 2014). To a limited extent, Geico could have
addressed damages in the bad faith trial by arguing that the amount of damages
awarded in the first trial could not reasonably have been foreseen, so there was
an absence of bad faith.
frustrated its appellate rights because it was unable to challenge the full
amount of the jury’s verdict in the first case. Florida Rule of Civil Procedure
1.530(a) provides that a “new trial may be granted to all or any of the parties
and on all or a part of the issues.” The motion for new trial must be served
“not later than 15 days after the return of the verdict in a jury
action.” Fla. R. Civ. P. 1.530(b) (emphasis added). Because Geico never filed a
rule 1.530(a) motion, we are left to guess at what errors might have infected
the first trial. However, we note that the extent of damages awarded — $469,247
— and the amount of the final judgment — $100,000 — are in the same ballpark
for damages arising from the type of injury of which plaintiff complained.
See, e.g., Leinhart v. Jurkovich, 882 So. 2d 456, 459 (Fla. 4th DCA 2004)
(award of $348,000 where plaintiff suffered “herniated disc in the lumbar
portion of the back”); Delgardo v. Allstate Ins. Co., 731 So. 2d 11, 13
(Fla. 4th DCA 1999) ($204,269 awarded for “herniated disc as well as cervical
and lumbar sprains”). Many types of legal errors might have applied equally to
damages above and below the $100,000 policy limit, such that the entire amount
of damages was interrelated for the purpose of being appealable. Because the
damages in the first trial fixed the amount of bad faith damages and an order
denying a motion for new trial could have addressed damages in excess of
$100,000, an appeal after the final judgment in the first trial directed at the
total amount of damages thus would have fallen within the constitutional
parameters of the jurisdiction of this Court as an appeal from a “final
judgment[ ] or order[ ]” of the trial court.1 Art. V, § 4(b)(1), Fla. Const. This approach
conserves judicial resources and best serves the procedure contemplated by
Blanchard. By failing to file a Rule 1.530(a) motion or take an appeal in
the first trial, Geico did not preserve its right to challenge the total amount
of the jury’s damage award from the first trial.
identified by Judge Altenbernd’s concurring opinion in Geico General
Insurance Co. v. Bottini, 93 So. 3d 476 (Fla. 2d DCA 2012). There the jury
verdict found that the plaintiff’s damages were $30,872,266 and the trial court
entered a final judgment for the applicable policy limits of $50,000. Id.
at 477. In light of this disparity, the majority held that “even if Geico
were correct that errors may have affected the jury’s computation of damages,”
any such errors were harmless given the amount of the judgment. Id. In
his special concurrence, Judge Altenbernd expressed concern that a district
court of appeal would not have jurisdiction to consider the propriety of damages
in excess of $1,050,000, an amount that Geico conceded would have been proper
after a finding of liability, because that amount was not included in the
judgment on appeal. Id. at 478.
damage award far exceeds the amount of a final judgment — the “final judgment
or order” language of Article V, section 4(b)(1) should be expansively read to
include an appeal from an order denying a new trial in a first party suit for
uninsured motorist benefits. The final judgment subsumes the earlier order’s
resolution of the jury’s damage determination so that the total amount is an
immediately appealable issue. Such a reading is consistent with the Supreme
Court’s view in Blanchard that a first-party bad faith cause of action
cannot accrue until after a factfinder’s determination of the uninsured
tortfeasor’s liability and the extent of the plaintiff’s damages. 575 So. 2d at
to allow for a challenge to damages in the bad faith case; the harmless error
finding would not preclude later consideration of the propriety of damages in
excess of $50,000. Bottini would allow for this practical option where
the trial judge defers ruling on the propriety of any amount of damages in
excess of the final judgment until after a finding of bad faith in the second
trial; in this instance an appellate challenge to the amount of damages would
occur after the entry of a final judgment in the bad faith case.2 Whether the bad faith cause of action has been
abated or added by amendment, the record and damage issue are all part of the
same case. If there is a jurisdictional bar to reviewing damages in the appeal
of that lawsuit, the practical advantage of this option is its compliance with
the First Rule of Judicial Economy by postponing a ruling on the legal propriety
of a damage award until those damages are triggered by a bad faith
this is the preferable approach by adopting a rule requiring final judgments in
uninsured motorist suits between an insured and the insurer to include specific
findings on the total amount of damages, even though execution would issue for
only the policy limits.
have pursued the appellate option suggested by the appellee’s brief — raising
“any issue regarding the ‘excess’ damages in this appeal from the bad faith
judgment in which the ‘excess’ damages were incorporated” — without filing a
rule 1.530 motion after the verdict in the first trial.
King v. Government Employees Insurance Co., No. 8:10-cv-977-T-30AEP, 2012
WL 4052271 (M.D. Fla. Sept. 13, 2012), but reject its analysis. The case treats
Judge Altenbernd’s concurring opinion in Bottini as binding authority,
while ignoring the majority opinion, and engages in an abbreviated “procedural
due process” analysis without citation to authority or consideration of
Lindsey v. Normet, 405 U.S. 56, 77 (1972). See N. Am. Van Lines, Inc.
v. Ferguson Transp., Inc., 639 So. 2d 32, 34 (Fla. 4th DCA 1994) (observing
that the United States Supreme Court “has stated that as long as a ‘full and
fair trial on the merits is provided, the Due Process Clause of the Fourteenth
Amendment does not require a State to provide appellate review’ ” (quoting
Lindsey, 405 U.S. at 77)).
become problematic where a plaintiff files an entirely separate action for bad
faith. One possibility is to allow the insurance company to raise its preserved
objections to the amount of the verdict in the first-party action for insurance
benefits as an affirmative defense in the bad faith action so that the issues
might still be raised in the appeal of the bad faith verdict.
* * *