Bad Faith Blog

A commercial vehicle was involved in a motor vehicle accident resulting in paralysis to a passenger. The commercial vehicle was insured under a Garage policy and a Commercial Umbrella policy, with a total amount of potential coverage of $3 million. In addressing the causation element of a bad faith claim under Florida law, the Court addressed the “excess judgment rule” and concluded a consent judgment is not an excess judgment for purposes of a bad faith claim and does not fall within the three exceptions to the general rule that an excess judgment is required.

Summary: Automobile insured brought action against insurer for common law bad faith after $2.8 million judgment was entered against insured in wrongful death action. Trial court entered summary judgment in favor of insurer. The Court of Appeals affirmed summary judgment holding that the insurer did not act in bad faith by failing to tender offer of $10,000 policy limits to personal representative of decedent’s estate.

Summary: Insured motorist and his wife brought action against their insurer seeking underinsured motorist (UIM) benefits. After the trial court entered judgment in favor of the insureds, the insurer appealed. The appeals court affirmed but denied the insureds’ motion for appellate attorney’s fees. The appeals court, sitting en banc, granted the insureds’ motion for re-hearing on the denial of appellate attorney’s fees. The court of appeals held it could not enter a conditional judgment awarding appellate attorney’s fees contingent on the insureds subsequently prevailing on a bad faith claim.

Summary: Applying Florida law, the Federal District Court found the insurer did not act in bad faith or delay tender of the policy limits when it conducted a reasonable investigation into plaintiff’s injuries. Instead, the District Court found it was plaintiff who caused the delay by failing to comply with the insurer’s reasonable requests for medical records.

Summary: Carrier’s diligent attempts to settle after it received a time sensitive policy limit demand demonstrated that it was not acting in bad faith. Plaintiff’s counsel refused to discuss the settlement contained in an overly technical and conditional demand letter while the carrier promptly acted (but failed) to achieve a settlement protecting its insured and did not act solely based on its own best interest.