Camacho v. Nationwide Mut. Ins. Co.

• Decision Date: 25 May 2016
• Docket Number: CIVIL ACTION NO. 1:11-CV-03111-AT
• Citation: 188 F.Supp.3d 1331
• Parties: Jesus Camacho, surviving spouse of Stacey Camacho, and LaJean Nichols, as Administratrix of the Estate of Stacey Camacho, Plaintiffs, v. Nationwide Mutual Insurance Company, Defendant.
• Court: U.S. District Court — Northern District of Georgia

188 F.Supp.3d 1331

Jesus Camacho, surviving spouse of Stacey Camacho, and LaJean Nichols, as Administratrix of the Estate of Stacey Camacho, Plaintiffs,

v.Nationwide Mutual Insurance Company, Defendant.

CIVIL ACTION NO. 1:11-CV-03111-AT

United States District Court, N.D. Georgia, Atlanta Division.

Signed May 25, 2016

Brandon Cathey, Darrell Wayne Hinson, Swope, Rodante, P.A., James N. Sadd, Richard English Dolder, Jr., Slappey & Sadd, for Plaintiffs.

R. Tyler Bryant, Robert Malcolm Darroch, Stephanie F. Glickauf, Goodman McGuffey Lindsey & Johnson, LLP, for Defendant.

ORDER

AMY TOTENBERG, UNITED STATES DISTRICT JUDGE

This case arises out of a 2005 automobile accident that occurred when Nationwide's insured, Seung Park, ran a red light and struck a car driven by Stacey Camacho, causing her death. After the accident, Nationwide had the opportunity to settle the wrongful death and estate claims of Stacey's surviving family members for Park's $100,000 policy limits, in exchange for a limited liability release that would have released Park from all personal liability from any and all claims arising out of the accident except to the extent other insurance coverage was available from which the Camacho family could seek additional funds. Nationwide rejected the settlement offer, albeit in an untimely response, and instead insisted on a full general release with an indemnification provision that would have required Jesus Camacho and LaJean Nichols to repay Nationwide in the event other claims were made or payments sought related to medical liens. When no settlement was reached, Jesus Camacho and LaJean Nichols filed a wrongful death suit against Park in state court. On October 19, 2009, the state court jury awarded them $5.83 million.

Following the jury's verdict in the state court wrongful death suit, Park assigned his right to bring a claim for negligent and bad faith failure to settle against Nationwide to Plaintiffs Jesus Camacho and LaJean Nichols. Plaintiffs filed suit against Nationwide in this court on September 14, 2011, alleging that Nationwide acted negligently and in bad faith in failing to accept their demand for settlement of all claims against its insured within the policy limits and exposing Park to a $5.83 million excess jury verdict. This case was tried before a jury from August 31, 2015 to September 8, 2015. On September 8, 2015, the jury returned a verdict in favor of Plaintiffs finding that Nationwide "acted negligently or in bad faith in failing to settle the claims made by the Plaintiffs against Nationwide's insured, Seung Park." (Doc. 168.) The Parties had agreed that the jury would determine liability only and the Court would determine the amount of the verdict as a matter of law, including attorney's fees.

Plaintiffs' Motion for Entry of Judgment, Notice of Rejected Offer of Judgment Under O.C.G.A. § 9–11–68, and Request for Attorney's Fees [Doc. 178] and Defendant Nationwide's Motion for Judgment Notwithstanding the Verdict [Doc. 182] are now pending before the Court.

I. NATIONWIDE'S MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT [DOC. 182]

A. STANDARD OF REVIEW

Under Fed. R. Civ. P. 50, "[a] party's motion for judgment as a matter of law can be granted at the close of evidence or, if timely renewed, after the jury has returned its verdict, as long as ‘there is no legally sufficient evidentiary basis for a reasonable jury to find’ " for the non-moving party. Chaney v. City of Orlando, Fla. , 483 F.3d 1221, 1227 (11th Cir.2007) ; Lipphardt v. Durango Steakhouse of Brandon, Inc. , 267 F.3d 1183, 1186 (11th Cir.2001). "Regardless of timing, however, in deciding on a Rule 50 motion a district court's proper analysis is squarely and narrowly focused on the sufficiency of evidence." Chaney , 483 F.3d at 1227. Thus, in ruling on Nationwide's renewed motion under Rule 50(b) after the jury has rendered a verdict, this Court's sole consideration is to assess whether the jury's verdict is supported by sufficient evidence. Id. ; see also Lipphardt , 267 F.3d at 1186. In assessing a motion under Rule 50, the Court must review the evidence adduced at trial in the light most favorable to the non-movant. Chaney , 483 F.3d at 1222–23.

B. DISCUSSION

Nationwide argues that the evidence does not support a finding of bad faith. Instead, Nationwide asserts that it cannot be held liable for bad faith failure to settle because (1) Nationwide acted as any reasonably prudent insurer would in responding to Plaintiffs' settlement demand, and (2) Nationwide gave greater consideration to Mr. Park's financial interests than its own.

1. Whether Nationwide Acted as a Reasonably Prudent Insurer By Not Accepting Plaintiffs' April 18, 2006 Time-Limited Demand

Nationwide asserts that no reasonably prudent insurer would have accepted Charles McAleer's April 18, 2006 settlement demand because (1) it did not clearly offer to resolve the estate claim, and (2) McAleer did not have the apparent authority to settle the claim on behalf of the estate.

Nationwide's first argument is in some respects a repackaging of its argument on summary judgment that the settlement offer was incapable of acceptance. The evidence presented during the course of the trial did not materially alter the factual and legal posture of the case discussed in the Court's order on Nationwide's motion for summary judgment. (Trial Transcript Doc. 190 at p. 1103.) The Court ruled at the summary judgment stage (Doc. 105 at 19-26), and as to Plaintiffs' motion for judgment as a matter of law at trial, that the offer was capable of acceptance as a matter of law based on the evidence presented. (Id. at 1102–03.)

Nationwide also reargued this issue in its own motion for judgment as a matter of law raised at the conclusion of the Plaintiffs' case. After taking the motion under advisement until the conclusion of all the evidence, the Court rejected Nationwide's motion and Nationwide has not offered any reason or authority that would compel revisiting that decision. (Trial Transcript Doc. 190 at p. 1103-04.) As noted by the Court at trial, there was additional evidence provided via Plaintiff's expert, Peter Knowe¹ , that insurance companies are accustomed to settling cases with the understanding that the formalities of setting up an estate are in progress or not yet set up. (Trial Transcript Doc. 186 at pp. 359-60; Doc. 187 at pp. 578-79, 583.) The proposed settlement agreement provided that it would have to be approved by the probate court for the estate of Stacey Camacho. The identity of the eventual administrator would have made no difference in that regard. Based on the trial testimony and the claims log, Ms. Wilson and Nationwide clearly understood that Mr. McAleer was representing both Mr. Camacho and Ms. Nichols in connection with both the wrongful death claim and the estate claim. The agreement called for all funds to be held in the attorney's escrow account. Mr. McAleer, as a matter of law, was therefore legally bound not to release the funds except in connection with satisfaction of both the wrongful death and estate claims on behalf of Stacey Camacho. None of the circumstances of this purported lack of clarity identified by Nationwide now as rendering the settlement offer unreasonable in terms of acceptance have changed since June 9, 2006 when Nationwide belatedly tendered its offer to settle based on the precise same facts and legal posture of the case.

Nationwide further argues that a reasonable insurer would not have accepted McAleer's demand because he did not have any apparent authority to settle the claim on behalf of the Estate. Nationwide has failed to point to any legal authority to support its position that an estate claim cannot be settled unless an administrator has been appointed. Nor does Nationwide point to any evidence at trial that Wilson or anyone at Nationwide was concerned about an alleged lack of settlement authority by McAleer at the time.² Nationwide's position is belied by Sharon Wilson's handling of the "estate issue." Both before Plaintiffs' demand was made and after it had expired, Wilson made offers to settle the estate claim with knowledge that a formal estate had not yet been set up and no administrator of the estate had yet been appointed. Indeed, Nationwide's proposed general release form included language reflecting its knowledge that no administrator had been appointed with respect to the estate:

AUTHORITY: I/we have full authority to execute a binding release of the above-referenced claim. I/we have not assigned this claim to anyone else. There is no guardian, trustee, executor, administrator, or other person or entity with power to approve or disprove settlement of the above-referenced claim.

(Def.'s Ex. 6.)

McAleer's authority to settle on behalf of the estate was never raised as an issue during Wilson's handling of the claim. Although Nationwide argues in its motion that the "purported [attorney-client] contract was signed by Jesus Camacho," no such evidence was admitted at trial. Instead, the parties agreed to the following stipulation that was read by the Court to the jury about the Camacho family's hiring of Mr. McAleer:

Charles McAleer was and is the attorney of Jesus Camacho, the surviving spouse of Stacey Camacho, and LaJean Nichols, the administratrix of the estate of Stacey Camacho. On February 28th, 2006, Jesus Camacho, individually and on behalf of the estate, hired Mr. McAleer to represent their interests regarding causes of action arising out of Stacey's death. At the meeting on that same date, Mr. Camacho and Mrs. Nichols agreed upon a contingency fee retainer contract with Mr. McAleer.

(Trial Transcript Doc. 188 at p. 650.)

LaJean Nichols, Stacey Camacho's mother who was ultimately appointed as the Administratrix³ of the estate, testified that at a February 2006 meeting with Sharon Wilson, Wilson presented LaJean and Jesus with a check for $97,000 and a general release. (Trial Transcript Doc. 186 at p. 297-301.) Nichols...