King v. Gov't Emps. Ins. Co.
| Decision Date | 13 September 2012 |
| Docket Number | Case No. 8:10-cv-977-T-30AEP |
| Parties | MICHAEL KING, etc., et al., Plaintiffs, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Middle District of Florida |
THIS CAUSE comes before the Court upon GEICO General Insurance Company's Motion for Summary Judgment and Incorporated Memorandum of Law (Dkt. 66), Plaintiffs' Response in Opposition to Defendant's Motion for Summary Judgment (Dkt. 73), Plaintiffs' Dispositive Motion for Partial Summary Judgment as to Defendant's Third, Fourth and Sixth Affirmative Defenses and Incorporated Memorandum of Law (Dkt. 67), and GEICO's Response in Opposition to Plaintiffs' Motion for Partial Summary Judgment (Dkt. 72). The Court, having reviewed the motions, responses, record, and being advised of the premises, concludes that genuine issues of material fact preclude summary judgment on the bad faith claim. Therefore, GEICO's Motion for Summary Judgment must be denied, with the exception that the Court will grant GEICO's motion for partial summary judgment on the underlying verdict as an element of damages. Additionally, the Court will grant summary judgment in the Kings' favor on Defendant's Third, Fourth, and Sixth Affirmative Defenses.
This is a first-party bad faith action, brought pursuant to § 624.155, Florida Statutes, by Plaintiffs Michael King and Phyllis King against Defendant GEICO. This bad faith action arises out of an automobile accident that occurred on August 11, 2004, in Hillsborough County, Florida. GEICO had issued an insurance policy to Donna Buttermore, who was the passenger and owner of the vehicle driven by Michael King. The policy, in effect at the time of the accident, afforded Uninsured/Underinsured Motorist ("UM") benefits in the amount of $25,000 per person. Michael King was a Class II insured under the policy and eligible to receive $25,000 in UM benefits.
The underlying action to determine liability was brought in the Thirteenth Judicial Circuit Court in and for Hillsborough County, Florida. In July 2009, the jury returned a verdict in favor of Michael King in the amount of $1,638,171.00, and the state court entered judgment for the full amount of the $25,000 UM policy. On appeal, the Second District Court of Appeal did not review the verdict in excess of the policy limits because it was not included in the final judgment. The Kings then moved to amend the complaint to assert a bad faith claim against GEICO, and the state court granted that motion on April 8, 2010. GEICO filed its Notice of Removal in this Court on April 23, 2010.
King was involved in a three-car accident during the early hours of August 11, 2004. Both other drivers, Holly Hahto and Kristen Livingston, were cited by the Florida Highway Patrol for careless driving. Hahto was insured by Liberty Mutual with a policy that provided up to $100,000 in bodily injury liability coverage, and Livingston was insured by USAA withthe same coverage. Both tortfeasors claimed the other caused the accident, so liability remained disputed.
Immediately following the accident, King reported to GEICO that he suffered "soreness" in his right knee, neck, left wrist, left elbow, and lower back. Later that day, King presented to Urgent Care with the same complaints and received a diagnosis of lumbar strain, contusion to right knee and left elbow, and wrist strain. He was instructed not to return to work for three days.
Over the next eighteen months, King presented to multiple physicians. Dr. Rog, King's primary physician referred him to Dr. Fiore, an orthopedic specialist, who recommended physical therapy and chiropractic care after reviewing a whole body bone scan and MRI which indicated degeneration in the lumbar spine. King then treated with Dr. Valdes, a chiropractor, and Dr. Garner, a neurologist. Dr. Garner identified a herniated nucleus polposus at L4-5 that made him a surgical candidate, as well as ascribing him with a 25% permanent impairment rating. She referred him to the Laser Spine Institute where he was recommended for a nerve root decompression surgery. King returned to Dr. Fiore who disagreed with immediate surgical intervention, rather suggesting that conservative care first be exhausted, although recognizing the probable necessity of surgery in the future. Finally, Dr. Turner, another orthopedic surgeon, recommended a lumbar percutaneous discectomy.
On April 13, 2006, Mr. Joseph Bryant, the Kings current co-counsel, sent offers of settlement to the three insurers: Liberty Mutual for $100,000, USAA for $50,000, and GEICO for the $25,000 UM benefits. In the settlement offer, Mr. Bryant detailed King'songoing treatment and his current medical bills totaling $19,515.15. Adjuster Walter Dunn was assigned the handling of King's UM claim and, after conferring with GEICO's Litigation Manager Gary Gertz, denied King's UM claim on May 8, 2006. GEICO did not conduct any additional investigation into the extent of King's injuries or future treatment; rather, both men agreed that the value of the claim was within a single tortfeasor's limits of $100,000.1
On June 9, 2006, King filed a Civil Remedy Notice ("CRN") with the Department of Insurance ("Department"). The CRN included the allegation that "[GEICO] has not attempted in good faith to settle this claim when, under all circumstances, it could have and should have done so, had it acted fairly and honestly toward its insured and with due regard[] for their [sic] interests." Also on June 9, 2006, the Kings filed suit against Hahto and GEICO for the underlying liability action. On June 22, 2006, again after failing to conduct further investigation or reconsidering prior evaluations of King's claim, GEICO denied King's demand for UM benefits under the CRN.
In July 2007, GEICO received King's medical records evidencing he had undergone a much more serious surgery from a new physician than had been previously disclosed to GEICO a year earlier in the settlement offer. On September 7, 2007, GEICO tendered the full $25,000 UM policy amount; however, King refused to accept it. In March 2008, the Kings settled with the other two tortfeasors, and, in July 2009, the underlying action wastried before a jury that found King had suffered $1,638,171.00 in damages as a result of the August 11, 2004 accident.
Motions for summary judgment should be granted only when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The existence of some factual disputes between the litigants will not defeat an otherwise properly supported summary judgment motion; "the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (emphasis in original). The substantive law applicable to the claimed causes of action will identify which facts are material. Id. Throughout this analysis, the court must examine the evidence in the light most favorable to the non-movant and draw all justifiable inferences in its favor. Id. at 255.
Once a party properly makes a summary judgment motion by demonstrating the absence of a genuine issue of material fact, whether or not accompanied by affidavits, the nonmoving party must go beyond the pleadings through the use of affidavits, depositions, answers to interrogatories and admissions on file, and designate specific facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 324. The evidence must be significantly probative to support the claims. Anderson, 477 U.S. at 248-49 (1986).
This Court may not decide a genuine factual dispute at the summary judgment stage. Fernandez v. Bankers Nat'l Life Ins. Co., 906 F.2d 559, 564 (11th Cir. 1990). "[I]f factual issues are present, the Court must deny the motion and proceed to trial." Warrior Tombigbee Transp. Co. v. M/V Nan Fung, 695 F.2d 1294, 1296 (11th Cir. 1983). A dispute about a material fact is genuine and summary judgment is inappropriate if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson, 477 U.S. at 248; Hoffman v. Allied Corp., 912 F.2d 1379 (11th Cir. 1990). However, there must exist a conflict in substantial evidence to pose a jury question. Verbraeken v. Westinghouse Elec. Corp., 881 F.2d 1041, 1045 (11th Cir. 1989).
Florida law recognizes bad faith actions against an insurer arising out of the handling of claims, including a UM claim. Fla. Stat. § 624.155 (2005). Unlike third-party bad faith actions that were recognized as early as 1938, there has never been a common law cause of action in Florida for first-party bad faith actions. State Farm Mut. Auto. Ins. Co. v. LaForet, 658 So. 2d 55, 58-59 (Fla. 1995). Thus, in 1982, the Florida Legislature enacted § 624.155, which authorizes an insured to sue its insurer for "[n]ot attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests." Fla. Stat. § 624.155(1)(b).
The "good faith" standard obligates an insurer to use the same degree of care and diligence to settle a claim as would a reasonably prudent person faced with the prospect of paying the total recovery. Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla. 1980). This includes the duty to investigate the facts, give fair consideration to reasonable settlement offers, and, if possible, settle. Id. Courts apply a totality-of-the-circumstances standard to this analysis when evaluating bad faith actions. Kearney v. Auto-Owners Ins. Co., 664 F. Supp. 2d 1234, 1242 (M.D....
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