Maharaj v. Geico Cas. Co.

• Decision Date: 12 February 2014
• Docket Number: Case No. 12–80582–CIV.
• Court: U.S. District Court — Southern District of Florida
• Parties: Angela MAHARAJ, as Natural Parent and Guardian of Kameren Maharaj, a minor, Plaintiff, v. GEICO CASUALTY COMPANY, Defendant.

996 F.Supp.2d 1303

Angela MAHARAJ, as Natural Parent and Guardian of Kameren Maharaj, a minor, Plaintiff,

v.GEICO CASUALTY COMPANY, Defendant.

Case No. 12–80582–CIV.

United States District Court,

S.D. Florida.

Feb. 12, 2014.

Richard Mark Benrubi, Liggio Benrubi & Williams, West Palm Beach, FL, for Plaintiff.

Megan Marie Hall, Michael Todd Bill, Adam Alexander–Speer Duke, Jordan Marshall Thompson, B. Richard Young, Young Bill Fugett & Roumbos, Pensacola, FL, Katina M. Hardee, Young, Bill, Roumbos & Boles, P.A., Miami, FL, for Defendant.

OPINION AND ORDER

KENNETH A. MARRA, District Judge.

THIS CAUSE is before the Court upon Defendant GEICO Casualty Company's Motion for Summary Judgment [DE 43]. The Court has carefully considered the motion and is otherwise fully advised in the premises.

I. Background

GEICO issued an automobile policy, policy number 403651492, to Junie Telfort, effective January 31, 2007 to July 31, 2007. The policy provided Bodily Injury Liability (“BI”) coverage in the amount of $10,000.00 per person and $20,000.00 per accident. [DE 42–1].

On May 17, 2007, Ms. Telfort entered an intersection, causing Surendra Maharaj to swerve his Ford Explorer to avoid an impact with Ms. Telfort's vehicle. The Exploreroverturned multiple times. As a result of this accident, Kameren, Surendra's six year old son, had his left leg amputated from the knee down. [DE 42 at 1–2, DE 49 at 1].

Ms. Telfort left the scene of the accident. She was arrested and pled guilty to leaving the scene of a crash and reckless driving causing injury to a person. [DE 42–3].

GEICO first became aware of this accident the next day, when one of its field representatives, Cindy Ruehl, saw an article in the newspaper, and determined that the accident involved a GEICO insured. [DE 42 at 2, DE 49–2 at 16]. She forwarded the article to Gary D. Gertz, a Regional Claims Manager for GEICO, who reviews serious claims, [DE 49–2 at 12], and Mark Sugden, the Second Regional Claims Manager. [ Id. at 7, 17–18]. The article indicated that GEICO's insured had run a stop sign; that she had fled the scene of the accident and been arrested later; and that a six year old boy's left foot had been severed in the crash. [ Id. at 18]. Mr. Gertz testified that GEICO would have wanted to resolve the claim as quickly as possible. [ Id. at 21]. He testified, “That's our duty. When liability is reasonably clear and damages indicate the policy limits should be paid, we want to pay our limits.” [ Id.].

Matthew Green was the GEICO adjuster assigned to this claim. He testified that he recalled that GEICO had a reasonable opportunity to settle this case. [DE 49–1 at 13].

On May 22, 2007, Mr. Green sent a letter to Ms. Telfort advising her that the preliminary investigation revealed that the total claims may exceed her coverage with GEICO. The letter stated, in part, “We will make every effort to settle all claims within your coverage limit. If we are unable to do so, you are hereby notified that you may be exposed personally for any amount in excess of your limits.”

On June 5, 2007, Kenneth N. Metnick, the attorney for Kameren Maharaj, wrote to GEICO and demanded that GEICO tender its liability policy limits within 30 days as compensation for the injuries sustained as a result of the negligence of its insured. [DE 42–9].

On June 8, 2007, less than a month after the accident, GEICO hand-delivered a letter to Mr. Metnick containing a $10,000 check payable to Surendra and Angela Maharaj; a $10,000 check payable to the Maharajs on behalf of their son, Kameren; and proposed releases for each claim. [DE 42–11]. The letter states that should he have any questions or concerns regarding the enclosures, he should contact Matthew Green, who was the adjuster on the file. [ Id.]. The releases contained an indemnification and hold harmless clause which stated:

IN FURTHER CONSIDERATION of said payment, Releasor(s) agree to defend, protect, indemnify and hold harmless Releasee(s) from any and every claim or demand, loss and expense of every kind, which may ever be asserted by him/her/them, on his/her/their account, or by anyone else, arising out of any bodily injuries and property damages sustained by Releasor(s) as set forth above, and Releasee(s) shall be entitled to plead this obligation and this Release in defense of any such claim. Releasor(s) specifically undertake and agree to defend, indemnify and hold harmless Releasee(s) for any claims, demands, liens, or assignments, relating to the medical care, diagnosis or treatment of Releasor(s), and any workers compensation claims, demands or liens now pending, or which may be asserted in the future, and any liens arising out of the legal representation of Releasor(s).

[DE 42–11 at 4, 6].

Mr. Gertz testified that at the time this claim arose, GEICO was using an indemnification and hold harmless clause in its releases. [DE 49–2 at 25]. He testified that the clause was to protect GEICO and its insureds from any additional claims that might arise after the release was signed. [ Id.]. He agreed that the effect of the indemnity clause would be to shift the duty to defend as to any future claim by, e.g., a hospital, a medical provider, or a joint tortfeasor, from GEICO to the injured claimant. [ Id. at 25–28]. GEICO's releases were changed in 2008 on advice of counsel to remove the indemnification and hold harmless clause. [ Id. at 25]. Prior to this revision, Mr Gertz testified that GEICO had no policy of which he was aware not to remove the indemnification clause if requested. [ Id. at 32].

On June 27, 2007, Mr. Green sent a letter to Ms. Telfort requesting a statement from her. The letter did not advise Ms. Telfort of Mr. Metnick's demand or that GEICO had tendered its policy limits. [DE 49–13]. When asked if there was a reason why the letter had not contained this information, Mr. Green testified, “No.” [DE 49–1 at 24].

By letter dated July 10, 2007, Mr. Metnick wrote to Mr. Green stating in total: “The check and release issued to Kameren Maharaj is unacceptable because of the inclusion of property damage and indemnification clause in the Release.” [DE 42–14]. GEICO did not advise its insured, Ms. Telfort, of this response. [DE 49–1 at 29].

The next day, Mr. Metnick's letter was reviewed by Miriam Rivera of GEICO, who was covering for Mr. Green, who was out of the office. [DE 49–3 at 11–12]. Ms. Rivera read into the record at her deposition from her log entry relative to this letter, as follows:

Received letter from claimant attorney advising that the check and release issued to Kameren Maharaj was unacceptable because of the inclusion of the property damage and the indemnification clause in the release.

Called and spoke with Attorney Ken Metnick. I asked for clarification. Was he telling us that his clients were not accepting the tender? Attorney advised that was not what he was saying. He believes that the father will accept the tender as his injuries are not as significant as his son's.

He does not know if his clients will accept the tender for the son, Kameren Maharaj, due to the severity of the injuries and the fact they are looking at a claim/suit against Ford due to the rollover. Clients may not want to let anybody out of this but nothing sure yet. He did advise that this is a very emotional issue right now with the parents and they are not ready to make a decision right now.

With regards to the release, he advised they would have no objections to the release if we removed the property damage and the indemnification clause. I asked them to make changes needed or if he had a release he would like to send us for review. Attorney advised he would prefer we just take out the above and send them new releases for both clients.

I did advise him that per field adjuster's documentation, she advised his assistant that we were aware of the PD language on the release and advised her it was okay for them to cross this portion out as PD claim had not yet been resolved. Attorney advised he has known Cindy for many years and knew she would not have a reason to lie about this. Does believe she told assistant that.

Attorney advised he is not looking to allege bad faith here, just wants to make sure his clients' best interest is protected here.

I advised I would discuss with manager release issue. Will send letter confirming that he has no objections to the release if PD and indemnification clause are removed and advised all understood.

Attorney also advised no need to reissue checks. Releases were the issue.

[ Id. at 18]. Plaintiff states that there exist genuine issues of fact relative to this conversation, as Mr. Metnick disputes the accuracy of certain portions of this summary. [DE 49 at ¶ 18, DE 43–4 at 60, ln. 21–23, 61, ln. 1–12, 64, ln. 4–25–65, ln. 1–15]. Mr. Metnick testified:

I am looking at this and I don't want to be nasty but it's absolutely absurd for GEICO or her to claim that I asked them to change the release and take the indemnification clause out, but I didn't want to settle. What did I ask them to take it out for? Not to settle, and why was she looking to take it out if I wasn't going to settle. We wanted to settle, we were going to pursue Ford. We were not thinking of going after someone with a ten thousand dollar policy.

[DE 43–4 at 62, ln. 13–21].

Ms. Rivera spoke with Kathy Watkins, who was Matthew Green's manager. [ Id. at 20]. Ms. Watkins instructed her to send the inquiry to Carol Hambrick. [ Id. at 21]. Ms. Hambrick sent a message to Ms. Rivera and Ms. Watkins on July 11, 2007 telling Ms. Rivera to prepare the revised release with the attorney's reason for the change and send it to GEICO's claims home office legal for review. [ Id. at 21–22]. Ms. Rivera had no independent recollection of having done this. [ Id. at 22]. If she had done it, she would normally have put a note in the log. [ Id.]. She acknowledged that the log did not indicate either way whether the instructions were followed. [ Id.]. She...