Potter v. Progressive Am. Ins. Co.

Citation524 F.Supp.3d 1261
Decision Date09 March 2021
Docket NumberCase No. 8:20-cv-2204-T-30TGW
Parties Daniel Lee POTTER and Joleen Potter, Plaintiffs, v. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant.
CourtU.S. District Court — Middle District of Florida

Khalil Easa Farah, Farah & Farah, PA, Jacksonville, FL, for Plaintiff Daniel Lee Potter.

Michael Stanley Rywant, Kerry C. McGuinn, Jr., Rywant, Alvarez, Jones, Russo & Guyton, PA, Tampa, FL, for Plaintiffs.

B. Richard Young, Jordan Marshall Thompson, Megan Alexander, Joshua John Cecil Hartley, David Michael Angley, Young, Bill, Boles, Palmer & Duke P.A., Tampa, FL, for Defendant.



THIS CAUSE is before the Court upon Defendant's Motion for Summary Judgment (Dkt. 18), Plaintiffs’ Response in Opposition (Dkt. 34), and Defendant's Reply (Dkt. 36). The Court, having reviewed the motion, response, reply, record evidence, and being otherwise advised in the premises, concludes that Defendant's motion should be granted because the record is undisputed that an element of this bad faith insurance action—an excess judgment (or its functional equivalent)—is lacking as a matter of law.


This is a third-party bad faith insurance action brought by Plaintiffs Daniel Lee Potter and Jolene Potter against Defendant Progressive American Insurance Company. Plaintiffs allege that Progressive acted in bad faith in its handling of a bodily injury ("BI") claim that Plaintiffs asserted against Progressive's insured, Ronald Dale Evans, arising from an automobile accident that occurred on November 10, 2016.

On September 25, 2020, Progressive filed a Motion to Dismiss for failure to state a claim, arguing that Plaintiffs failed to obtain an excess judgment or its functional equivalent in order to assert the present third-party bad faith action. On October 19, 2020, Plaintiffs filed their Response in Opposition. On October 22, 2020, the Court entered an Order converting Progressive's Motion to Dismiss to a Motion for Summary Judgment. (Dkt. 17). The Court subsequently permitted the parties to conduct discovery on the narrow issue of whether an excess judgment or its equivalent was obtained in the underlying action. The parties conducted this discovery and now this matter is ripe for the Court's disposition.


Motions for summary judgment should be granted only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any 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." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotation marks omitted); Fed. R. Civ. P. 56(c). 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, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). 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 nonmovant and draw all justifiable inferences in its favor. Id. at 255, 106 S.Ct. 2505.

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, 106 S.Ct. 2548. The evidence must be significantly probative to support the claims. Anderson , 477 U.S. at 248–49, 106 S.Ct. 2505.

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, 106 S.Ct. 2505 ; Hoffman v. Allied Corp. , 912 F.2d 1379, 1383 (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).


As the Court stated previously, to prevail in a bad faith case, there must be "a causal connection between the damages claimed and the insurer's bad faith." (Dkt. 17) (citing Perera v. U.S. Fid. & Guar. Co., 35 So. 3d 893, 903–04 (Fla. 2010) ; Cunningham v. Standard Guar. Ins. Co. , 630 So. 2d 179, 181–82 (Fla. 1994) ("[A] third party must obtain a judgment against the insured in excess of the policy limits before prosecuting a bad-faith claim against the insured's liability carrier.")). If a plaintiff can show breach and causation, he can show injury. The amount of liability that exceeds the policy limits is the injury. United Servs. Auto Ass'n v. Jennings , 731 So. 2d 1258, 1259 n.2 (Fla. 1999). An excess judgment is required before the bad faith case can proceed. "Causation is a prerequisite for the claim: for an insured to bring a bad faith claim, the injured party must first win an excess judgment." Cawthorn v. Auto-Owners Ins. Co. , 791 F. App'x 60, 64–66 (11th Cir. 2019) (citing Cunningham , 630 So. 2d 179 at 181–82 ).

There are three exceptions to the excess judgment rule that are deemed "functional equivalents" of an excess judgment under Florida law. Cawthorn , 791 F. App'x at 64-66 (citing Perera v. U.S. Fid. & Guar. Co. , 35 So. 3d 893, 899 (Fla. 2010) ). The first exception is called a Cunningham agreement, wherein the insurance company and the injured third party agree to try the bad faith claim first, and, if the jury finds no bad faith, the parties agree to settle for the policy limits. Cunningham , 630 So. 2d at 182.

The second exception is called a Coblentz agreement. Coblentz agreements arise when the insurance company fails to defend the insured and, in response, the insured and the injured third party agree to settle the suit and allow the injured third party to sue the insurance company on a theory of bad faith. See Cawthorn , 791 F. App'x at 64 (citing Coblentz v. Am. Sur. Co. of N.Y. , 416 F.2d 1059, 1062-63 (5th Cir. 1969) ); Steil v. Fla. Physicians’ Ins. Reciprocal , 448 So. 2d 589, 591 (Fla. 2d DCA 1984).

The third exception occurs when an excess carrier incurs damages because the primary carrier acted in bad faith. In such cases, an excess carrier may bring a bad faith claim against a primary insurer "by virtue of equitable subrogation." Perera , 35 So. 3d at 900.

In summary, the salient issue is whether there is an excess judgment or its functional equivalent. The Court concludes, after interpreting the record in a light most favorable to Plaintiffs, that there is not because none of the delineated exceptions apply here.

The record reflects that Plaintiffs filed a lawsuit against Evans in Pasco County, Florida, Case No. 17-CA-000561 ("the underlying action"). Progressive, pursuant to the terms of the subject policy, proceeded to defend Evans in the underlying action and retained attorney Stuart Freeman to represent Evans. It is undisputed that at no time did Progressive withdraw its defense of Evans, nor did Evans reject Progressive's defense.

On April 20, 2018, Plaintiffscounsel, Raymond Haas, wrote a letter to Freeman. Haas wrote in relevant part that it would be a "realistic solution" for the parties to stipulate "for the entry of a judgment, assignment of benefits and agreement to prosecute the bad faith case by Mr. Evans against the insurer." (Dkt. 18 at Ex. D).

On June 4, 2018, Progressive responded directly to Haas’ April 20, 2018 letter. Progressive stated that "we will not agree to a stipulation for the entry of a judgment, assignment of benefits and agreement to prosecute the bad faith case." (Dkt. 18 at Ex. E).

On July 23, 2018, Plaintiffs served a Proposal for Settlement in the underlying action in the amount of $125,000. Two days later, on July 25, 2018, Plaintiffs served two separate Proposals for Settlement: one from J. Potter to Evans in the amount of $35,000 and one from D. Potter to Evans in the amount of $90,000. On August 8, 2018, Progressive made a note indicating that "WE WILL ALLOW THE PFS(S) TO EXPIRE EMAIL TO DEF. ATTY. CONF. SAME." (Dkt. 18 at Ex. C: PRG 0014).

On August 14, 2018, Freeman sent Evans correspondence, confirming a telephone conversation the two had regarding the Proposals for Settlement. Therein, Freeman wrote "[a]s I explained to you, on July 25, 2018, both Plaintiffs served Proposals for Settlement wherein Daniel Lee Potter agreed to settle the case for $90,000.00, and Joleen Potter agreed to settle the case for $35,000.00, for a total of $125,000.00." Freeman further noted: "If these Proposals for Settlement are accepted, Progressive will only pay its policy limits of $10,000.00, leaving $115,00.00 unpaid, and a judgment will be entered against you in that amount." Freeman also stated in the letter that "Progressive has advised that should you accept these Proposals for Settlement, your acceptance will not constitute a waiver of any claims that you may have against Progressive for its negligence or bad faith." (Dkt. 18 at Ex. H).

It is undisputed that Progressive was not a party to the Proposals for Settlement, Progressive was not a party to the stipulated Final Judgment, and Progressive did not agree to be bound by either the Proposals for Settlement or the stipulated Final judgment. The Court concludes that these facts establish...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT