Talat Enterprises, Inc. v. Aetna Cas. & Sur. Co.

• Decision Date: 14 June 1996
• Docket Number: No. 95-760-CIV-ORL-22.,95-760-CIV-ORL-22.
• Citation: 952 F.Supp. 773
• Parties: TALAT ENTERPRISES, INC. d/b/a Billy the Kid's Buffet, Plaintiff, v. AETNA CASUALTY & SURETY CO. d/b/a Aetna Life & Casualty, Defendant.
• Court: U.S. District Court — Middle District of Florida

952 F.Supp. 773

TALAT ENTERPRISES, INC. d/b/a Billy the Kid's Buffet, Plaintiff, v. AETNA CASUALTY & SURETY CO. d/b/a Aetna Life & Casualty, Defendant.

No. 95-760-CIV-ORL-22.

United States District Court, M.D. Florida, Orlando Division.

June 14, 1996.

Morton Kosto, Kosto & Rotella, P.A., Orlando, FL, William F. Merlin, Jr., William F. Merlin, Jr., P.A., Tampa, FL, for Talat Enterprises, Inc.

Philip Edward Beck, Smith, Currie & Hancock, Atlanta, GA, for Aetna Cas. and Surety Co.

MEMORANDUM OF DECISION

GLAZEBROOK, United States Magistrate Judge.

MOTION: DEFENDANT'S MOTION FOR SUMMARY JUDGMENT [Docket No. 25]

                FILED: June 14, 1996
                  DISPOSITION: GRANTED
                

I. INTRODUCTION

On January 28, 1997, this Court heard oral argument on defendant Aetna Casualty & Surety Co.'s motion for summary judgment [Docket No. 25], memorandum [Docket No. 26], and statement of undisputed facts [Docket No. 27], and on plaintiff Talat Enterprises, Inc.'s memorandum in opposition [Docket No. 28]. Aetna's motion for summary judgment is GRANTED.

This case arises out of a fire on April 15, 1994 in the kitchen at Billy the Kid's Buffet, owned by Talat. At the time of the fire, Aetna insured Talat through a commercial fire policy. Talat argues that Aetna breached a covenant of good faith and fair dealing under the policy by failing to promptly negotiate and settle claims for fire-damaged business property and lost business income, by delaying payment of those claims without proper cause, and by withholding repair moneys. Amended Complaint, Docket No. 2 at 2-3 and 5, ¶¶ 9-10, 25-25. Talat's amended complaint seeks damages from Aetna pursuant to Fla.Stat.Ann. § 624.155(1)(b)(1), which provides a civil remedy against an insurance company that has not attempted to settle claims in good faith.¹

Aetna seeks a summary determination that it is not liable to Talat for failure to attempt to settle in good faith. Aetna contends that, as a matter of law, Aetna paid the damages and corrected the circumstances giving rise to the alleged violation before the sixty-day period allowed by Fla.Stat.Ann. § 624.155(2)(d) had elapsed. Indeed, the parties do not seriously dispute that Aetna had paid Talat $331,930.97 ($119,007.47 for personal property plus $212,923 for business interruption), Docket No. 2 at 6, ¶¶ 28-29, before the sixty-day period even began.

II. THE SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that 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). The moving party bears the initial burden of showing the Court, by reference to materials on file that there are no genuine issues of material fact that should be decided at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Jeffery v. Sarasota White Sox, 64 F.3d 590, 593-94 (11th Cir.1995); Clark v. Coats & Clark, Inc., 929 F.2d 604 (11th Cir.1991). A moving party discharges its burden on a motion for summary judgment by showing the Court that there is an absence of evidence to support the non-moving party's case. Celotex, 477 U.S. at 325, 106 S.Ct. at 2553-54. Rule 56 permits the moving party to discharge its burden with or without supporting affidavits and to move for summary judgment on the case as a whole or on any claim. Id. When a moving party has discharged its burden, the non-moving party must then "go beyond the pleadings," and by its own affidavits or by "depositions, answers to interrogatories, and admissions on file," designate specific facts showing that there is a genuine issue for trial. Id. at 324, 106 S.Ct. at 2553.

In determining whether the moving party has met its burden of establishing that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law, the Court must draw inferences from the evidence in the light most favorable to the non-movant and resolve all reasonable doubts in that party's favor. Spence v. Zimmerman, 873 F.2d 256 (11th Cir.1989); Samples on behalf of Samples v. City of Atlanta, 846 F.2d 1328, 1330 (11th Cir.1988). The Eleventh Circuit has explained the reasonableness standard:

in deciding whether an inference is reasonable, the Court must "cull the universe of possible inferences from the facts established by weighing each against the abstract standard of reasonableness." [citation omitted]. The opposing party's inferences need not be more probable than those inferences in favor of the movant to create a factual dispute, so long as they reasonably may be drawn from the facts. When more than one inference reasonably can be drawn, it is for the trier of fact to determine the proper one.

Jeffery v. Sarasota White Sox, 64 F.3d 590, 594 (11th Cir.1995), quoting WSB-TV v. Lee, 842 F.2d 1266, 1270 (11th Cir.1988).

Thus, if a reasonable fact finder evaluating the evidence could draw more than one inference from the facts, and if that inference introduces a genuine issue of material fact, then the court should not grant the summary judgment motion. Augusta Iron and Steel Works v. Employers Insurance of Wausau, 835 F.2d 855, 856 (11th Cir.1988). A dispute about a material fact is "genuine" if the "evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52 106 S.Ct. at 2511. On a summary judgment motion the Court may not weigh the credibility of the parties. See Rollins v. TechSouth, Inc., 833 F.2d 1525, 1531 (11th Cir.1987). If the determination of the case rests on which competing version of the facts or events is true, the case should be presented to the trier of fact. Id.

Where a statute has clear and unambiguous wording, this Court will defer to that clear wording, and is not free to speculate on the repercussions. Auto-Owners Insurance Co. v. Conquest, 658 So.2d 928 (Fla. 1995) (relating to § 624.155). Also, the interpretation of an insurance contract is a question of law which may be determined on summary judgment. Galen Health Care, Inc. v. American Company of Reading, Pennsylvania, 913 F.Supp. 1525, 1528 (M.D.Fla.1996), citing Cranford Ins. Co. v. Allwest Ins. Co., 645 F.Supp. 1440, 1441 (N.D.Cal.1986) and Continental Casualty Co. v. City of Richmond, 763 F.2d 1076, 1079 (9th Cir.1985).

III. THE FLORIDA LAW ON GOOD FAITH SETTLEMENT

Under Florida law, any person may bring a civil action against an insurer when such person is damaged by the commission of the following act by the insurer:

Not 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 his interests;

Fla.Stat.Ann. § 624.155(1)(b)(1).² In determining whether an insurer has "acted fairly and honestly toward its insured and with due regard for his interests" the Supreme Court of Florida applies the "totality-of-the-circumstances" standard in § 624.155, and not a "fairly debatable" standard. State Farm Mutual v. Laforet, 658 So.2d 55, 62-63 (Fla. 1995) (requiring evaluation of insurer's promptness and diligence in resolving coverage dispute in a first-party cause of action), receding from Imhof v. Nationwide Mutual Ins. Co., 643 So.2d 617, 619 (Fla.1994) (dicta adopting "fairly debatable" standard).

As a condition precedent to bringing an action under § 624.155, and to perfect the right to sue under the statute, the claimant must give the Florida Department of Insurance and the insurer sixty days' written notice of the violation. Fla.Stat.Ann. § 624.155(2)(a)-(b). The statute specifies that "No action shall lie if, within 60 days after filing notice, the damages are paid or the circumstances giving rise to the violation are corrected." Fla.Stat.Ann. § 624.155(2)(d) (emphasis supplied).

Section 624.155 does not define either the term "damages are paid" or the term "circumstances giving rise to the violation are corrected." The Florida Legislature has not specified precisely what damages an insurer must pay before the sixty-day period expires in order to avoid a bad faith action. Aetna contends that the insurer need only pay the claim made on the policy. Talat, however, contends that the insurer must not only pay the claim, but must also pay all compensatory damages that flow from any delay in settling the claim. Talat stops short of claiming that the insurer must also pay punitive damages and attorney's fees within the sixty-day period. Although neither party points to legislative history to support their contention, the few Florida cases on point are more consistent with Aetna's reading of § 624.155(2)(d).

A first-party bad faith claimant cannot state a cause of action until he can allege that there has been a determination of the insured's damage, whether by litigation or arbitration. Imhof, 643 So.2d at 617; Brookins v. Goodson, 640 So.2d 110, 112 (4th DCA 1994). The arbitration award is a predicate or prerequisite to initiating a first-party failure to settle suit. The failure to settle cause of action does not accrue until after the conclusion of the underlying arbitration. Brookins, 640 So.2d at 113. One might fairly infer from language in Brookins that an insurer may escape liability for failure to attempt to settle in good faith by paying the policy limits before the sixty-day "window period" expires:

The only way for an insurer to avoid an action being brought for statutory bad faith is set forth in section 624.155(2)(d) ... It follows that an insurer cannot escape liability for a violation of section 624.155 by the simple...