Thomas v. Lumbermens Mut. Cas. Co.

Decision Date30 November 1982
Docket NumberNo. 81-2727,81-2727
PartiesWilliam Bruce THOMAS, Appellant, v. LUMBERMENS MUTUAL CASUALTY COMPANY, Appellee.
CourtFlorida District Court of Appeals

Joe N. Unger, Miami, for appellant.

Kimbrell, Hamann, Jennings, Womack, Carlson & Kniskern and A.H. Toothman and John W. Wylie, Miami, for appellee.

Before HENDRY, BASKIN and FERGUSON, JJ.

HENDRY, Judge.

Appellant William Thomas, plaintiff below, appeals from a final judgment upon a jury verdict for Lumbermens in an action seeking excess coverage for Lumbermens' bad faith in negotiating settlement of Thomas' accident claim.

Viewed in the light most favorable to the verdict, the evidence shows that Thomas was severely injured on April 2, 1978 while a passenger in an automobile owned by Lumbermens' insured, Teodora J. Torres, and driven by Torres' son, Victor. Following the accident Lumbermens' claim representative twice sent no fault benefit applications and medical authorization forms to Thomas along with requests to contact the insurer. Thomas failed to ever contact Lumbermens or to return the forms, and subsequently filed suit alleging negligence. Pending trial, negotiations for settlement proceeded. Interrogatories mailed to Thomas through counsel were never answered. Around this same time, Lumbermens received a report from the Southeast Index Bureau indicating the possible extent of Thomas' injuries. Following receipt of this report, Lumbermens unsuccessfully sought medical confirmation of the injuries from Thomas and his attorney. Thomas' attorney did offer, however, to allow Lumbermens to review the files at his office. An independent adjuster for Lumbermens contacted the attorney's office on twenty-three occasions to set up an appointment to review the files, but never received a response.

In the meantime, discovery pleadings were served on Thomas' attorney seeking production of bills and medical reports. Thomas' deposition, scheduled for October 23, 1978, was cancelled by his attorney, and on October 24, 1978, Thomas offered to settle the claim for the policy limits. Unable to verify Thomas' injuries or expenses, Lumbermens refused the offer, which was later withdrawn. After moving for discovery sanctions, Thomas served responses to discovery including production of medical data. Upon review of this data, Lumbermens offered judgment of the policy limits. Thomas refused this offer and the cause proceeded to trial, resulting in an $810,000 verdict for Thomas.

Following judgment, the Torres assigned their rights against Lumbermens for excess to Thomas who sued the insurer alleging bad faith due to Lumbermens' failure to settle the claim for policy limits when it had the opportunity. Lumbermens defended, alleging Thomas' attorney failed to provide medical information or produce Thomas for examination in an attempt to set up the bad faith action. Following an extensive trial, the jury returned a verdict for Lumbermens. Thomas' post-trial motion for judgment notwithstanding the verdict was denied, and the final judgment appealed herein was entered.

On this appeal, Thomas raises three issues. He contends the trial court erred in (1) denying his motion to set aside the jury verdict when there was no evidence upon which the verdict could be sustained; (2) refusing to permit testimony of an intended rebuttal witness; and (3) denying his requested jury instruction on Lumbermens' duty to investigate.

A "bad faith" insurance suit, which may be maintained by either the insured or by the injured party standing in his place, is based on the insurer's breach of its duty to its insured to make a good faith offer of settlement within the policy limits, so as to avoid exposing the insured to an excess judgment. Kelly v. Williams, 411 So.2d 902 (Fla. 5th DCA 1982).

In response to Thomas' first point, we hold that the record in this case contains sufficient evidence to support the verdict. 1 The standard for determining liability of an insurance carrier in excess judgment cases is bad faith, rather than negligence, although consideration may be given to the negligence of the insurer in determining whether it has breached its duty to negotiate in good faith. DeLaune v. Liberty Mutual Insurance Co., 314 So.2d 601 (Fla. 4th DCA 1975), cert. denied, 330 So.2d 16 (Fla.1976). To hold the insurer liable for breach of its duty to compromise, the insured (or his assignee) must establish that the insurer's conduct amounted to either bad faith or fraud. Central National Insurance Co. v. Gonzalez, 295 So.2d 694 (Fla. 3d DCA 1974); Welborn v. American Liberty Insurance Co., 260 So.2d 229 (Fla. 1st DCA), cert. denied, 265 So.2d 372 (Fla.1972). Each case is to be determined on its own facts, and the question of the insurer's failure to act in good faith with due regard for the interests of the insured is for the jury. Liberty Mutual Insurance Co. v. Davis, 412 F.2d 475 (5th Cir.1969); Boston Old Colony Insurance Co. v. Gutierrez, 386 So.2d 783 (Fla.1980), cert. denied, 450 U.S. 922, 101 S.Ct. 1372, 67 L.Ed.2d 350 (1981).

Applying these principles to the present case, we think that the jury properly weighed the evidence and concluded that Lumbermens' conduct, while possibly somewhat less than diligent, did not rise to the level of bad faith or fraud. Although Thomas contends that Lumbermens should have taken steps to obtain the medical records necessary to confirm his condition following his offer to settle, the evidence shows that this was due, at least in part, to the failure of Thomas and his...

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    ...to support the rule the dissent proposes, on closer analysis neither case turns on that proposition. In Thomas v. Lumbermens Mut. Casualty Co., 424 So.2d 36, 39 (Fla.App.1982), the appellate court affirmed a judgment based on a jury verdict for the insurer, but in dictum suggested that an i......
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1 books & journal articles
  • Insurance bad faith: the "setup myth".
    • United States
    • Florida Bar Journal Vol. 77 No. 6, June 2003
    • June 1, 2003
    ...Enterprises, Inc. v. Aetna Casualty & Surety Co., 952 F. Supp. 773 (M.D. Fla. 1996). (12) Thomas v. Lumbermans Mutual Casualty Co., 424 So. 2d 36 (Fla. 3d D.C.A. 1983). (13) Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783 (Fla. 1980); Auto Mutual Indemnity Co. v. Shaw, 134 Fla. ......

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