The Florida Supreme Court came out strongly against insurance companies that delay, deny and low-ball legitimate claims in the recent decision, Fridman v. Safeco Ins. Co. of Ill.
At issue on appeal before the court was whether an auto insurance company could file a confession of judgment on the eve of trial and avoid a bad faith insurance claim. The answer was no.
This was a case where an insurance company dragged its feet for four years, denying an uninsured/underinsured motorist (UM/UIM) claim. Even when the plaintiff filed notice of intent to file a bad faith lawsuit, the company didn’t respond. And then when the plaintiff filed the lawsuit, the company still didn’t respond, and nor did the company answer when plaintiff offered to settle for the policy limits of $50,000. It wasn’t until a month before the trial was scheduled that insurer sent a confession of judgment and a $50,000 check.
Too little, too late. Plaintiff rejected that offer, and the court denied it too.
Case proceeded to trial and jurors determined underinsured motorist was 100 percent at-fault and insured’s damages were $1 million.
The Florida Supreme Court held that an insured is entitled to a determination of liability and the full extent of his or her damages before filing a first-party bad faith action.
According to court records, plaintiff suffered injuries as a result of a crash with an underinsured motorist. Following the accident, he filed a claim with his own insurance company to pay the $50,000 limits of the policy. But for almost two years, the company issued refusal after refusal to pay.
So finally, plaintiff filed a Civil Remedy Notice, as required by law, alleging the company failed a good faith attempt to settle the claim in violation of F.S. 624.155(1)(b)1, and that liability was clear. Property damage alone in the crash was $12,000, plus he’d incurred $16,800 in out-of-pocket medical expenses. He’d also sustained injuries for which doctors said he would likely require additional surgery in the future.
Plaintiff received no response from the insurer within the 60-day statutory window, so he formally filed his lawsuit to determine liability under the UM policy, plus the full extent of his damages.
Almost a year after filing the claim, plaintiff submitted an offer of settlement for the full policy limit of $50,000. Defendant did not respond within 30 days, and thus the court considered the settlement rejected.
It wasn’t until another full year had passed – and just a month before trial – that the insurer sent a check to insured, indicating it was the full and final settlement on any claims. But plaintiff by then rejected that offer, saying it should be the courts that should decide his total damages.
The insurer asked for a continuance, and the trial court granted it. Again, a month before the rescheduled trial, insurer sent another check for $50,000, and indicated this was to settle all claims. Plaintiff again refused.
Case went to trial. Jurors found insurer was liable and set plaintiff’s damages at $1 million.
Insurer appealed, and the appellate court reversed, finding the confessed judgment for $50,000 made the UM action moot.
The Florida Supreme Court quashed that ruling, deciding plaintiff’s action was not moot and he is now free to pursue his claim for bad faith.
The court ruled the insured is entitled to action from their insurer before they file a bad faith claim.
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Fridman v. Safeco Ins. Co. of Ill., Feb. 25, 2016, Florida Supreme Court
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