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UIM Bad Faith Case Stumbles On Permanency Threshold Requirement

While uninsured/ underinsured motorist benefits are essential for any driver, these benefits have some limitations that you should understand. Specifically, F.S. 627.727(7) limits UM/UIM coverage only to economic damages caused by car accident injuries. By this statute, legal liability of a UM/UIM insurer specifically by this statute does NOT include damages for pain and suffering, mental anguish or inconvenience UNLESS the injury is described as:

  • Significant/ permanent scarring/ disfigurement;
  • Permanent injury within a reasonable degree of medical probability;
  • Significant/permanent loss of important bodily functions;
  • Death.gavel

A recent bad faith insurance claim asked whether a UM/UIM insurance provider wrongly failed to settle a lawsuit with an insured for the $75,000 policy limits when it could have and should have done so. In order to answer this question, it was essential to determine whether plaintiff had proven she had suffered a permanent injury within the meaning of the state’s “permanency threshold” statute. 

According to court records, plaintiff was injured in a motor vehicle accident on I-95 in July 2007 when she was rear-ended by a driver who carried a $25,000 bodily injury liability insurance policy.

After the crash, plaintiff sought treatment for neck pain. Her primary care doctor first prescribed three weeks of physical therapy, but that didn’t help. Then she underwent an MRI of her cervical spine and consulted with a neurologist. Over the next year, she underwent nearly a dozen nerve blocks. However, none of this was effective in managing her pain.

Plaintiff in Cadle v. GEICO Gen’l Ins. Co., had suffered a pre-existing injury to her neck that had necessitated surgery in 1989, during which she had a metal plate installed. She had been doing well with that until the accident.

Following an evaluation of plaintiff’s medical records, her insurer offered to settle her UIM claim for $500. Her injury lawyer responded with a demand for the $75,000 limit. Insurer countered with an offer of $1,000. At that time, insurer noted there was not final evaluation that indicated the permanency of her injuries.

In September 2008, plaintiff filed her first Civil Remedy Notice, as required by Florida Statutes § 624.155. That notice indicated she was still receiving treatment and weighing surgical intervention and that her bills at that point were in excess of $50,000 and increasing.

Defense responded with requests to see plaintiff’s medical records from the 1989 surgery. It never increased its offer for settlement, but again noted its request for a final evaluation report that would indicate permanency of plaintiff’s injury.

Plaintiff underwent surgery in 2010 to replace the old metal plate in her neck with a new, larger one that would help stabilize her neck.

She later filed a lawsuit and by the time the case went to trial in March 2013, none of her doctors had assigned her a permanency rating, though she hadn’t yet reached maximum medical improvement.

Jurors decided the case in favor of plaintiff and awarded her $900,000, which was reduced to $817,000 for various offsets.

Plaintiff then filed a lawsuit for bad faith insurance, arguing insurer could and should have settled the case, but did not. Although jurors decided the case in her favor, the judge granted defense motion for a judgment notwithstanding verdict, finding plaintiff had not proven the permanency of her injuries, and therefore hadn’t proven that the insurance company owed her the policy limits before she filed her claim.

The Eleventh Circuit affirmed. The court noted that despite repeated opportunities, plaintiff failed to provide evidence of permanent injury, except to note at one point the surgical intervention, which in and of itself isn’t notice of a permanent injury.

Call Freeman Injury Law — 1-800-561-7777 for a free appointment to discuss your rights. Now serving Orlando, West Palm Beach, Port St. Lucie and Fort Lauderdale.

Additional Resources:

Cadle v. GEICO Gen’l Ins. Co., Sept. 30, 2016, U.S. Court of Appeals for the Eleventh Circuit

More Blog Entries:

Family of Grandmother Killed in DUI Accident Seek Justice, Oct. 17, 2016, West Palm Beach Car Accident Lawyer Blog

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