Auto insurance companies have an obligation to act reasonably in paying legitimate claims in a timely manner. When they do not, the courts may find they have acted in “bad faith.”
For the policy holder (or other injured party), a finding of bad faith can result in compensation that far exceeds the original policy amount. Both the courts and the legislature have authorized these severe sanctions as a means to compel insurers to act in good faith. But inevitably, examples of insurers acting in bad faith persist.
Recently, in GEICO v. Paton, Florida’s Fourth District Court of Appeal held the policy holder was not required to prove damages twice in two separate trials relating to the same injury – once in the underinsured motorist trial and the second in the bad faith trial. Rather, the court held, the jury’s finding of excess damages in the first trial would be sufficient proof of damages in the subsequent bad faith insurance action.
As our Coral Springs car accident attorneys understand it, the court found the insurer’s assertion that damages should be twice-proven by the plaintiff to be “such bad policy that we do not glean even a hint of its existence in any case the Supreme Court has decided in this area.”
According to court records, plaintiff was a passenger in a vehicle struck by an underinsured motorist, who was covered for the minimum amount of $10,000. The at-fault driver’s insurer promptly paid that amount in full. This, however, did not cover all damages incurred as a result of the crash.
Plaintiff’s mother had an uninsured/underinsured motorist coverage policy with defendant insurer which covered plaintiff too in this case. The policy limit on that was $100,000. The insurer offered the plaintiff a settlement of just $1,000. At one point, the insurer offered $5,000, but never any more. It never even responded to plaintiff’s counter-offer (made against her lawyer’s advice) of $22,500.
Thus, the case went to trial. A jury decided in plaintiff’s favor, awarding her the full policy limit of $100, plus an excess verdict of $369,250 for damages. The trial court later curtailed the excess verdict amount to the policy limit, citing the Eighth Amendment.
The insurer did not appeal that judgment, and paid the $100,000.
Subsequently, plaintiff filed a bad faith insurance lawsuit against defendant. Prior to trial, plaintiff sought to allow the excess $370,000 verdict reached by the previous jury, plus prejudgment interest, to be what she could recover under her bad faith claim. Insurer sought to exclude all evidence from the underinsured motorist trial, and require plaintiff to prove damages anew in the bad faith trial. The court sided with the plaintiff and denied the insurer’s motions.
A jury again found in the plaintiff’s favor, awarding her the $370,000 excess verdict.
Insurer appealed, arguing the finding of damages at the first trial should not have been taken as conclusive evidence in the second.
The 4th DCA disagreed, ruling the damage findings at the first trial were sufficient. Further, the insurer’s argument was weak based on state law and legal precedent, but also because the insurer failed to appeal the first verdict.
When you’re fighting for rightful auto insurance coverage, it’s imperative you have an experienced lawyer on your side.
Freeman Injury Law — 1-800-561-7777 for a free appointment to discuss your rights.
GEICO v. Paton, Sept. 17, 2014, Florida’s Fourth District Court of Appeal
More Blog Entries:
Floyd-Tunnell v. Shelter Mut. Ins. Co. – Multiple UM Policies and Partial Exclusions, Aug. 25, 2014, Coral Springs Car Accident Lawyer Blog