Florida Supreme Court Overturns Ruling on Insurance Bad Faith Decision

Recently, the Florida Supreme Court issued a critical opinion overturning a 2017 Fourth District Court of Appeal decision on Florida bad faith law.  In Harvey v. GEICO General Insurance Company, the Court held that the Fourth DCA misapplied precedent and relied on inapplicable federal caselaw in finding GEICO had not acted in bad faith in settling its insured’s claim, and reinstated a $9.2 million-dollar verdict against GEICO.

The case stemmed from a 2006 fatal car crash involving John Potts and GEICO’s insured, James Harvey.  Within days after the accident, counsel for Mr. Potts’ Estate requested a statement from Mr. Harvey regarding the extent of his finances, whether he had any additional insurance, and whether he was acting in the scope of his employment when the crash occurred.  Although GEICO did not promptly inform Mr. Harvey of this request, it did tender Mr. Harvey’s policy limits within nine (9) days of the accident.

Due to not receiving the requested statement from Mr. Harvey, and GEICO not engaging in other meaningful communications regarding settlement, counsel for the Estate returned the settlement check and sued Mr. Harvey for wrongful death.  In May 2011, a jury returned a verdict against Mr. Harvey for nearly $8.5 million.  Thereafter, GEICO was sued for bad faith, and that jury returned a verdict for $9.2 million against GEICO.  On appeal, the Fourth DCA reversed the bad faith verdict, finding that no bad faith had occurred.

Through its decision, the Harvey Court endorses the notion that an insurer’s obligations to its insured do not end by tendering the policy limits, but “continues through the claims duration process.”  The Court stated:

“we conclude that the Fourth District erred in holding that the evidence was insufficient to show that the insurer acted in bad faith in failing to settle the insured’s claim. . .   We also conclude that the Fourth District misapplied our precedent when it stated that an insurer cannot be liable for bad faith ‘where the insured’s own actions or inactions . . . at least in part’ caused the excess judgment.”

The Harvey decision demonstrates the ongoing plight facing insurers in Florida in regard to insurance bad faith law.  It is simply not enough to tender a settlement check to a claimant promptly; claimants have the right impose additional, reasonable requirements on any settlement, and a failure by the insurer to meet those requirements can clearly be deemed insurance bad faith.

Our team of insurance professionals in Florida are seasoned litigators in the field of insurance bad faith law.  Please feel free to contact us if we can be of assistance to you in any insurance bad faith case.

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