There are unfortunately too many cases where a person is injured in an auto accident and the negligent driver lacks sufficient insurance to pay for the damages. To protect against such a contingency, you can purchase uninsured motorist (UM) coverage as part of your own auto insurance policy. In fact, Florida law requires insurers to offer UM coverage, although customers are not required to buy it.
Earlier Judgment Binding in Subsequent “Bad Faith” Lawsuit
Even with UM coverage, however, there may be cases where your insurance company plays hardball and refuses to settle a legitimate claim. If that happens, you may have a separate claim for “bad faith” against your insurer. Florida law allows such claims provided the insured person gives the insurer at least 60 days’ notice.
The Florida Supreme Court recently addressed one aspect of UM coverage and bad faith claims which had been a source of some confusion among lower courts and trial lawyers. Specifically, the Court rejected a procedural tactic used by some insurance companies to drag out litigation to the detriment of accident victims with legitimate claims.
The plaintiff in this case was injured in a car accident in 2007. The other driver was underinsured. The plaintiff had $50,000 in UM coverage from his own insurer. But even after the plaintiff gave the required 60-day notice, his insurer refused to settle for the full $50,000, instead offering just $5,000. The plaintiff noted that amount would not have even covered his past medical bills.
In 2009, the plaintiff named the insurer as a defendant in a lawsuit against the uninsured driver. The purpose of this lawsuit was to establish the full extent of the uninsured driver’s liability. The plaintiff also gave the insurer another opportunity to settle for the $50,000 policy limit, but once again he received no response.
It was not until early 2011—four years after the accident and a month before trial—that the insurer finally offered to pay the $50,000. The plaintiff said no, but the insurer’s tactic successfully delayed the trial for another six months. The plaintiff rejected a second $50,000 settlement offer, in part because a jury verdict could establish the insurer’s “potential liability under a future bad faith claim.”
The jury ultimately ruled the uninsured driver was 100 percent liable for the accident and calculated the full value of the plaintiff’s damages at $1 million. The judge ordered the insurer to immediately pay the $50,000 policy limit. The judge also “reserved jurisdiction” to decide any future bad faith claim against the insurer, which could leave the company on the hook for the rest of the $1 million.
The insurer appealed, arguing the trial judge should have allowed it to pay the $50,000 limit before trial, thereby “mooting” the plaintiff’s right to a jury determination of the total damages. In effect, the insurer said the plaintiff should have made its bad faith claim at the same time as his uninsured motorist claim, and having chosen not to do so, he should now be forced to re-litigate the entire case if he wants to pursue the bad faith issue.
The Florida Supreme Court decided this made no sense. In a 5-2 decision, the Court said the insurer’s delay tactics in this case should not be rewarded. The insurer’s “confessing judgment on the eve of trial” was designed to avoid a jury calculation of the plaintiff’s total damages—a figure that is “binding” in any subsequent bad faith action the plaintiff brings against the insurer. Forcing the plaintiff to re-litigate this issue would be “unduly and unnecessarily burdensome to him,” the Court said.
Get Legal Help Following a Car Accident
As this case illustrates, car accident litigation is often a lengthy, complex process that can take years to resolve. That is why it is important you work with an experienced Clearwater personal injury lawyer who understands the legal system and can effectively represent your interests. Contact the Law Office of Paul B. Genet, P.A., at (727) 538-8865 if you need to speak with someone about your case today.