THE WEEK IN TORTS

Download PDF Here

Court Rewards Insurer for Its Bad Faith

FLORIDA LAW WEEKLY

VOLUME 39, NUMBER 34

CASES FROM THE WEEK OF AUGUST 22, 2014

ONCE INSURER CONFESSES JUDGMENT FOR POLICY LIMITS, TRIAL COURT LACKS JURISDICTION TO TAKE ANY ACTION OTHER THAN TO ENTER JUDGMENT IN THE AMOUNT OF THE UM POLICY LIMITS IN FAVOR OF THE INSURED – – TRIAL COURT DEPARTED FROM THE ESSENTIAL REQUIREMENTS OF LAW BY ALLOWING INSURED TO AMEND COMPLAINT TO ADD COUNT FOR DECLARATORY JUDGMENT TO DETERMINE APPORTIONMENT OF LIABILITY AND TOTAL AMOUNT OF DAMAGES – – INSURED NOT PRECLUDED FROM LITIGATING DAMAGES ON ISSUE OF BAD FAITH CLAIM WHICH IS SEPARATE AND DISTINCT FROM THE JUDGMENT ENTERED, BASED ON THE INSURED’S CONTRACTUAL OBLIGATION UNDER THE POLICY

Geico v. Barber, 39 Fla. L. Weekly D1727 (Fla. 5th DCA August 15, 2014):

Plaintiff sued Geico for UM benefits and filed a civil remedy notice. After learning that plaintiff underwent surgery, several years later, Geico finally served a policy limits proposal for settlement, which the insured did not accept. Geico then filed a Notice of Confession of Judgment and Motion for Entry of Confessed Judgment, stating that it confessed judgment in the amount of its $10,000 policy limits.

Before the trial court ruled on Geico’s motion to enter judgment, the plaintiff filed a motion to amend his complaint to assert separate claims for UM benefits and bad faith. Plaintiff also filed a declaratory judgment count to determine liability and the total amount of damages he sustained in the accident.

The court granted Geico’s motion to enter judgment, but also granted plaintiff’s motion to amend the pleadings to add a count for declaratory relief finding that the plaintiff’s request to add a bad faith claim was not ripe. As a result, the plaintiff filed a Second Amended Complaint seeking only a declaratory judgment to determine the apportionment of liability and the total amount of damages.

Geico argued that the trial court’s order departed from the essential requirements of law, and that after it confessed judgment the trial court lacked jurisdiction to take any action other than enter judgment in the amount of the UM policy limits.

Relying on the case of Safeco v. Fridman, decided in 2013 (but the supreme court accepted review of it in April of this year), the court explained that when the insurance company agreed to the entry of judgment against it in the amount of its policy limits, the issue as framed by the pleadings became moot because the trial court could not provide any further substantive relief. Thus, it was error for the trial court to require the parties to proceed to trial.

Although the court only had jurisdiction to enter the confessed judgment, the plaintiff–as the Fifth District noted–was not precluded from litigating the damages issue on its bad faith claim as the judgment entered in this case based on Geico’s contractual obligations was separate and distinct from the claim for bad faith. As a practical matter, however, it is unclear to me (and the dissenting judge also), about how the plaintiff is expected to litigate the damages issue for the bad faith claim.

As Judge Sawaya explained in his dissent, the holdings of the majority in this case and in Fridman do not comport with how the Florida Supreme Court and the legislature have said bad faith actions should be handled. §627.727(10) specifically provides that the damages recoverable in an action against the UM carrier include the total amount of the claimant’s damages including those which exceed the policy limits.

The determination of the amount in excess of the policy limits is established by the jury verdict in the original UM case, and thus, this court’s ruling creates tension with how bad faith is established.

Judge Sawaya also said that he believed the majority and the Fridman courts misapplied the confession of judgment issue, which is generally the functional equivalent of a judgment for the purposes of awarding attorney’s fees under §627.428. The confession of judgment doctrine is intended to penalize the insurer for causing its insured to resort to litigation when it should have previously paid benefits under the policy.

The dissenting judge also stated it did not believe that the UM and bad faith statutes were intended to allow insurers to treat their insureds in the manner that they were in this case and Fridman, observing that the injured parties in both cases had spent several years litigating the damage issues in the UM cases each filed, only to have the insurers tender the policy limits and eliminate their right to continue on with the litigation so the jury could determine the full extent of their damages. The result seems a bit ludicrous.

Because the UM statute is intended to protect injured people, and not intended to benefit insurance companies or motorists who cause damages to other people, and because the bad faith statute is intended to protect insureds from insurers who act in bad faith in handling claims made under the pertinent insurance policy, an injured insured has the right to have a jury determine the full extent of his or her damages in the UM case, so that the insured may pursue a bad faith action.

My guess is the Florida Supreme Court will ultimately take on the “ridiculousness” of these rulings in keeping with the opinion expressed by Judge Sawaya.

SUA SPONTE ORDER REQUIRING FORMER COUNSEL TO ALLOW SUCCESSOR COUNSEL TO INSPECT AND COPY DOCUMENTS IN CLIENT FILE OVER WHICH FORMER COUNSEL HAD ASSERTED A RETAINING LIEN, AMOUNTED TO A DEPARTURE FROM THE ESSENTIAL REQUIREMENTS OF LAW

Heims v. GMS Marine Service Corp., 39 Fla. L. Weekly D1700 (Fla. 4th DCA August 13, 2014):

An attorney and his firm petitioned for certiorari review of a sua sponte order requiring them to allow successor counsel to inspect and copy documents in the firm’s file. The lawyer and firm had asserted a retaining lien over the file, and refused to provide records until the client paid its bill.

The court agreed with the attorneys that requiring disclosure of their file would render the retaining lien meaningless. It also noted that this was not one of those rare cases which warranted disclosure of the attorney’s file without payment of the attorney’s fee or security.

The order departed from the essential requirements of law, and would cause material harm that could not be remedied on appeal because the value of the retaining lien would be lost, and the attorneys are not parties to the underlying action.

TRIAL COURT LACKED JURISDICTION TO HEAR PENDING MOTION FOR §57.105 FEES WHERE THE MOTION WAS FILED AFTER THE CASE HAD BEEN VOLUNTARILY DISMISSED

Pomeranz & Landsman Corp. v. Miami Marlins, 39 Fla. L. Weekly D1704 (Fla. 4thDCA August 13, 2014):

Generally a voluntary dismissal under Rule 1.420(a)(1) terminates a trial court’s jurisdiction over a matter. A trial court has continuing jurisdiction to consider §57.105 motion for sanctions only where the motion for sanctions was filed with the court before the voluntary dismissal.

In this case, the respondent served its motion for sanctions after the 21-day safe harbor period, but did not file the motion with the court upon expiration of the 21-day safe harbor provision. Several months later, the case was voluntarily dismissed.

Because this dismissal ended the trial court’s jurisdiction, the court granted the petition for writ of prohibition ordering that the trial court was without subject matter jurisdiction to consider the motion.

TRIAL COURT ERRED IN DISMISSING WRONGFUL DEATH COMPLAINT UPON FINDING THAT COMPLAINT AGAINST TOBACCO COMPANIES COULD NOT BE AMENDED AFTER INITIAL PLAINTIFF DIED DURING PENDENCY OF ACTION – – WRONGFUL DEATH CLAIM IS NOT REQUIRED TO BE BROUGHT AS A NEW AND SEPARATE CAUSE OF ACTION WHEN THE PLAINTIFF DIES DURING PENDENCY OF A PERSONAL INJURY ACTION AND THE STATUTE OF LIMITATIONS DID NOT BAR THE ABILITY TO AMEND THE COMPLAINT TO ADD THE WRONGFUL DEATH COUNT BECAUSE THE AMENDMENT RELATED BACK

Roden v. R.J. Reynolds, 39 Fla. L. Weekly D1706 (Fla. 4th DCA August 13, 2014):

The case brings up the issue of whether a personal injury complaint can be amended upon the death of an injured party plaintiff, to add a wrongful death claim. Recently, the Supreme Court rejected the idea that personal injury claim is extinguished upon the death of the plaintiff. Thus, the court found that the wrongful death claim will relate back to the filing of the original complaint, and is not time-barred.

FACT THAT TRIAL COURT ENTERED SUMMARY JUDGMENT FOR DEFENDANT POLICE OFFICER ON THE BASIS THAT SHE WAS ENTITLED TO QUALIFIED IMMUNITY DOES NOT NECESSARILY MEAN THAT THE PLAINTIFF’S CLAIMS LACK FACTUAL SUPPORT – – NO ABUSE OF DISCRETION IN DENYING THE MOTION FOR ATTORNEY’S FEES PURSUANT TO §57.105

Phillips v. Garcia, 39 Fla. L. Weekly D1712 (Fla. 3rd DCA August 13, 2014).

THERE IS NO BRIGHT LINE RULE THAT A JUROR WHO HAS HAD PERSONAL EXPERIENCE RELATING TO THE CASE MUST NECESSARILY BE STRICKEN FOR CAUSE

Gonzalez v. State, 39 Fla. L. Weekly D1717 (Fla. 3rd DCA August 13, 2014):

In this criminal case for lewd and lascivious molestation of a child, one of the jurors stated in voir dire that she had been molested as a child, but had maintained throughout questioning that she could be fair and impartial. Because the juror never actually expressed bias or prejudice against the defendant, and candidly informed the trial court that she had been a victim of molestation herself but maintained throughout the questioning she could be fair and impartial, it was not an abuse of discretion for the trial court to deny the defendant’s motion to strike the juror for cause.

TRIAL COURT ERRED IN OVERRULING DEFENDANT’S OBJECTION TO STATE’S PEREMTORY STRIKE OF AFRICAN-AMERICAN VENIREPERSON WITHOUT DETERMINING THE GENUINENESS OF THE STATE’S RACE-NEUTRAL REASON FOR THE STRIKE – – HOWEVER WHERE THE JURY WAS SWORN ONLY MINUTES AFTER THE INITIAL OBJECTION TO PEREMPTORY STRIKE, IT WAS NOT NECESSARY TO RENEW THE OBJECTION IN ORDER TO PRESERVE THE ISSUE FOR APPEAL

It is always necessary when a party challenges a prospective juror who is in a protected class, that if the opposing party objects, the trial court must seek a race-neutral reason from the party making the strike, and then determine the genuineness of that reason.

This case is also helpful about answering the extent of what one needs to do to preserve an objection. Here the court found it was not necessary to renew the objection when the jury was sworn only minutes after the initial objection to the strike (generally, one must object before panel is sworn). Of course that does not give clear cut direct guidance in how long is too long to save an argument for preservation, but it does provide some authority in the event one finds him or herself in such a predicament on appeal.