Oh ye of bad faith

FLORIDA LAW WEEKLY

VOLUME 48, NUMBER 9

CASES FROM THE WEEK OF MARCH 3, 2023

INSURANCE COMPANY WAIVED ANY ARGUMENT ABOUT THE INSURED’S NON-COMPLIANCE WITH THE STATUTE BECAUSE IT FAILED TO RAISE OBJECTIONS IN RESPONSE TO THE CIVIL REMEDY NOTICE–TRIAL COURT ERRED IN ENTERING SUMMARY JUDGMENT FOR THE INSURER ON THAT BASIS.

Neal v. GEICO, 48 Fla. L. Weekly D423 (Fla. 4^th DCA Fed. 22, 2023):

The case arose from the plaintiff insured’s claim that her car was stolen.  Plaintiff reported her car stolen to the police, but at the time of her report did not have proof that she was the true owner of the car.  The police discovered the title had been transferred the day before it had been reported stolen. 

Eventually the new owner was located, and the new owner advised the police that he bought the car from the insured.  Ultimately, it was determined that the car was, in fact, stolen. 

Despite that conclusion, GEICO refused to consider the car stolen.  Plaintiff sued for breach of contract accusing GEICO of a wrongful denial of coverage for her stolen car.  In the CRN, plaintiff accused GEICO of bad faith for its refusal to cover the theft of the car, and for not properly investigating the claim and denying the claim without all the facts. 

GEICO responded by stating it had not acted in bad faith, asserting instead that it had investigated the claim.

Ultimately, GEICO settled the breach of contract litigation with the insured paying $20,000.00 for the vehicle loss.  A month later the plaintiff sued for extra contractual damages based on bad faith. 

GEICO moved for summary judgment contending that the CRN was legally inadequate.  Plaintiff responded that GEICO waived its ability to complain about the inadequacies because it failed to object to the CRN in its response. 

The Fourth District found that not only had GEICO never raised a claim that the CRN was deficient until a year and a half into the litigation (after discovery had begun and the trial had been set), but when plaintiff initially served the CRN on GEICO, it rebuffed her contending there was no evidence that the car was stolen. 

This caused the Fourth District to conclude that GEICO waived its right to complain about any supposed deficiencies in the CRN (to which the plaintiff agreed) and remanded for a trial on the merits. 

COURT OVERTURNS AWARD OF ATTORNEY’S FEES THE COURT AWARDED BECAUSE OF $10.55 NOT PAID IN POSTAGE AND A LATE PAYMENT FEE

United Automobile Insurance Co. v. Family Rehab, Inc., 48 Fla. L. Weekly D407 (Fla. 3^rd DCA Fed. 22, 2023):

The trial court awarded a PIP assignee $4,700.00 in attorney’s fees.  Although United Auto had paid PIP benefits in response to the demand, it did not initially pay the statutory late payment penalty and postage which totaled $10.55.  The issue before the court was whether the plaintiff was entitled to attorney’s fees solely due to the outstanding charges for the late fee and postage. 

In a prior Fourth District case, the court held that there is no entitlement to attorney’s fees when the insurer pays all the PIP benefits timely, but fails to pay the late fee penalty or postage.  The court declined the opportunity to reject the Fourth District precedent, following it and reversing the award of fees.

TRIAL COURT ERRED IN DENYING MOTION TO VACATE DEFAULT JUDGMENT, WHERE RECORD SHOWED THAT DEFENDANT ACTED WITH DUE DILIGENCE IN PURSUING MOTION TO VACATE UPON DISCOVERING THE COURT PAPERS WERE MISHANDLED

Clear 2 Close Title, LLC v. Zap, Inc., 48 Fla. L. Weekly D407 (Fla. 3^rd DCA Fed. 22, 2023).

A CAUSE OF ACTION FOR LEGAL MALPRACTICE MUST ASSERT THAT DAMAGES WERE INCURRED DUE TO NEGLIGENCE –- ONE COUNT THAT DID PROPERLY PLEAD DAMAGES FLOWING FROM NEGLIGENCE, SURVIVED THE MOTION TO DISMISS

Murphy v. Pankauski, 48 Fla. L. Weekly D420 (Fla. 4^th DCA Fed. 22, 2023): 

Plaintiff sued his prior attorneys for six counts of legal malpractice. 

The Fourth District affirmed the dismissal of the first four counts, finding that the allegations of negligence did not specify how the alleged negligence caused compensable harm to the plaintiff.  In other words, the complaint did not state what the defendant lawyers may have done wrong, and did not illuminate any of the specifics of the malpractice.

The count for unjust enrichment was also dismissed.  A claim for unjust enrichment cannot exist where payment has been made for the benefit conferred. 

Here, while the plaintiff asserted that the attorneys received payment after withdrawing from the case, the complaint did not state whether they were unjustly enriched by the late payment, or whether the received fees were earned or unearned.

The complaint noted that the charges were incurred to obtain any orders permitting withdrawal and to allow the plaintiff to get a copy of his files.  Without any allegations to the contrary or supporting exhibits attached to the pleading, there was no cause of action for unjust enrichment stated. 

The court did find error in the dismissal of one of the six counts where plaintiff asserted that his lawyers filed a defective motion to enjoin a sale of trust property that caused him to suffer damages of at least $500,000.00. 

Unlike the other counts, this count did plead definitive damages that were the proximate result of the defendant lawyer’s work.  The Fourth District reversed the dismissal on the one count, and affirmed the dismissal of the others.

THE ABSENCE OF THE REQUIRED FINDINGS UNDER ROWE IDENTIFYING COUNSEL’S REASONABLE HOURLY RATE AND THE NUMBER OF HOURS REASONABLY EXPENDED, RENDERS AN ORDER GRANTING ATTORNEY’S FEES ERRONEOUS ON ITS FACE. 

Guerin v. Countryside North Community Ass’n, 48 Fla. L. Weekly D440 (Fla. 2^nd DCA Fed. 24, 2023).