FLORIDA SUPREME COURT RULES IN FAVOR OF DOMNICK CUNNINGHAM & WHALEN CLIENT IN PRECEDENT-SETTING INSURANCE BAD FAITH DECISION
PALM BEACH GARDENS, Fla. (September 27, 2018) – The Florida Supreme Court issued a critical opinion last Thursday, September 20, 2018, overturning a 2017 ruling by the Fourth District Court of Appeal regarding the application of Florida bad faith law. In its 4-3 ruling in Suzanne Harvey, etc. v. Geico General Insurance Company, [SC17-85], the Court determined that the Fourth District Court of Appeal misapplied the Florida Supreme Court’s bad faith precedent and relied on inapplicable federal caselaw when it reversed a jury verdict which found Geico had acted in bad faith in failing to settle a claim brought against its insured. DCW Shareholders Fred A. Cunningham and Gregory M. Yaffa brought the bad faith action against Geico on Harvey’s behalf.
This opinion brings closure to a tragic car crash from August 2006 involving James Harvey (the insured) and John Potts. Mr. Potts was killed in the accident, leaving behind a wife and three children. Mr. Harvey had an insurance policy with Geico that provided him $100,000 in liability coverage. Due to the catastrophic nature of the crash, Mr. Harvey was certain to face financial exposure far beyond his policy limits if Geico did not settle the case and get him a release of the claim.
Shortly after the crash, the Potts estate, represented by Sean C. Domnick, now a DCW Shareholder, requested a statement from Mr. Harvey regarding the extent of his finances, whether he had additional insurance, and whether he was acting in the scope and course of his employment when the crash occurred. Geico, however, did not promptly inform Mr. Harvey of this request. While Geico tendered the policy limits within 9 days of the accident, Geico still failed to respond to Mr. Domnick’s request for a statement from Mr. Harvey regarding HIS finances and insurance. Additionally, Geico failed to communicate to Mr. Domnick that Mr. Harvey was open to cooperating in settlement talks.
Due to these failures in communication by Geico, the Potts estate returned the settlement check tendered by Geico and sued Mr. Harvey for wrongful death. A Palm Beach County jury returned a verdict for nearly $8.5 million in May of 2011. Mr. Harvey then sued Geico for bad faith and, represented by DCW Shareholders Fred A. Cunningham and Gregory M. Yaffa, won the jury verdict at issue here.
The Florida Supreme Court’s opinion in Harvey makes clear that an insurer’s obligations to its insured do not end by tendering the policy limits, but “continues through the claims duration process.” The opinion further 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. In reaching this erroneous conclusion, the Fourth District failed to properly apply the directed verdict standard and misapplied this Court’s precedent in Boston Old Colony and Berges, where we set forth the fiduciary duties of insurance companies toward their insurers. 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.”
DCW Shareholders Fred A. Cunningham, Gregory M. Yaffa, along with Philip M. Burlington, Bard D. Rockenbach, and Andrew A. Harris of Burlington & Rockenbach, P.A., and Kimberly L. Boldt and Mario Giommoni of Boldt Law Firm, P.A., appealed the case to the Florida Supreme Court. Mr. Cunningham said: “We thank the Florida Supreme Court for reaffirming long-standing Florida law, and stopping the erroneous application of federal caselaw in state court, bad faith litigation. The Court’s opinion affirms the rights of the insured and the duty of insurance companies to act in good faith, and also recognizes that the attorney for the injured party has a fiduciary duty to his or her client to try to protect the client. It is a great day for the Harvey family and for all Florida policyholders.”
Domnick Cunningham & Whalen is a national civil litigation firm based in Palm Beach Gardens, Fla. The firm specializes in complex litigation including catastrophic personal injury, medical malpractice, nursing home abuse, trucking, and bad faith litigation. For more information, visit www.dcwlaw.com or call 561-625-6260.