United States: Eleventh Circuit Holds No Reasonable Jury Could Find That Insurer Acted In Bad Faith Despite Deficient Statutory Insurance Disclosure

The U.S. Eleventh Circuit Court of Appeals, applying Florida law, recently held that no reasonable jury could find that an insurer's failure to include an insured's statement about additional insurance in its statutory insurance disclosure pursuant to Fla. Stat. §627.4137 rose to the level of bad faith. Kwiatkowski v. Allstate Ins. Co., 2017 WL 5900553 (11th Cir. Nov. 30, 2017).

A pedestrian was struck by the insured's automobile. The insured's insurer unsuccessfully offered policy limits to the claimant. After the claimant retained an attorney, the insurer reiterated its previous offer. Several months later, the claimant's attorney advised the insurer that the claimant was willing to settle within the policy limits and requested that the insurer provide an insurance disclosure pursuant to Fla. Stat. §627.4137. The insurer timely responded, but the claimant rejected the offer because the insurer's response was deficient as it did not provide a statement from the insured or its agent regarding additional insurance as required by Fla. Stat. §627.4137. The claimant sued the insured and obtained an excess judgment and then sued the insurer for bad faith, alleging that the insurer failed to settle. The insurer removed the action and moved for summary judgment. The court granted the insurer's motion for summary judgment, concluding that no reasonable jury could find that the insurer acted in bad faith. The insured appealed.

The Eleventh Circuit affirmed. Although the Eleventh Circuit agreed that the insurer's insurance disclosure response was deficient in that it did not include a statement by the insured or the insured's agent—information the insurer had in its possession at the time—it concluded that no reasonable jury could conclude that this omission was anything other than simple negligence that does not rise to the level of bad faith. The Eleventh Circuit reasoned that, as a whole, the insurer's efforts to settle the claim were prompt, consistent and reasonably diligent.

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