The Eleventh Circuit Court of Appeals recently released two opinions involving multiple liability claims against an insured with insufficient policy limits.  Both cases involved appeals from summary judgment orders in bad faith cases granted in favor of the insurance company.  In Montanez v. Liberty Mutual Fire Ins. Co., 824 Fed.Appx. 905 (11th Cir. 2020), the appellate court affirmed the summary judgment order, but in Aldana v. Progressive American Ins. Co., No.19-12950, 2020 WL 5843711 (11th Cir., Oct. 1, 2020), the court reversed the order.  

In Montanez, which was decided in August, the insured caused an automobile accident involving two other cars, which resulted in the death of the Plaintiff's infant daughter and injured four other individuals to the extent that they were all hospitalized.  Within three days of the accident, Liberty Mutual's claims representative informed the potentially insured driver that it would be in his best interest to retain counsel and initiated a coverage investigation, as he was not listed as an additional driver on the policy.  Six days post-accident, the adjuster learned that Plaintiff retained legal counsel and called the attorney's office.  She was told that she would need to call back later.  Four more calls were made to counsel's office by the adjuster over the following several weeks, but none were returned.  In the interim, the adjuster investigated the claims of the occupants of the other car, and learned through Plaintiff's PIP carrier that Plaintiff and another occupant of her vehicle had serious injuries, which included a fractured pelvis and hip, and a head injury. 

Thirty-three days post-accident, without benefit of medical bills or records for any of the four injured claimants, the Liberty Mutual adjuster sent a letter to counsel for all claimants stating that it was making its full policy limits of $250,000.00 per person / $500,000.00 per accident available and would be arranging a settlement conference to assist with reaching an apportioned settlement.  The following day, counsel for Plaintiff called the adjuster and informed her of his representation.   Almost four weeks later, Plaintiff's counsel sent his first correspondence to Liberty Mutual rejecting any offer to settle, stating that it should have immediately tendered its $250,000 per person limit as to the wrongful death claim rather than attempting to resolve all of the claims.  There was no prior communication from Plaintiff's counsel offering to settle the wrongful death claim for that amount.  The same letter also demanded $125,000 each for Plaintiff's injuries as well as those of another occupant of her vehicle.  Six days later, Liberty Mutual accepted Plaintiff's offer and issued two $125,000 checks to resolve the injury claims of Plaintiff and another occupant of her vehicle.  Liberty Mutual also offered the remaining $250,000 in policy limits to resolve the wrongful death claim, later forwarding a corresponding check to Plaintiff's counsel. 

Both the trial and appellate courts disagreed, finding the global settlement strategy consistent with Florida law, citing Farinas v. Fla. Farm Bureau Gen. Ins. Co., 850 So. 2d 555 (Fla. 4th DCA 2003) (requiring insurance carriers to minimize the exposure to its insured using reasoned claim settlement).  On appeal, the Eleventh Circuit court noted that upon notification of the accident, the defendant immediately opened a claim file and began an investigation; determined through its own research that there were multiple victims not disclosed by the insured and that there were five total claimants; diligently investigated the claims of the occupants of the second vehicle, obtaining updates regarding the extent of their injuries and their medical care; worked to do the same for plaintiff and was able to obtain limited information from her Personal Injury Protection carrier; identified plaintiff's counsel and repeatedly initiated contact, all to no avail.  The appellate court also noted that "given counsel's radio silence, Defendant lacked any knowledge as to whether Plaintiff would be willing to settle the wrongful death claim for $250,000."  Notably, the appellate court pointed out that the district court perceived improper motives in Plaintiff's counsel's lack of communication, stating that "the Court cannot ignore Plaintiff's counsel's hand in manufacturing the delay Plaintiff now complains about," asserting that "[t]he court will not tolerate the use of bad faith claims as a sword for claimants in insurance litigation."  Importantly, the appellate court, citing Berges v. Infinity Ins. Co., 896 So. 2d 665, 677 (Fla. 2004), recognized that the perceived desire of Plaintiff's counsel to manufacture delay is not,on its own, a ground for deciding whether the insurer acted in bad faith ("[t]he focus in a bad faith case is not on the actions of the claimant, but rather on those of the insurer in fulfilling its obligations to the insured."   The appellate court noted that regardless of whether Plaintiff's counsel acted in good faith or bad faith, the fact remains that given counsel's unresponsiveness, Defendant lacked pertinent claims information from Plaintiff as well as any insight into whether Plaintiff would have settled for $250,000.  

Two months later, the Eleventh Circuit was faced with a similar argument in Aldana.  In that case, the Progressive insured carried a $250,000.00/$500,000.00 liability policy, and got into a serious car accident causing catastrophic injuries to the Plaintiff and her four minor children.  A sixth claimant in another vehicle suffered "soft tissue" injuries.  Twelve days after the accident, Progressive offered the full $500,000.00 liability limits globally to all six claimants.  The Plaintiff's attorney responded to Progressive, advising that the family's damages "exceeded multiple millions of dollars" and that the youngest child had suffered brain damage and would likely not walk again.  He advised that it was virtually impossible to apportion the policy limits at the time because the children would need guardians ad litem and that the insured would need to complete a financial affidavit.  Progressive agreed to postpone the settlement conference, and over the next six months sent monthly identical letters to the Plaintiff's attorney asking if his clients were "now in a position to discuss settlement."  Plaintiff's attorney's only response was after the first follow-up letter, wherein he advised that his clients were continuing to receive treatment and that the $500,000 policy limit was "only a drop in the bucket."  Also during that six month period, Progressive attempted, but was unable, to obtain a financial affidavit from the insured.  Two months later, the Plaintiff retained a new attorney, who filed suit against the insured.  The litigation resulted in a judgment in excess of $50 million. 

In the bad faith case, the Plaintiff argued that Progressive should have tendered the $500,000.00 policy limit to her and her children only, or in the alternative, offered the $250,000.00 per person limit to the brain-damaged minor child.  The trial court disagreed, finding that no jury could find that Progressive acted in bad faith because the global settlement strategy was consistent with Florida law, and that no duty existed to choose one claim, or group of claims, to attempt to settle first.  It thus entered summary judgment in favor of Progressive. 

On appeal, the Eleventh Circuit found that there was sufficient evidence for a jury to conclude that Progressive acted in bad faith.  The court first noted that "no reasonable jury could conclude that Progressive's initial decision to offer the full $500,000.00 bodily injury policy limits to try to globally settle all claims against [the insured] was unreasonable or in bad faith," citing to Farinas.  However, the court took issue with the six to eight month period after the attempt at global settlement.  The court cited to Harvey v. Geico Gen. Ins. Co., 259 So. 3d 1 (Fla. 2018), finding that the issue is "whether the insurer diligently, and with the same haste and precision as if it were in the insured's shoes, worked on the insured's behalf to avoid an excess judgment."  The court found that the Plaintiff's claims constituted, to quote Harvey, a "ticking financial time bomb" and that once it became clear that the global settlement strategy was not working, Progressive should have attempted to settle only the Plaintiff's claims, or to offer the per-person limit to the most seriously injured of the Plaintiff's children. 

Both Montanez and Aldana involve multiple claimant cases where the claimants asserted that the insurer should have made offers to the most seriously injured of the claimants (or group of claimants), rather than pursuing a global settlement strategy.  While both courts acknowledged that the global settlement strategy is appropriate under Farinas, the Aldana court went a step further, applying the "haste and precision" standard of Harvey to require the insurer to do something more.  Perhaps the only way to factually distinguish the cases is that in Montanez the claimant's attorney was completely non-responsive and filed suit after four or five weeks, while in Aldana the claimant's attorney's minimal responses continued to point out the plight of his clients and the insufficiency of the policy limits.  Until Aldana, no court had held that a carrier in multiple claimants situation had to choose the most serious claim and attempt to settle it first, and the global settlement approach was universally regarded as the standard for handling these types of claims.  Whether this constitutes a shift in Florida jurisprudence will depend upon whether Aldana is cited in the future, and whether the Florida state courts, including the Florida Supreme Court, eventually rule on the issue.

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