In Tanaka v. Geico, the U.S. District Court for the Middle District of Florida takes on the case of a car accident victim who claimed the responsible driver’s insurance company shirked its duty to try to settle her claims.
Ms. Tanaka was allegedly injured in a January 2009 car accident in Brevard County when the vehicle she was driving was rear-ended by a car driven by Ms. Wardlow. Although she didn’t appear injured at the time, Tanaka said she later began to experience pain and immobility in her shoulder. Tanaka’s attorney sent a letter to Geico, with whom Wardlow had an auto insurance policy, demanding the policy limit of $10,000 and stating that Tanaka would require additional medical attention for her injury in the future. In a second letter, the attorney said Tanaka was scheduled to undergo surgery to treat her shoulder injury.
Geico responded by offering to pay Tanaka about $2,000 and asking for additional information about the planned surgery. The court said it was unclear whether the parties continued to negotiate. Tanaka later sued Wardlow and a jury returned a verdict for more than $56,000 in her favor. Tanaka and Wardlow entered an agreement releasing Wardlow from any liability in excess of her $10,000 policy limit. In return, Wardlow assigned to Tanaka her right to bring a bad faith claim against Geico. Tanaka then sued Geico for bad faith and breach of contract.
Denying the insurance company’s motion for summary judgment on the bad faith claim, the court said Tanaka raised a triable claim which should be considered by a jury. “It is well settled under Florida law that an insurer owes an insured a good faith duty to settle, if possible, where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so,” the court explained. A third party can sue for breach of this duty and may recover any money awarded to the third party in a separate case against the insured driver that is in excess of the person’s policy limit (here: $10,000).
The court rejected Geico’s claim that Tanaka couldn’t raise a bad faith claim against it because the judgment against Wardlow was already satisfied as a result of the agreement releasing her from additional liability. The Court said the “intent of the parties controls interpretations of their releases,” citing a 2008 Florida Supreme Court decision. Here, the court said Tanaka and Wardlow clearly intended not to extinguish the right to any bad faith claim against Geico, according to the court.
Nevertheless, the court granted summary judgment to Geico on Tanaka’s breach of contract claim. The court said Geico acted within the bounds of its insurance coverage agreement with Wardlow by seeking to settle the matter and honoring its duty to indemnify her up to the $10,000 policy limit. While Tanaka could maintain a bad faith claim alleging that the company failed to actually settle the matter, the court said there was no requirement for the company to do so under the express terms of the contract.
The best way to deal with an insurance bad faith claim in Florida is to avoid it altogether. The South Florida insurance attorneys at Anidjar & Levine, have vast experience representing clients in car accident cases and insurance disputes throughout the area, including in Ft. Lauderdale, Pompano Beach and Hialeah. Call us at 800-747-3733 for a free consultation.
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