Court Rejects Bad Faith Claim Against Insurance Company in Fatal Car Crash – Novoa v. Geico

Sometimes getting an insurance company to make payment after a car accident is as difficult as determining who is to blame for the crash. In Novoa v. Geico, the U.S. District Court for the Southern District of Florida explains insurers’ responsibility to bargain in good faith.

Jose Ordonez was killed in a car accident in Florida on November 10, 2007. Ordonez had stopped the car he was driving to aid a stranded motorist on the side of the road when a car driven by Christopher Meldon slammed into the stranded vehicle. Ordonez’s car was also damaged in the accident.

The accident was reported to Geico, with whom Meldon had an insurance policy covering $10,000 for bodily injury and $10,000 for property damage, on the day it occurred. The company sent a check for $10,000 to Ordonez’s wife – Vivian Novoa – 17 days later. Claims examiner Lisa DePoy explained in the accompanying letter that the money represented the limit of Meldon’s bodily injury coverage. She also requested that Novoa send her insurance information to Geico so that it could evaluate her claim for property damage.

The letter also included a release agreement, which the company asked Novoa to sign. Although the document indicated that Novoa would be releasing all claims against Geico stemming from the accident, the company stated in court filings that the release was intended to cover only the bodily injury potion of her claims.

Instead of depositing the check and signing the release, Novoa responded to Geico by demanding payment of $3,100 to cover the damage to Ordonez’s car on Dec. 12, 2007. She hired a lawyer a month later and sued Meldon for wrongful death and Geico for PIP death benefits. She later settled the claim against Geico. Before receiving a copy of the complaint, Geico countered Novoa’s property damage demand by offering nearly $1,500. The company explained that the stranded motorist also filed a claim for property damage. Because the combined claims exceeded the $10,000 coverage limit, the company offered Novoa a pro-rated amount.

Novoa rejected Geico’s offers for payment under the bodily injury and property damage coverage and returned the company’s $10,000 check. Her wrongful death claim proceeded to trial and a jury awarded her more than $16,000 in damages from Meldon. Novoa then sued Geico for bad faith, seeking to recover the full amount of the damages award directly from the insurance company.

The district court granted summary judgment in favor of Geico, finding that the company had not failed to negotiate in bad faith. “In Florida, insurers must refrain from acting solely on the basis of their own interests in settlement,” the court explained. The rule is intended to ensure that insurers don’t handle cases in a way that minimizes the insurer’s exposure at the expense of the insured. In the event of a breach of the duty, the insurer may be liable to the insured for the full amount of any judgment against him.

In this case however, the court found that Geico did not breach its duty to Meldon because the company acted quickly in investigating the claim and offered Novoa the full amount of the bodily injury coverage within 17 days of the accident. Novoa testified that she rejected the offer because she also wanted the $3,100 payment for property damage. However, the company acted reasonably in calculating the amount it could pay and making an offer to Novoa without consulting Meldon, according to the court.

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.

Related blog posts:

Insurance Issues in Florida Car Accident Lawsuits – Goheagan v. American Vehicle Insurance Company

Court Allows Bad Faith Claim Against Car Insurance Company to Go Forward on Failure to Investigate – King v. Geico

Causation In Florida Car Accident Litigation – Durse v. Henn