The Eleventh Circuit Court of Appeals has affirmed a more than $8.2million judgment against Nationwide Insurance ina contentious and closely-watched traffic fatalitycase.

Defense attorneys had characterized the case as a prime exampleof "set-up" cases in which lawyers use time-limited demands to ginup bad faith claims against insurers. But the appeals courtrejected that claim and left Nationwide on the hook for a juryaward of more than $5.8 million plus interest that — as of lastAugust — totaled more than $2.4 million.

The Georgia Chamber of Commerce last year filed anamicus brief on Nationwide's behalf terming the case anexample of a "recent epidemic of bad-faith litigation inGeorgia."

Upheld jury verdict

The case revolves around the use of so-called Holt demands, namedfor the 1992 Georgia Supreme Court decision in SouthernGeneral Ins. Co. v. Holt, 416 S.E. 2d 274. That opinion uphelda jury verdict that an insurer had demonstrated bad faith when itfailed to timely respond to a policy limit request on behalf of awoman injured in a car wreck, even though medical records showedher bills far exceeded the policy limits.

Plaintiffs attorneys routinely file Holt demands as part ofinitial claims settlement negotiations.

The Nationwide case began with a 2005 accident in whichNationwide's insured, Seung Park, would plead guilty to vehicularhomicide for the death of Stacey Camacho.

Decatur attorney Charles McAleer, who represented the woman'swidower, Jesus Camacho, sent Nationwide a time-limited, 10-daydemand for Park's $100,000 policy limit. In exchange, they offereda limited liability release shielding Park from any personalliability for any other claims, with the exception of any otherinsurance coverage that might be available to Camacho's family.

Nationwide rejected the offer 13 days later, saying it wouldonly pay if the family supplied a general release under which theywould have to repay the insurer if any other claims were maderelated to medical liens.

No agreement was reached, and after a 2009 trial, a FultonCounty jury awarded Camacho and his widow's estate $5.85 million.Park assigned to Camacho his right to sue Nationwide for negligenceand bad faith for failing to settle the claims.

Acted negligently and in bad faith

Camacho sued Nationwide in federal court in Georgia's NorthernDistrict and, following a trial in which a jury determined that theinsurer had acted negligently and in bad faith, Judge Amy Totenbergordered the insurer to pay more than $8.1 million in damages.

Related: Massachusetts top court limits bad faith awardsagainst insurers

Totenberg also said she would award the plaintiffas-yet-undetermined attorney fees because Nationwide turned down a2011 offer to settle the case for $4.5 million. Under Georgia'soffer of judgment statute, a party that declines a settlement offerand then loses at trial by at least 25 percent more than therejected offer can be ordered to pay the other party's attorneyfees accrued from the date of the offer.

Nationwide appealed, arguing in court filings that although Parkcaused Camacho's damages, his lawyer had "set up" Nationwide for abad faith claim by wrangling over the release's term in an effortto create a "gotcha moment" under the Holt decision.

Related: Allstate loses bid to overturn $14M insurance badfaith verdict

Nationwide also challenged the plaintiffs' position that the badfaith claim was a tort and that the jury award accuratelyrepresented its damages, arguing that the case was really a breachof contract dispute.

'Thorough and well-reasoned final order'

On Friday, in a two-paragraph, unpublished opinion, EleventhCircuit Judges Julie Carnes, Susan Black and, sitting bydesignation, Southern District of Florida Judge Kathleen Williamsaffirmed Totenberg's "thorough and well-reasoned final order."

There was no immediate reply to requests for comment fromNationwide's attorneys, Alston & Bird partners Michael Kenny,Tiffany Powers and Andrew Tuck, and Robert Darroch, StephanieGlickauf and Tyler Walker of Goodman McGuffey.

Camacho was represented in the federal suit and appeal bySlappey & Sadd partners Jay Sadd and Rich Dolder and DarrellHinson of Swope Rodante.

There was no immediate reply to requests for comment fromNationwide's attorneys.

In an email, Sadd said the appellate ruling "recognizes that thetrial court worked diligently on its 67-page order to get it right.Nationwide's problem all along in this case is that the demand wasvery reasonable."

The insurer, he said, "should have accepted the demand for alimited liability release" instead of insisting on a generalrelease "without proper regard [as] to whether their policyholderwould be protected by rejecting the offer."

Noting that Totenberg had paraphrased the Rolling Stones' "YouCan't Always Get What You Want" in her opinion, Sadd paraphrasedher paraphrase.

'You get what you need'

"It bears repeating in this case: You can't always get thesettlement terms you want. You get what you need — even if you area powerful insurance company," he said.

Related: How Geico managed to overturn a $30M insurance badfaith award — for now

Bryan Cave partner William Custer, who authored the Chamber ofCommerce's amicus brief, said there would likely be more skirmishesaround the issue.

"We are, of course, disappointed that the panel did not reachthe issues that we raised in our amicus brief," said Custer viaemail. "Nonetheless, given the current prevalence of these cases,there will be other opportunities for courts to do so in thefuture."

Greg Land is a reporter for the Daily Reporter, an ALMMedia property. He can be reached at [email protected].