The U.S. Court of Appeals for the Eleventh Circuit has revived a $2.7million bad faith claim against Geico for failingto settle an insurance dispute after determining a lowercourt applied the wrong statute of limitations.

|

Plaintiffs attorney Kerry McGuinn Jr. welcomed the ruling andsaid it should finally resolve an issue which has cropped upbefore, particularly in federal court: Whether Florida’s statute oflimitations for bringing such claims is four years — as Geico hadargued — or five years, which the appellate paneldecreed.

|

Related: 9th Circuit reduces $2.5M bad failth award againstGeico to $1M

|

“It’s something that’s come up before, and we’ve gotten ordersat the local level with judges saying it’s five years, but therewas some dicta in the federal system saying it’s four years,” hesaid.

|

“To me, it’s a pretty straightforward opinion, and it’s prettyclear that the statute of limitations was five years,” said McGuinnof Tampa’s Rywant, Alvarez, Jones, Russo & Guyton, whorepresents the plaintiff with firm partner Michael Rywant.

|

Geico’s attorneys, B. Richard Young, Megan Alexander, JordanThompson and David Angley of Tampa’s Young, Bill, Boles,Palmer & Duke did not immediately respond to requests forcomment.

Insured auto accident


The underlying case involved a 2009 accident in which a car drivenby Waldemar Baranowski lost control and wrecked. Passenger JiriRenotier was thrown from the vehicle and seriously injured.

|

Renotier and his wife sued Baranowski in Florida’s TwentiethJudicial Circuit.

|

Baronowsky carried a Geico policy with $10,000 per person and$20,000 per occurrence in coverage.

|

Geico was notified of the suit but refused to settle for itspolicy limits. Following a 2012 trial, the jury awarded more thanthan $2.6 million in damages. The final judgment entered in June2012 added more than $88,000 in litigation costs.

|

In February 2017, Baranowski filed abad-faith complaint against Geico in U.S. District Courtfor Florida’s Middle District, claiming the insurer “knewor should have known that the injuries sustained by Jiri Renotirewere of such a serious nature that, if the case were not settled,it would result in a verdict and verdict … far in excess” ofGeico’s policy limits.

Geico argued for 4-year statute of limitations


Geico filed a motion to dismiss, arguing the complaint wasfiled seven months after the four-year statute of limitations forbad faith claims elapsed.

|

In April, Senior Judge James Whittemore sided with theinsurer, ruling the bad-faith claim “arises from Geico’salleged breach of its fiduciary duty,” which in Florida isconsidered an “intentional tort subject to a four-year statute oflimitations.”

|

In an unpublished Jan. 9 per curiam order issued by EleventhCircuit Judges Gerald Tjoflat, William Pryor Jr. and Kevin Newsom,the panel disagreed with Whittemore’s interpretation.

|

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

|

“Baranowski’s complaint of bad faith was an action arising outof a contract instead of an action in tort,” it said.

|

Although most states treat bad faith claims as a tort or acombination tort and contract claim, the opinion said Florida has afive-year statute of limitations for a legal or equitable action ona contract.

|

“The five-year limitation period applies to a complaint againstan insurer for failing in bad faith to settle an insurance claim,”the judges ruled.

|

“Because Baranowski’s complaint was timely, the district courterred by dismissing his action as barred by the statute oflimitation,” it said.

|

Greg Land is an ALM Media reporter. He can bereached at [email protected]. OnTwitter: @GregLand1

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Greg Land

Greg Land covers topics including verdicts and settlements and insurance-related litigation for the Daily Report in Atlanta.