Damages Determined by Jury Are Binding on the Insurance Company
November 17, 2014
The insured filed a bad faith claim against the insurer based on the insurer's attempt to require the insured to again prove her damages even after the jury had determined that point. This case is GEICO General Ins. Co. v. Paton, No. 4D12–4606,.2014 WL 4626860 (Fla. App. 4th Sept. 17, 2014).
Paton was a passenger in a car and was injured in a crash due to the negligence of the underinsured driver. The driver's insurer, GEICO, paid Paton the $10,000 policy limit. Paton's mother maintained uninsured/underinsured (UM/UIM) coverage with GEICO with $100,000 of coverage. Paton's attorney demanded the $100,000 policy limit from GEICO, but the insurer declined to pay that amount. GEICO offered $1,000 although GEICO's expert reviewed Paton's MRI that showed she had two lumbar herniations.
The dispute ended up in a trial, and the jury returned a verdict in Paton's favor and awarded her $469,247 in total damages. The judge limited the award to the $100,000 policy limit, and GEICO paid the final judgment.
Paton then filed a claim of bad faith against GEICO, and the trial court ruled in her favor. GEICO appealed.
GEICO argued that the trial court erred by treating the verdict from the UM trial as conclusive evidence of Paton's damages in the bad faith trial. The District Court of Appeal of Florida, Fourth District, did not agree. The court noted that the legislature, by statute, firmly established that the damages in a first-party bad faith case include the total amount of the plaintiff's damages that were caused by the original third-party tortfeasor, even an amount in excess of policy limits. Moreover, case law reiterated the fact that the initial action for first-party benefits that sets the plaintiff's damages arising from an accident determines the extent of the plaintiff's damages in a first-party bad faith case. Thus, said the court, the initial action between the insurer and the insured fixes the amount of damages in a first-party bad faith action.
The court also noted that forcing retrial of a plaintiff's damages at a first-party bad faith trial as GEICO urges is such a bad policy that the court could not find even a hint of its existence in any case law. The court found that GEICO fully participated in the first trial with an opportunity to challenge Paton's evidence and a powerful motive to suppress the amount of damages. When it comes to a jury's factual determination of damages, the court went on, Florida's policy is not to give multiple bites at the same apple absent some legal infirmity in the first trial.
The court found no reversible error and affirmed the trial court's ruling.
Editor's Note: In this case, the insurer was fighting state law and its own negligence in not challenging the results from the first UM/UIM trial. The jury in that trial determined the plaintiff's damages based on the factual evidence presented to it, and GEICO had to accept that determination after failing to challenge it at that time.