In August, GEICO gave Ms. Cousin's the $10,000 for her broken leg suffered in the accident. A week later Ms. Cousin's attorney sent a letter to GEICO stating that the other driver was underinsured with respect to the bodily injury liability coverage, and demanded the $100,000 available under the Cousin's underinsured motorists policy. The same communication included a Civil Remedy Notice of Insurer Violations (CRN) alleging that GEICO had acted in bad faith by failing to offer anything in settlement of the uninsured motorists claim, despite her serious injuries. The attorney included a copy of the demand letter that had previously been sent, and depicted the injuries.

Several times over the next two months, GEICO asked Ms. Cousin for documentation including medical records, bills, and proof of lost wages. At the beginning of October, Ms. Cousin provided GEICO with an update including one medical bill but failed to provide the rest of the requested documentation.

At the end of the sixty-day CRN period, GEICO replied, saying that based on the lack of quantifiable damages, and the fact that they had already paid out $10,000, they could offer Ms. Cousin an additional $5,135 to resolve the claim. In the same document, GEICO asked for the MRI films of Ms. Cousin's lumbar so they could conduct their own independent medical evaluation, as is their right under the auto policy in place.

Soon after, Cousin provided almost $12,000 in medical bills and evidence of $2,000 in lost wages. That same day the Cousin's attorney filed another CRN, again asserting bad faith. This time the assertion was bad faith for failing to make a timely, and reasonable offer to settle the claim "despite being presented with documentation supporting a very serious set of injuries" and Ms. Cousin suffered "undue additional financial loss and additional pain and suffering and emotional distress" as a result of GEICO's failure to pay.

GEICO scheduled the IME for November 2. The IME was rescheduled because it had never been cleared on the Cousin's attorney's schedule. He offered to reschedule the exam for a date that was convenient for all parties involved, and attached a copy of the requested personal injury protection logs that showed that Ms. Cousin had received an additional $10,000 from GEICO under her PIP.

On November 5, the parties agreed to schedule the IME for November 9.

November 6 the attorney contacted GEICO stating that on November 4 Ms. Cousin underwent a discectomy and ablation, and would be medically unable to submit to an IME for at least 3 weeks. Along with notice of the IME cancellation, a surgeon's bill for $27,340 and a pre-operative exam bill for $375 were attached. The attorney informed GEICO that the out-of-pocket expenses would likely total more than $60,000. The communication indicated that they had filed a lawsuit in state court and would serve GEICO if they did not provide the full $100,000 policy limits by November 11.

On November 11, GEICO contacted Ms. Cousin to outline every effort they had taken to resolve the claim, including repeated attempts to gather documentation, schedule an IME. GEICO stated a belief that the cost of the surgery was "excessive and not reasonable" and that the pricing should be reviewed. In this letter, GEICO increased their settlement amount to $14,104.

The next day Ms. Cousin's attorney responded with a letter confidently stating that a jury would side with Ms. Cousin, and unfortunately they would have to pursue litigation and let a jury decide what Ms. Cousin's injuries were worth. That letter included a report from Cousin's doctor stating his belief that she had sustained a permanent lumbar injury as a result of the accident, the first hard evidence linking the car accident to a permanent injury. The lawyer re-emphasized his belief that Ms. Cousin should be compensated by the full amount of the uninsured motorists policy, and gave GEICO until 2 pm of that very day, November 12. He also warned GEICO that all offers to settle would be withdrawn if that 2pm deadline passed without payment.

On December 11, the end of the second sixty-day CRN period, GEICO sent a letter stating that the parties had differing opinions based on the value of the case, and since the suit had already been filed, GEICO's staff counsel would handle the remainder of the case.

In the state court bad faith action, the jury awarded Cousin $1,305,000, which was reduced to $100,000 due to the policy limits still in place. In an attempt to recover the remainder of the jury verdict, Cousin filed a lawsuit in the U.S. District Court for the Middle District of Ohio. That court granted GEICO summary judgment, so Cousin appealed contending that there were disputed facts, that if the jury had relied upon they would be able to determine that GEICO acted in bad faith.

Editor's Note: Here the Eleventh Circuit found that the ruling of summary judgment was improper. The reasonableness of the billing for the operation was discussed at length, and the Court determined that the reasonableness and adequacy of the settlement offer are relevant factors to consider when attempting to determine bad faith. Since a dispute about GEICO's the adequacy of the second settlement offer and the reasonableness of the billing for the surgery.