It is not uncommon for insurance companies to offer low payments or deny legitimate claims to customers. In Fridman v. Safeco Ins. Co. of Ill., Florida’s highest court recently decided that an auto insurance company could not file a last minute reversal of a denial to avoid a bad faith insurance claim. The issue in the case was whether the insured individual was eligible for a liability determination and the full extent of damages in an uninsured/underinsured motorist (UM) claim prior to being forced to file a bad faith claim.
Here, the insurance company denied the plaintiff’s claims for four years. The plaintiff then filed a Civil Remedy Notice (CRN), alleging violations of Fla. Stat. 624.155(1)(b)(1) for “failure to pay UM policy limits of $50,000 in a clear liability crash with over $12,000.00 of property damage to insured’s vehicle” and in excess of $24,000 of medical expenses and significant injuries that needed future medical attention.
When the insurance company failed to respond in a timely manner, the plaintiff went ahead and filed the lawsuit. The insurance company failed to answer. The plaintiff then offered to settle for the amount of the policy limits of $50,000 – but there was still no answer. Shortly before trial, the insurance company tendered a check for $50,000 and filed “a confession of judgment.”
The plaintiff opposed the entry of a confessed judgment, saying that a jury verdict would determine the insurance company’s potential liability in a future bad claim. The trial court agreed with the plaintiff and denied the insurance company’s motion.
At trial, the jury concluded that the underinsured driver was at fault for the accident, and thus entirely responsible for the plaintiff’s damages. The jury found the damages to be in the amount of $1,000,000. The insurance company appealed.
The appellate court reversed the lower court’s decision holding that that the lawsuit became moot after the insurance company tendered the check and “confessed judgment” for $50,000. The plaintiff appealed to the Florida Supreme Court.
The Florida Supreme Court quashed the appellate court’s ruling, explaining that the lawsuit was not moot and the plaintiff was free to pursue the bad faith claim. The court reasoned that the damages in bad faith actions shall include any amount in excess of the policy limits. Thus, the plaintiff was not obligated to take the policy limit amount. Additionally, the filing of the CRN is a prerequisite to filing a bad faith claim. It gives the insurance company 60 days to cure its alleged violation. If the insurance company fails to respond within this time frame, bad faith is presumed.
If you’ve been injured in an accident, our skilled Miami injury lawyers can help. At the Law Offices of Robert Dixon, we have the skill, knowledge, and determination to handle your case. Dealing with insurance companies can be extremely complicated and having the right attorney on your side can make all the difference if your case. To learn more, call us at 1-877-499-HURT (4878), or contact us online today.
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