Opinion
Case No. 6:22-cv-1262-RBD-RMN
2023-10-13
Wayne L. COLELLO, Plaintiff, v. GEICO GENERAL INSURANCE COMPANY, Defendant.
Stephen A. Marino, Jr., Michael William Hoffman, Ver Ploeg & Marino, P.A., Orlando, FL, for Plaintiff. Megan Alexander, Jordan Marshall Thompson, Carlos G. Gomez, Michael Crampton, David Michael Angley, Young, Bill, Boles, Palmer, Duke & Thompson, P.A., Tampa, FL, for Defendant.
Stephen A. Marino, Jr., Michael William Hoffman, Ver Ploeg & Marino, P.A., Orlando, FL, for Plaintiff.
Megan Alexander, Jordan Marshall Thompson, Carlos G. Gomez, Michael Crampton, David Michael Angley, Young, Bill, Boles, Palmer, Duke & Thompson, P.A., Tampa, FL, for Defendant.
ORDER
ROY B. DALTON, JR., United States District Judge
Before the Court is Defendant GEICO General Insurance Company's ("GEICO") motion for summary judgment. (Doc. 55.) The motion is due to be granted.
BACKGROUND
On December 22, 2011, Plaintiff Wayne Colello and Jamal Erroudani were involved in a car accident. (Doc. 55-1.) GEICO insured Erroudani, providing for $10,000 in bodily injury coverage. (Doc. 1-1, p. 12.)
On December 30, Colello's attorney Ronnie Bitman sent a letter to GEICO stating that he determined Erroudani was at fault. (Doc. 55-3.) The next day, GEICO left a message for Erroudani, then sent him a letter advising him that the claim resulting from the accident may exceed the policy limit and that Erroudani could retain his own attorney. (Doc. 55-4; Doc. 56-1, pp. 3-5.) GEICO then assigned the claim to examiner Tyrone Collins. (Doc. 56-1, p. 11.)
Collins then called Erroudani, saying he intended to offer Colello the limits of the policy. (Id. at 16.) That same day, Collins sent Bitman a letter with a check for the $10,000 policy limits and a proposed release to settle the claim. (Doc. 55-5.) Collins stated that he was open to suggested changes to the release and included an affidavit from a claims manager certifying that Erroudani had no additional insurance. (Id.; Doc. 55-6.) Bitman returned the letter and check to Collins, stating that Colello could not accept the offer yet. (See Doc. 55-9; Doc. 56-1, p. 22.) Collins communicated this response to Erroudani. (Doc. 55-7.)
On February 21, Collins told Erroudani that Bitman requested a signed financial affidavit. (See Doc. 55-10.) On March 7, Collins again offered to settle; that same day, Erroudani signed Bitman's affidavit and swore he had no other insurance. (See Docs. 55-11, 55-12.) On March 19, Collins sent Bitman the signed affidavit. (See Docs. 55-12, 55-13.) On April 4, Collins once more offered to settle for the policy limits, again copying Erroudani. (Doc. 55-14.)
Then on April 10, Bitman turned Colello's matter over to another attorney, Franklyn Del Rio. (Doc. 55-15.) Collins updated Erroudani on this development. (Doc. 55-16.) For several months, Collins tried to contact Del Rio to discuss the claim but got no response, keeping Erroudani apprised. (Doc. 55-17; Doc. 55-18; Doc. 56-1, pp. 41-43.) Collins sent his last letter to Del Rio in September. (Doc. 56-1, p. 45.) In October, GEICO reassigned the claim from Collins to Katrina Gustin. (Id. at 46.) On October 10, Del Rio contacted GEICO for the first time. (Doc. 55-19.) He acknowledged receipt of GEICO's proposed release from Bitman's file and sent a letter demanding the policy limits as well as identifying several things he wanted changed in the release. (Id.) Del Rio: (1) wanted Erroudani to admit fault; (2) wanted an affidavit by Erroudani and his insurance agent swearing that Erroudani has no other insurance (even though GEICO had sent these to Colello's prior attorney); and (3) refused to hold Erroudani harmless, release anyone other than Erroudani, enter into a subrogation release, or agree to a dismissal with prejudice (though no complaint had yet been filed). (Id.) Del Rio demanded strict compliance within thirty days, stating that any countered, noncompliant release would serve as a rejection. (Id. at 2.)
Gustin discussed Del Rio's requests with her manager, who suggested that she ask Del Rio to redline the changes he wanted on the release. (Doc. 56-1, p. 50.) On October 26, thirteen days before Del Rio's thirty-day deadline, Gustin responded to the demand letter asking Del Rio to "make the additions or deletions on the release for [her] review or send a release that would be acceptable." (Doc. 55-20.) Gustin wrote that she had tried to contact Del Rio multiple times to clarify his proposed changes without success. (Id.) Gustin asked whether Del Rio had a proposed affidavit for Erroudani to admit fault. (Id.) And she resent the original release. (See Doc. 55-23.)
On November 2, a week from the deadline, Del Rio responded to Gustin and denied receiving her messages. (Doc. 55-22.) He asserted that his prior letter was clear as to Colello's terms. (Id.) On November 8, Gustin discussed Del Rio's response with Erroudani and noted that Del Rio "did not answer all the questions [Gustin] had." (Doc. 56-1, p. 54.) Then on November 12, a couple of days past the deadline, Gustin responded to Del Rio and again requested that he make any proposed changes to the release and send a proposed affidavit. (Doc. 55-23.) Gustin called Del Rio back on December 17 and January 2 without reaching him. (Doc. 56-1, pp. 54-55.) On January 16, Del Rio responded, asserting again that his prior instructions on what to include in the release were clear and stating that Colello was no longer willing to settle. (Doc. 55-24.) Gustin informed Erroudani that her efforts to settle the claim failed. (Doc. 55-25.)
So Colello sued Erroudani in state court and GEICO defended Erroudani. (Doc. 55-27, p. 2.) Colello and Erroudani then entered into a consent judgment for $1,200,000. (Doc. 1-1, p. 39.) Colello alleges that Erroudani assigned his bad faith claim against GEICO to Colello. (See id. at 6.)
This assignment is not in the record.
Colello now sues GEICO for bad faith. (Id. at 6-7.) GEICO moves for summary judgment. (Doc. 55; see Doc. 58.) The matter is ripe.
STANDARDS
Summary judgment is appropriate only "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Courts must view the evidence and all reasonable inferences drawn from the evidence in the light most favorable to the non-movant. Battle v. Bd. of Regents for Ga., 468 F.3d 755, 759 (11th Cir. 2006). Then the court must decide whether there is "sufficient disagreement to require submission
to a jury." Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1260 (11th Cir. 2004) (cleaned up).
ANALYSIS
GEICO argues that no reasonable jury could find that it acted in bad faith in handling Colello's claim against Erroudani. (Doc. 55, pp. 21-24.) The Court agrees.
Insurers owe a duty to their insureds to attempt to settle claims "in good faith and with due regard for the interests of the insured." Harvey v. GEICO Gen. Ins. Co., 259 So. 3d 1, 6 (Fla. 2018). In turn, a claimant "can sue the insurer directly for its bad-faith failure to settle on the insured's behalf." Eres v. Progressive Am. Ins. Co., 998 F.3d 1273, 1278 (11th Cir. 2021). The "critical inquiry" is "whether the insurer diligently, and with the same haste and precision as if it were in the insured's shoes, worked on the insured's behalf to avoid an excess judgment." Harvey, 259 So. 3d at 7. Whether an insurer acted in bad faith is determined by the totality of the circumstances—including what came both before and after the alleged bad-faith conduct—focusing on the actions of the insurer in fulfilling its obligations to the insured, not on the actions of the claimant. See id.; Eres, 998 F.3d at 1278. But while the focus of the inquiry is not on the claimant's actions, courts may consider them in the totality of the circumstances—including opposing counsel's lack of communication. See, e.g., Ellis v. GEICO Gen. Ins. Co., No. 21-12159, 2022 WL 454176, at *4 (11th Cir. Feb. 15, 2022). While not a "mere checklist," Harvey, 259 So. 3d at 7, insurers are at a minimum required to investigate the facts, warn the insured of a possible excess judgment and advise how to avoid one, keep the insured apprised of settlement opportunities, and settle where reasonable. See Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla. 1980). As the totality of the circumstances standard compels a fact-specific inquiry, summary judgment is rare in bad-faith cases. See Batchelor v. Geico Cas. Co., No. 11-cv-1071, 2014 WL 7224619, at *9 (M.D. Fla. Dec. 17, 2014) (Dalton, J.). But not impossible; the Eleventh Circuit has held that inviting opposing counsel to propose changes to a form release does not necessarily constitute bad faith. See, e.g., Pelaez v. Gov. Emps. Ins. Co., 13 F.4th 1243, 1252-53 (11th Cir. 2021); Robles v. GEICO Indem. Co., No. 20-14651, 2021 WL 4451971, at *4 (11th Cir. Sept. 29, 2021) (per curiam).
Here, viewing the totality of the circumstances, GEICO's conduct was not bad faith. GEICO did most everything one would expect of an insurer acting on behalf of its insured: (1) stayed in frequent communication with its insured and the claimant's lawyers; (2) warned its insured of the possibility of an excess judgment; (3) conducted a swift investigation of the accident; and (4) immediately tendered a check for the policy limits. (See Docs. 55-4, 55-5, 55-7, 55-11, 55-13, 55-14, 55-17, 55-20, 55-23, 55-25; Doc. 56-1, pp. 3-4; Doc. 56-23); Boston Old Colony, 386 So. 2d at 785. Nor does the back-and-forth about the release change this conclusion.
Consider the context: GEICO sent the claimant's counsel a form release and tried to communicate with him several times with no response for many months; then it received the new lawyer's letter demanding a host of changes without proposing acceptable language, on a tight deadline, with an admonition that strict compliance was required; and when GEICO sought clarification, the claimant's counsel abruptly ended negotiations. (See Doc. 55-5; Doc. 55-18, p. 2; Docs. 55-20, 55-22 to 55-24.) The Eleventh Circuit has twice recently addressed this very same practice of soliciting changes to a form general release in
the face of disobliging opposing counsel, and both times it affirmed that this practice was not bad faith. See, e.g., Pelaez, 13 F.4th at 1253; Robles, 2021 WL 4451971, at *4. As in Pelaez, here GEICO: (1) initially sent a proposed release and solicited changes; (2) on opposing counsel's rejection of the first offer, again invited changes to the release; (3) tried to contact opposing counsel multiple times; and (4) never received a counteroffer. (Docs. 55-5, 55-11, 55-13, 55-14, 55-17, 55-20, 55-23); see Pelaez, 13 F.4th at 1252. And like in Robles, here GEICO: (1) tried to maintain contact with opposing counsel despite his lack of engagement; and (2) kept the insured advised as to these attempts. (Docs. 55-17, 55-18, 55-20, 55-23, 55-25, 55-26); see Robles, 2021 WL 4451971, at *4. While GEICO's processes could be improved—indeed, it is a litigation magnet—identifying these procedural flaws does not elevate them to bad faith. See, e.g., Eres, 998 F.3d at 1281; Pelaez, 13 F.4th at 1253; Robles, 2021 WL 4451971, at *4.
Colello argues that Mark Cederberg's expert opinion (Docs. 58-4, 58-5)—which focuses on perceived flaws in GEICO's practices—creates an issue of fact precluding summary judgment. (See Doc. 58, p. 19.) But while courts should address the expert reports, an expert report by itself does not necessarily compel denial of summary judgment. Cf. Aldana v. Progressive Am. Ins. Co., 828 F. App'x 663, 671 (11th Cir. 2020) (holding that an expert report "combined with the facts recounted" precluded summary judgment). Cederberg's report is "replete with legal opinion" that would not help the jury, so it does not create an issue of fact precluding summary judgment, especially in the context of the many facts establishing that GEICO did not act in bad faith. Cf. Commodores Ent. Corp. v. McClary, 879 F.3d 1114, 1128-29 (11th Cir. 2018) (in a different context, addressing unhelpful expert opinion on legal issues).
And though the focus is on the insurer's conduct, the Court may consider how Del Rio's conduct impeded GEICO's settlement efforts as one of many factors in the totality of the circumstances. See, e.g., Pelaez, 13 F.4th at 1253; Robles, 2021 WL 4451971, at *4; Ellis, 2022 WL 454176, at *4. Del Rio had the opportunity to "draft a release to [his] own liking," yet refused to do so. See Robles, 2021 WL 4451971, at *4. This decision was, of course, tactical. See Pelaez, 13 F.4th at 1253 ("In this case GEICO not only offered to change any problematic language but to let [plaintiff's] attorney re-draft the release if he preferred. It would have been a simple thing for the attorney to do, but it is also the last thing he wanted to do."). As Del Rio made clear that anything but strict compliance with his demands would be a rejection, GEICO's request for clarification does not show bad faith under the circumstances. See Robles, 2021 WL 4451971, at *4.
Moreover, Del Rio's demand that Erroudani admit liability for the accident is a wrinkle unique to this case among bad faith authority, and one that further supports the finding that GEICO did not act in bad faith. GEICO was in no position to advise Erroudani as to whether under the circumstances it would be in his interest to admit in a signed document that he was liable for the accident. Only Erroudani could admit his liability, and only after being advised of potential consequences, possibly serious ones—especially absent independent counsel. (See Docs. 55-4, 55-16); cf. Eres, 998 F.3d at 1276 (finding no bad faith even when the insured had independent counsel to advise of the consequences). Erroudani's interests might not have been served by such an admission, however expedient, as it might have had collateral consequences. What if Erroudani had criminal issues arising from the accident that an admission of fault would adversely impact? What if the admission
implicated his employment, driving privileges, or other opportunities? Given the potentially consequential nature of Del Rio's demand, it is entirely appropriate under these circumstances for GEICO to have requested specific language from Del Rio for Erroudani to consider, as it is in the best interest of the insured to know that an admission of fault will not expose him to unrelated liabilities. See Robles, 2021 WL 4451971, at *4 ("[I]t is difficult to see how [the adjuster] put [the insurer's] interests before the insured's interest. ...").
In sum, while Colello is right that the Eleventh Circuit narrowly permits summary judgment on this issue (Doc. 58, p. 8), this case falls within that narrow exception, in line with the Eleventh Circuit's prior rulings in Eres, Pelaez, and Robles. An insurer's duties are to its insured, not to the claimant. And it fulfilled those duties by immediately tendering the policy limits, acting expediently, keeping its insured in the loop, and behaving reasonably in the face of difficult opposing counsel. Even on Colello's best facts, GEICO did not elevate its own interest over that of its insured by seeking a reasonable clarification of the demand and requesting proposed release language from Colello's counsel, particularly when the demand included an insistence on confession of fault. Considering the totality of these circumstances, no reasonable jury could find that GEICO acted in bad faith toward Erroudani, so summary judgment is warranted in favor of GEICO.
CONCLUSION
Accordingly, it is ORDERED AND ADJUDGED:
1. GEICO's summary judgment motion (Doc. 55) is GRANTED.
2. The Clerk is DIRECTED to enter judgment for Defendant and against Plaintiff, terminate all other pending motions as moot and cancel upcoming deadlines and hearings, and close the file.
DONE AND ORDERED in Chambers in Orlando, Florida, on October 13, 2023.