Opinion
CASE NO. 19-80606-CIV-SMITH
2021-06-22
Sandra DAVIS, Plaintiff, v. NATIONWIDE INSURANCE COMPANY OF AMERICA, Defendant.
Todd Stephen Stewart, The Law Offices of Todd S. Stewart, PA, Jupiter, FL, for Plaintiff. Karl Edward Sturge, Marlow Adler Abrams Newman & Lewis, Coral Gables, FL, for Defendant.
Todd Stephen Stewart, The Law Offices of Todd S. Stewart, PA, Jupiter, FL, for Plaintiff.
Karl Edward Sturge, Marlow Adler Abrams Newman & Lewis, Coral Gables, FL, for Defendant.
ORDER DENYING MOTIONS FOR SUMMARY JUDGMENT
RODNEY SMITH, UNITED STATES DISTRICT JUDGE
This matter is before the Court on Defendant's Motion for Summary Judgment [DE 55], Plaintiff's Response in Opposition [DE 59], and Defendant's Reply [DE 64]. Also before the Court are Plaintiff's Motion for Summary Judgment [DE 56], Defendant's Response in Opposition [DE 61], and Plaintiff's Reply [DE 63]. For the reasons that follow, the parties’ Motions for Summary Judgment are DENIED.
I. BACKGROUND FACTS
The Court omits record citations to the facts that that parties have not disputed.
Plaintiff, Sandra Davis, brings this action against Defendant, Nationwide Insurance Company of America, alleging Defendant acted in bad faith when handling an insurance claim against Plaintiff arising from a September 4, 2011 automobile accident. Plaintiff alleges that Defendant's bad faith resulted in entry of a final judgment against Plaintiff in excess of the insurance policy's limits.
A. The September 4, 2011 Accident
On September 4, 2011, at approximately 5:30 a.m., Jessica Muro ("Muro") was involved in an automobile accident with DaWayne McDonald ("McDonald"), a permissive driver of a 2006 Mercury Mountaineer owned by Plaintiff. Plaintiff is the named insured on the policy of insurance issued by Defendant, policy number 6139C446966 [DE 58-2] (the "Policy"). The Policy carries bodily injury limits of $25,000 per person/$50,000 per accident. The Policy was in effect at the time of the accident involving Muro and McDonald.
B. Medical Treatment Sought by Muro After the Accident
On September 9, 2011, Muro sought medical treatment at the MDM Chiropractic Center. (See DE 58-6 at 127-30.) Muro returned to the MDM Chiropractic Center for two follow-up visits on September 14, 2011 and September 26, 2011. (Id. ) Prior to the automobile accident on September 4, 2011, Muro had undergone breast augmentation surgery. (See DE 58-6 at 14.) After the September 4, 2011 car accident, Muro sought medical evaluation because of pain and apparent deformity in her right breast. (DE 58-6 at 1, 11, 14.) On September 15, 2011, Muro saw Dr. Dov Eidelman, a plastic surgeon, at Plastic Surgery of Palm Beach. On September 19, 2011, Muro saw another plastic surgeon, Dr. Fredric Barr. Dr. Barr ordered a preliminary mammogram and MRI of Muro's breasts to assess the status of the implants. The mammogram ordered by Dr. Barr was performed on September 19, 2011 at Midtown Imaging. (DE 58-6 at 48.) Dr. Kirk Banerian performed the mammogram and provided a report stating, in part, that there are "no significant abnormalities evident." (Id. ) On September 27, 2011, Muro underwent a second MRI of her breasts at Midtown Imaging. (DE 58-6 at 81.) The MRI studies were read by Dr. Feliple Espinoza. (Id. ) Dr. Espinoza's report indicated that both "implants are intact." (Id. ) On September 30, 2011, Muro underwent bilateral breast surgery (DE 59-6 at 11.) Dr. Barr's records describe the procedure performed as "[o]perative exploration bilateral breasts with removal of previous implants as well as open capsulectomy, right lateral capsulorrhaphy, and implant exchange with 492 cc, smooth walled, moderate profile, Allergan, silicone implants." (Id. ) The record states further that the procedure is "exploratory with implant exchange, open capsulectomy, and placement of silicone implants" and that "[Muro] understands that these are cosmetic procedures at this time for exploration and implant exchange." (DE 58-6 at 12.) Defendant received copies of these medical records on October 25, 2011 when Muro's legal counsel, William Zoeller, Esq., enclosed them with a demand letter sent to Defendant. (DE 58-6 at 1.)
C. Defendant's Activity in Attempting to Resolve Muro's Claim against Plaintiff
On September 12, 2011, Michael Pittman ("Pittman") sent a letter to Muro's legal counsel introducing himself as the claims associate handling the claim and requesting various documents, including financial records, medical records, and medical and wage authorizations. (DE 58-4.) On September 20, 2011, Pittman sent a letter to Muro's legal counsel with an enclosed copy of the insurance policy and declarations page. (DE 58-5.) On September 20, 2011, Pittman received and reviewed the police report for the September 4, 2011 automobile accident. Pittman determined that liability was 100% adverse to Plaintiff. On October 25, 2011, Muro's legal counsel sent a letter to Pittman demanding that the $25,000 policy limit be tendered within twenty-five days. (DE 58-6.) The letter included a copy of the police report, medical records from Dr. Barr, the diagnostic studies performed at Midtown Imaging, and the chiropractic records from MDM Chiropractic Center. (Id. ) The letter also stated that Muro's injuries included, without limitation, "Mastodynia Malposition of the Right Breast Implant and rupture and Deflation of Right Breast Implant ending in a Right Breast Surgery. Neck, Right Shoulder and Lower Back Pain." (Id. ) The letter also stated that "[Muro] went to surgery just days after the accident; she is also receiving chiropractic and orthopedic treatment because her injuries are significant." (DE 58-6 at 2.)
On October 31, 2011, Pittman sent a letter to Plaintiff with an enclosed copy of the October 25, 2011 letter from Muro's legal counsel. (DE 58-7.) The letter stated, in part, that:
If a verdict is rendered in excess of your policy limits, you will be personally responsible for the excess amount. Because of that possibility, it may be advisable for you to consult an attorney of your own choice about these matters. This attorney will advise you of your legal rights and the possible steps to take to avoid an excess judgment. If you should choose to consult an attorney, the expense of such consultation would also be your responsibility.
(DE 58-7.) On November 18, 2011, Pittman sent a letter to Muro's legal counsel rejecting Muro's demand for the $25,000 policy limit and instead offering $2,000 to settle Muro's claim. (DE 58-8.) The letter also requested disclosure of additional documents related to the claim and included enclosed medical and wage authorization forms. (Id. ) On December 2, 2011, Muro's legal counsel sent a letter to Defendant. (DE 58-9.) The letter conveyed purported conversations held between Dr. Barr and Muro's legal counsel about Muro's September 30, 2011 surgery. (Id. ) The letter concluded by stating that the car accident on September 4, 2011 caused the need for the September 30, 2011 exploratory surgery and caused the scar tissue in Muro's right breast to tear. (Id. ) Muro's legal counsel then requested Defendant tender the full $25,000 policy limit within ten days. (Id. ) On December 7, 2011, Pittman sent a letter, nearly identical to the letter sent on October 31, 2011, to Plaintiff with an enclosed copy of the December 2, 2011 letter from Muro's legal counsel. (DE 58-10.) On that same day, Pittman sent a letter to Muro's legal counsel, advising him that Defendant would not agree to Muro's demand for $25,000. (DE 58-11.) Instead, Defendant offered Muro $2,000 to settle her claim. (Id. )
D. Judgment Entered Against Plaintiff Exceeds Policy Limits
On December 2, 2011, Muro filed a lawsuit in the Fifteenth Judicial Circuit in and for Palm Beach County, Florida against Plaintiff and McDonald. (DE 58-12.) On July 14, 2015, a verdict was rendered and final judgment entered in favor of Muro and against Plaintiff and McDonald in the amount of $550,000, excluding costs and attorney's fees. (DE 58-13.)
II. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate when "the pleadings ... show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Anderson v. Liberty Lobby Inc. , 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; HCA Health Servs. of Ga., Inc. v. Employers Health Ins. Co. , 240 F.3d 982, 991 (11th Cir. 2001). Once the moving party demonstrates the absence of a genuine issue of material fact, the non-moving party must "come forward with ‘specific facts showing that there is a genuine issue for trial.’ " Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed. R. Civ. P. 56(e) ). The Court must view the record and all factual inferences therefrom in the light most favorable to the non-moving party and decide whether " ‘the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’ " Allen v. Tyson Foods, Inc. , 121 F.3d 642, 646 (11th Cir. 1997) (quoting Anderson , 477 U.S. at 251-52, 106 S.Ct. 2505 ). In opposing a motion for summary judgment, the non-moving party may not rely solely on the pleadings, but must show by affidavits, depositions, answers to interrogatories, and admissions that specific facts exist demonstrating a genuine issue for trial. See Fed. R. Civ. P. 56(c), (e) ; see also Celotex Corp. v. Catrett , 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A mere "scintilla" of evidence supporting the opposing party's position will not suffice; instead, there must be a sufficient showing that the jury could reasonably find for that party. Anderson , 477 U.S. at 252, 106 S.Ct. 2505 ; see also Walker v. Darby , 911 F.2d 1573, 1577 (11th Cir. 1990).
III. DISCUSSION
Florida law provides that "an insurer owes a duty of good faith to its insured." Berges v. Infinity Ins. Co. , 896 So. 2d 665, 672 (Fla. 2004). This duty to act in good faith "arises from the nature of the insurer's role in handling the claim on the insured's behalf," because the insured has surrendered to the insurer control of the handling of the claim and settlement decisions. Harvey v. GEICO Gen. Ins. Co. , 259 So. 3d 1, 6 (Fla. 2018). When an insurer breaches its duty, a cause of action for bad faith may be brought against the insurer. Boston Old Colony Ins. Co. v. Gutierrez , 386 So. 2d 783, 785 (Fla. 1980).
The insurer's duty of good faith "obligates the insurer to advise the insured of settlement opportunities, to advise as to the probable outcome of the litigation, to warn of the possibility of an excess judgment, and to advise the insured of any steps he might take to avoid the same." Gutierrez, 386 So. 2d at 785. The duty also requires the insurer to "investigate the facts, give fair consideration to a settlement offer that is not unreasonable under the facts, and settle, if possible, where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so." Id. Florida law also imposes an affirmative duty upon the insurer to affirmatively initiate settlement negotiations before a claimant makes a demand when "liability is clear[ ] and injuries so serious that a judgment in excess of the policy limits is likely." Powell v. Prudential Prop. and Cas. Ins. Co. , 584 So. 2d 12, 14 (Fla. 3rd DCA 1991). In handling claims against its insured, "the insurer has a duty to use the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business." Harvey , 259 So. 3d at 8 (quoting Gutierrez , 386 So. 2d at 785 ). The insurer must therefore make "decisions in good faith and with due regard for the interests of [its] insured." Gutierrez, 386 So. 2d at 785. "The damages claimed by an insured in a bad faith case ‘must be caused by the insurer's bad faith.’ " Harvey , 259 So. 3d at 7 (quoting Perera v. U.S. Fidelity & Guar. Co. , 35 So. 3d. 893, 902 (Fla. 2010) ).
Under Florida law, "the question of whether an insurer has acted in bad faith in handling claims against the insured is determined under the totality of the circumstances standard." Berges , 896 So. 2d at 680. The question of whether this standard has been met is ordinarily for the jury to decide. Id. ; see also Martin v. Allstate Prop. and Cas. Ins. Co. , 794 F. App'x 883, 887 (11th Cir. 2019) ("Although determining whether an insurer acted in bad faith is generally a question for the jury, courts applying Florida law have granted summary judgment if the undisputed facts would not allow any reasonable jury to conclude the defendant breached its duty of good faith.").
Defendant moves for summary judgment, claiming that no reasonable jury could conclude that Defendant acted in bad faith when handling Muro's claim against Plaintiff. Defendant claims that the record is undisputed and demonstrates that, upon notification of the accident, Defendant investigated the severity and causation of Muro's injuries, kept Plaintiff informed, and sought to settle the claim. However, in contrast to Defendant's arguments, and by Defendant's own admissions, the record does include some evidence of bad faith. Defendant acknowledged that a failure to properly advise an insured on causation and damages in a case constitutes a violation of the Defendant's internal rules and amounts to evidence of bad faith. (Michael Pittman Deposition [DE 62-1] ("Pittman Depo.") 55:12-24; 71:13-21.) Defendant admits that it did not advise Plaintiff of Defendant's evaluation of causation and damages in this case. (Pittman Depo. 53:15-54:10.) Defendant also acknowledges that it has a responsibility to advise Plaintiff of the steps that she may take in order to avoid an excess judgment. (Pittman Depo. 97:21-24.) Defendant admits that it did not advise Plaintiff of the steps that she could have taken to avoid the excess judgment; rather, Defendant told Plaintiff that she would need to hire an attorney, at her own expense, to obtain advice on how to avoid an excess judgment in this matter. (Pittman Depo. 97:10-24; see also DE 58-7, 58-10.) Plaintiff relies heavily on the concessions and statements made in Pittman's deposition to support her motion for summary judgment. Plaintiff claims that Defendant has admitted to acting in bad faith when handling Muro's claim and, therefore, she should be entitled to summary judgment. While Defendant's concessions are evidence of bad faith, such evidence alone is not dispositive on the matter. Rather, Pittman's testimony is evidence for the jury to consider when assessing the totality of the circumstances surrounding Defendant's handling of the claim.
Moreover, both Defendant and Plaintiff allocate a significant portion of their respective arguments towards the reasonableness of Defendant's decision to repeatedly reject Muro's settlement offers and the adequacy of Defendant's counteroffers. "Under Florida's totality of the circumstances approach, the reasonableness and adequacy of an insurer's settlement offer are relevant factors to consider when determining bad faith, and as such, constitute genuine issues of material fact that preclude summary judgment." Cousin v. GEICO Gen. Ins. Co. , 719 F. App'x 954, 961 (11th Cir. 2018) (citing Anderson , 477 U.S. at 248, 106 S.Ct. 2505 ). Thus, upon review of the record and the arguments presented by both parties, the Court finds that genuine issues of material fact remain in dispute, and therefore, summary judgment is not warranted. Accordingly, it is
ORDERED that:
1. Defendant's Motion for Summary Judgment [DE 55] is DENIED .
2. Plaintiff's Motion for Summary Judgment [DE 56] is DENIED .
DONE AND ORDERED in Fort Lauderdale, Florida on this 22nd day of June, 2021.