Summary
In Deary, a similar finding was rendered as a matter of law: An insurer was never presented with a reasonable opportunity to settle because the injured party withdrew her settlement demand at the same time that she increased her damages amount by electing to undergo surgery.
Summary of this case from Gonzalez v. GEICO Gen. Ins. Co.Opinion
CASE NO. 20-80279-CV-MIDDLEBROOKS/Brannon
2021-04-30
Darlene DEARY, individually and as assignee of Dwight Norman, Plaintiff, v. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant.
Stephanie Alice Weeks, Michal Meiler, Ver Ploeg & Marino, P.A., Miami, FL, for Plaintiff. B. Richard Young, Young Bill Roumbos & Boles PA, Adam Alexander-Speer Duke, Young Bill Fugett & Roumbos, Pensacola, FL, Christopher Richard Machado, Miami, FL, for Defendant.
Stephanie Alice Weeks, Michal Meiler, Ver Ploeg & Marino, P.A., Miami, FL, for Plaintiff.
B. Richard Young, Young Bill Roumbos & Boles PA, Adam Alexander-Speer Duke, Young Bill Fugett & Roumbos, Pensacola, FL, Christopher Richard Machado, Miami, FL, for Defendant.
ORDER ON MOTION FOR SUMMARY JUDGMENT
DONALD M. MIDDLEBROOKS, UNITED STATES DISTRICT JUDGE
THIS CAUSE comes before the Court on Progressive American Insurance Company's Motion for Summary Judgment and Alternative Partial Motion for Summary Judgment. (DE 51). The Motion is fully briefed. (DE 70; DE 76). For the following reasons, the Motion and Alternative Partial Motion are granted.
BACKGROUND
This is a common law third-party bad faith action arising out of the handling of a bodily injury claim that resulted from an automobile collision. (See generally DE 47).
On March 17, 2017, Dwight Norman ("Mr. Norman") caused an automobile accident that injured Plaintiff Darlene Deary ("Plaintiff" or "Ms. Deary"). (Defendant's Statement of Material Facts ("SOMF") ¶ 2; Response SOMF ¶ 2). At the time of the accident, Mr. Norman maintained an automobile insurance policy with Progressive American Insurance Company ("Defendant" or "Progressive"), which provided bodily injury liability coverage in the amount of $25,000 per person/$50,000 per accident. (SOMF ¶ 1; Response SOMF ¶ 1). Plaintiff did not complain of any injuries at the scene of the accident. (Id. ).
On March 18, 2017, Progressive Adjuster Jose Pantoja ("Mr. Pantoja") conducted an initial liability review and determined that Mr. Norman was 100% liable for the accident. (SOMF ¶¶ 4, 7; Response SOMF ¶¶ 4, 7). That same day, Mr. Pantoja also determined that Elizabeth Diente ("Ms. Diente"), Plaintiff's mother who was in the passenger seat at the time of the accident, was the registrant of the vehicle and had allegedly been injured in the accident. (SOMF ¶¶ 2, 6; Response SOMF ¶¶ 2, 6). On March 21, 2017, a Progressive employee spoke with Ms. Diente over the phone about Ms. Diente's bodily injury claim. (DE 86-3 at 9). During the phone call, Ms. Diente shared that Plaintiff "has pancreatic disease and now was in pain." (Id. ). On March 23, 2017, a Progressive employee met in person with Ms. Diente and Plaintiff and settled Ms. Diente's claim. (SOMF ¶ 8; Response SOMF ¶ 8; DE 86-4). The claim note from the March 23 meeting makes no mention of whether Plaintiff informed the Progressive employee that she was injured or whether the Progressive employee asked Plaintiff if she sustained any injuries as a result of the accident. (Id. at 11).
On April 13, 2017, Progressive received a letter of representation from Plaintiff's counsel in the underlying action, Gordon & Donor, and the next day, Progressive opened a bodily injury claim for Plaintiff. (SOMF ¶ 9; Response SOMF ¶ 9; DE 86-3 at 14). On April 14, 2017, Progressive Adjuster Amy Gabay ("Ms. Gabay") spoke to Gordon & Donner Pre-Litigation Paralegal Yolanda McGee ("Ms. McGee"), who stated that Plaintiff had suffered injuries to her lower back and neck and had gone to the emergency room. (SOMF ¶ 10; Response SOMF ¶ 10). That day, Ms. Gabay contacted Mr. Norman and advised that a bodily injury claimant against him was being represented by an attorney and advised of the process going forward. (SOMF ¶ 11; Response SOMF ¶ 11). Shortly thereafter, by running a search in a claims database, Ms. Gabay discovered that Plaintiff had sustained a neck injury in a June 17, 2002 car accident. (SOMF ¶ 12; Response SOMF ¶ 12).
On April 17, 2017, Ms. Gabay sent a letter to Mr. Norman via regular and certified mail informing him that one or more parties involved in the March 17, 2017 collision have damages resulting from the accident, that the value of those damages may exceed his policy limits, and that he would be responsible for paying any amount in excess of his coverage. (SOMF ¶ 13; Response SOMF ¶ 13). The certified copy of the correspondence was returned to Progressive as unclaimed, but the letter sent by regular mail was not returned to Progressive. (Id. ; Reply SOMF ¶ 13). On April 25, 2017, Ms. Gabay called Mr. Norman to discuss Plaintiff's claim, but Mr. Norman said that he could not speak and hung up the phone. (SOMF ¶ 14; Response SOMF ¶ 14). On April 26, 2017, Progressive sent notarized policy disclosures to Plaintiff's counsel. (SOMF ¶ 15; Response SOMF ¶ 15).
On July 17, 2017, Ms. McGee sent Progressive a time-limited demand letter requesting the tender of the $25,000 bodily injury policy limits by August 7, 2017. (SOMF ¶ 16; Response SOMF ¶ 16). The demand letter stated in pertinent part that
Ms. Deary has undergone a course of CERVICAL FACET INJECTIONS to help alleviate her pain. Dr. Sheth performed the injections and he also opined Ms. Deary is a surgical candidate for a TWO LEVEL ANTERIOR CERVICAL DISCETOMY FUSION. She was administered a 7% disability impairment rating.
(Id. (emphasis in original)). Attached to the demand letter were medical records from the Delray Medical Center, an MRI of Plaintiff's cervical spine, medical records from Plaintiff's treatment with Dr. Rishi of the Spine and Brain Surgery, LLC, and records from Plaintiff's treatment with Dr. David J. Bougie of the Bougie Center for Chiropractic and Alternative Medicine. (Id. ). Analysis of the records revealed the following: Plaintiff first received treatment for her injuries from the March 17, 2017 accident 12 days later on March 29, 2017. (SOMF ¶ 17; Response SOMF ¶ 17). X-rays taken at the Delray Medical Center revealed that Plaintiff suffered from degenerative changes and no displaced fractures, resulting in a diagnosis of cervical sprain and cervical disc degeneration. (Id. ). As of April 14, 2017, Dr. Sheth diagnosed Plaintiff with acute pain due to trauma and cervicalgia and recommended chiropractic treatment. (DE 86-12 at 49). By June 28, 2017, Dr. Sheth determined that Plaintiff had reached maximum medical improvement and assigned a permanent impairment rating of 7%. (SOMF ¶ 19; Response SOMF ¶ 19). He opined that his final diagnosis of "neck pain" was "related to the motor vehicle accident sustained on 3/17/17" and that "[i]f there is worsening or recurrent symptoms or neurological deficits falls then definitive surgical intervention may be warranted. The approximate global cost of the 2 level ACDF cervical spine surgery is 80,000 to 100,000." (Id. ; DE 86-12 at 55). On July 17, 2017, Dr. Bougie, who had administered Plaintiff's chiropractic treatment, determined that Plaintiff had reached maximum medical improvement and assigned her a 12–15% impairment rating. (SOMF ¶ 20; Response SOMF ¶ 20).
On July 19, 2017, Ms. Gabay sent correspondence to Mr. Norman via both regular and certified mail to notify him of Plaintiff's demand, including a copy of Plaintiff's demand letter. (SOMF ¶ 22; Response SOMF ¶ 22). On July 21, 2017, Ms. Gabay reviewed the medical records attached to Plaintiff's demand letter and contacted Ms. McGee to request Plaintiff's PIP log, emergency room bill, and MRI bill. (SOMF ¶¶ 23–24; Response SOMF ¶¶ 23–24). On July 24, 2017, Ms. McGee faxed Progressive Plaintiff's PIP log, which indicated that to date, Plaintiff's automobile insurer, Geico General Insurance Company, had paid $6,403.31 in medical bills. (SOMF ¶ 25; Response SOMF ¶ 25). That same day, Ms. Gabay contacted Ms. McGee to inquire about the missing emergency room bill, to which Ms. McGee responded that she was having difficulty obtaining it. (SOMF ¶ 26; Response SOMF ¶ 26). Ms. Gabay advised Ms. McGee that the claim evaluation would be incomplete without the emergency room bill. (Id. ). On August 1, 2017, Ms. Gabay received Plaintiff's PIP ledger and medical bill for Plaintiff's April 7, 2017 MRI but not the emergency room bill. (SOMF ¶ 27; Response SOMF ¶ 27). Ms. Gabay then calculated Plaintiff's out-of-pocket expenses to be $1,601.00. (Id. ).
Using Liability Navigator, a tool Progressive uses to assist in evaluating claims, Ms. Gabay estimated Plaintiff's total net damages range to be between $3,856.00 and $12,701.00 and an appropriate settlement amount to be between $8,500.00 and $12,701.00. (SOMF ¶¶ 28–29; Response SOMF ¶¶ 28–29). Plaintiff asserts that Ms. Gabay "did not include any damages in her evaluation for future medical expenses" and that she "did not assign a value to Ms. Deary's ER visit in its initial evaluation of her damages." (Additional Facts ¶¶ 4–5). Progressive disputes the phrasing of these assertions. (Response to Additional Facts ¶¶ 4–5). Review of Ms. Gabay's deposition transcript and Progressive Casualty Director for Florida Doug Helton's deposition transcript indicate that while Ms. Gabay did not assign a specific monetary value for "future medical expenses" (DE 86-15 at 98:16–22; 99:19–22), she did assign an amount for "general damages," which could include, among other types of damages, future medical expenses. (DE 94-1 at 13:11–12; 63:16–25; 67:8–13; 68:2–23). Similarly, while Ms. Gabay did not assign a value for Plaintiff's emergency room treatment because she lacked the medical bill, she did assign a value for all of Plaintiff's medical visits under the "general damages" aspect of the evaluation. (DE 86-15 at 93:5–10; 93:22; 95:11). Plaintiff's expert, Susan Kaufman, opined that in the absence of the actual emergency room bill, Ms. Gabay could have assigned a generic value for the visit based on the emergency room treatment records and that it was unreasonable for Ms. Gabay not to do so. (DE 69-1 at 70:20–71:11). In addition, despite the disability ratings provided by Plaintiff's treating physicians, Progressive determined that Plaintiff did not have any permanent injuries. (Additional Facts ¶ 6; Response to Additional Facts ¶ 6).
Based on Ms. Gabay's evaluation, on August 3, 2017, Progressive offered $8,500 to settle Plaintiff's bodily injury claim. (SOMF ¶ 30; Response SOMF ¶ 30). That same day, Ms. Gabay called Mr. Norman "to advise of [the] demand" and left a voicemail. (SOMF ¶ 31; Response SOMF ¶ 31).
On August 7, 2017, Ms. McGee sent a formal response rejecting Ms. Gabay's counteroffer and advised that Plaintiff would not accept anything less than the limits. (SOMF ¶ 33; Response SOMF ¶ 33). Plaintiff's counsel extended the deadline to respond to the demand by one week to August 14, 2017 and warned that failure to tender the policy limits by that date would result in Plaintiff filing suit against Mr. Norman. (Id. ). In renewing its demand for the policy limits, Ms. McGee stated:
As a Federal Jury will learn from reading this demand which will be an Exhibit in any Federal trial, we have given Progressive Insurance Company every opportunity to act reasonably and settle this matter[.] At least one juror in every bad faith trial has one question for the Judge which spreads throughout the panel "Who was being unreasonable in not resolving the matter so as to require us to be here listening to the evidence of the case?"
(DE 86-19 at 2). Plaintiff's counter-demand included no new information or documentation. (Id. ).
On August 11, 2017, Progressive again offered to settle Plaintiff's claim for $8,500. (SOMF ¶ 35; Response SOMF ¶ 35). On August 15, 2017, Ms. McGee contacted Ms. Gabay to inform her that Plaintiff would be filing suit against Mr. Norman because Progressive failed to tender its policy limits by August 14, 2017. (SOMF ¶ 36; Response SOMF ¶ 36). Ms. Gabay communicated that she was still willing to negotiate, but Ms. McGee advised that there would be no further negotiations. (Id. ). Ms. Gabay inquired whether Plaintiff would undergo surgery. (SOMF ¶ 36). According to Progressive's claims notes from this conversation, Ms. McGee responded, "Who in their right mind would have surgery with no UM [uninsured motorist] coverage and only $25,000 in BI [bodily injury]?" (Id. ). In her deposition testimony, Ms. McGee disputes that she responded in that way, though she acknowledges that she does not remember every conversation that she had with Ms. Gabay. (Response SOMF ¶ 36; DE 86-18 at 92:15–22). Later that day, Ms. Gabay mailed correspondence to Mr. Norman, advising that a suit may be filed against him. (SOMF ¶ 37). Plaintiff contends that Mr. Norman never received that letter. (Response SOMF ¶ 37).
Progressive then attempted to communicate with Plaintiff's counsel on two more occasions to discuss Plaintiff's claim, but the attempts were unsuccessful. (SOMF ¶¶ 38–39; Response SOMF ¶¶ 38–39). On September 18, 2017, Plaintiff's counsel sent Progressive a letter informing that "Ms. Deary's settlement demand for $25,000.00 is hereby withdrawn and we will proceed with filing a Complaint." (SOMF ¶ 40; Response SOMF ¶ 40). By way of that letter, Progressive learned for the first time that Plaintiff would be undergoing the "ANTERIOR CERVICAL DISCECTOMY FUSION " surgery on September 21, 2017. (Id. (emphasis in original)).
Citing Plaintiff's deposition transcript, Plaintiff asserts that "[h]ad Progressive tendered the policy limits, Ms. Deary's claim would have settled prior to her invasive spinal surgery." (Additional Facts ¶ 1). Progressive disputes this contention as a misrepresentation of Plaintiff's testimony. (Response to Additional Facts ¶ 1). The following exchange occurred during Plaintiff's deposition:
[Progressive's counsel]. Do you think, do you personally think your claim could have settled prior to you getting the surgery?
...
[Plaintiff]. That's anyone's hope on this, on my side, being the one hit by the car.
(DE 86-5 at 53:1–7).
On September 26, 2017, Ms. McGee informed Ms. Gabay through a phone call that Plaintiff had to reschedule her surgery due to issues with her pre-operative bloodwork. (SOMF ¶ 41; Response SOMF ¶ 41). Progressive did not receive any medical records reflecting information or documentation that the surgery had been rescheduled. (Id. ). On October 4, 2017, Ms. Gabay contacted Ms. McGee and learned that Plaintiff had not yet had the surgery. (SOMF ¶ 42; Response SOMF ¶ 42). On October 23 and November 6, 2017, Ms. Gabay left voicemails for Ms. McGee to follow up on the status of Progressive's settlement offer and the status of any lawsuit, but Ms. McGee did not respond. (SOMF ¶ 43; Response SOMF ¶ 43).
The October 23, 2017 claims note says: "L/M FOR YOLANDA AT ATTY TO F.U. ON OFFERS-SUIT?" (DE 86-3 at 22). The November 6, 2020 claims note says: "L/M FOR YOLANDA AT ATTY TO F/U ON OFFER AND CASE STATUS. (Id. ). Plaintiff disputes "the accuracy of the note, as Ms. Deary had already rejected Progressive's $8,500 counter-offer." (Response SOMF ¶ 43). I agree that by the time of Ms. Gabay's October 23 and November 6, 2017 phone calls to Ms. McGee, the record reflects that Plaintiff had unequivocally rejected Progressive's counteroffer. Thus, I find Ms. Gabay's word choice in her claims notes somewhat peculiar. Immediately surrounding these two claims notes, however, are seven notes between October 4 and November 28, 2017 documenting that Ms. Gabay searched Palm Beach County court records to ascertain whether Plaintiff had filed suit. (DE 86-3 at 22–23). Thus, it appears that what Progressive was primarily concerned about during this time was whether Plaintiff would file a lawsuit, not whether she would come back to the settlement table and accept its $8,500 offer or any offer for the policy limits. And even if Ms. Gabay had reached out to inquire about the prospect of settlement, she would have exceeded what her duty of good faith was, given that Plaintiff shut the door to settlement for the policy limits or anything less by way of Plaintiff's September 18, 2017 letter.
Unbeknownst to Progressive, on November 16, 2017, Plaintiff underwent a spinal surgery (anterior cervical discectomy fusion at the C4-C5 and C5-C6 levels). (SOMF ¶ 44; Response SOMF ¶ 44). On November 21, 2017, Plaintiff filed suit against Mr. Norman. (SOMF ¶ 45; Response SOMF ¶ 45).
On December 20, 2017, Progressive spoke with a Gordon & Donner Litigation Paralegal, Sara Covington ("Ms. Covington"), who shared that Plaintiff had undergone a surgery, but she was not sure of the exact surgery. (SOMF ¶ 47; Response SOMF ¶ 47). On January 3, 2018, Ms. Covington advised Progressive that Plaintiff would not be submitting additional medical records or a new demand. (SOMF ¶ 48; Response SOMF ¶ 48).
On April 3, 2018, Mr. Norman was served with the complaint in the underlying negligence action, and on April 11, 2018, Progressive referred defense of the action to John H. Richards, Esq. (SOMF ¶¶ 49–50; Response SOMF ¶¶ 49–50). Also, on April 11, 2018, Adjuster Mario Allums ("Mr. Allums") learned that Plaintiff had been in another car accident on February 14, 2018. (SOMF ¶ 51; Response SOMF ¶ 51). In light of the subsequent accident and not having confirmation of when the surgery had occurred, Mr. Allums determined that he would require updated medical records and discovery to fully evaluate Plaintiff's claim. (Id. ). On June 14, 2018, Progressive maintains that through discovery in the underlying action, it received for the first time, (1) medical records confirming that Plaintiff underwent the spinal surgery on November 16, 2017, and (2) medical bills reflecting that Plaintiff's total gross medical expenses exceeded Mr. Norman's policy limits. (SOMF ¶ 53). Plaintiff disputes that this was the first time that Progressive learned that Plaintiff had undergone the surgery in November 2017, citing the conversation Ms. Covington had with Progressive on December 20, 2017. (Response SOMF ¶ 53).
The same day that it received this information, Progressive directed Mr. Norman's defense counsel to offer to settle Plaintiff's claim for $25,000. (SOMF ¶ 54; Response SOMF ¶ 54). Plaintiff counter-offered with a proposal for settlement of $250,000. (Id. ).
On May 22, 2019, the jury in the underlying action returned a verdict awarding Plaintiff $332,500 in damages. (SOMF ¶ 55; Response SOMF ¶ 55). On February 25, 2020, Plaintiff initiated this bad faith lawsuit as Mr. Norman's assignee. (DE 1; DE 47 ¶ 24; DE 16-1). Progressive now moves for summary judgment. (DE 51).
An insured against whom an excess judgment is entered may assign its rights in the action for the amount of the judgment over the policy limits to a third party, usually in exchange for the third party's release from execution of the judgment against the insured. See Aaron v. Allstate Ins. Co. , 559 So. 2d 275, 276–77 (Fla. 4th DCA 1990).
LEGAL STANDARD
"The court shall grant summary judgment 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). A disputed fact is "material" if it "might affect the outcome of the suit under the governing law." Talavera v. Shah , 638 F.3d 303, 308 (D.C. Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). A dispute over a material fact is "genuine" if it could lead a reasonable jury to return a verdict in favor of the nonmoving party. See Scott v. Harris , 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge at summary judgment. Thus, [the court] do[es] not determine the truth of the matter, but instead decide[s] only whether there is a genuine issue for trial." Barnett v. PA Consulting Group, Inc. , 715 F.3d 354, 358 (D.C. Cir. 2013) (quoting Pardo-Kronemann v. Donovan , 601 F.3d 599, 604 (D.C. Cir. 2010) ).
Under the summary judgment standard, Defendant, as the moving party, bears the "initial responsibility of informing the district court of the basis for [its] motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits which [it] believe[s] demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In response, the nonmoving party must "go beyond the pleadings and by [its] own affidavits, or depositions, answers to interrogatories, and admissions on file, ‘designate’ specific facts showing that there is a genuine issue for trial." Id. at 324, 106 S.Ct. 2548 (internal citations omitted). If a party against whom a motion is filed fails to "establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial," summary judgment for the movant is warranted. Celotex Corp. , 477 U.S. at 322, 106 S.Ct. 2548. The party moving for summary judgment bears the burden of establishing that there is insufficient evidence to support the non-moving party's case/defense. Id. at 325, 106 S.Ct. 2548.
ANALYSIS
I. Florida Insurance Bad Faith Law
Florida's insurance bad faith law "imposes a fiduciary obligation on an insurer to protect its insured from a judgment that exceeds the limits of the insured's policy." Harvey v. GEICO Gen. Ins. Co. , 259 So. 3d 1, 3 (Fla. 2018). "Bad faith law was designed to protect insureds who have paid their premiums and who have fulfilled their contractual obligations by cooperating fully with the insurer in the resolution of claims." Berges v. Infinity Ins. Co. , 896 So. 2d 665, 682 (Fla. 2004). The Florida Supreme Court has explained that:
The insurance contract requires that the insured surrender to the insurance company control over whether the claim is settled. In exchange for this relinquishment of control over settlement and the conduct of the litigation, the insurer obligates itself to act in good faith in the investigation, handling, and settling of claims brought against the insured. Indeed, this is what the insured expects when paying premiums.
Id. at 682–83. "Thus, ‘[b]ad faith jurisprudence merely holds insurers accountable for failing to fulfill their obligations ....’ " Harvey , 259 So. 3d at 6 (quoting Berges , 896 So. 2d at 683 ).
" ‘[I]n handling the defense of 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.’ " Id. (quoting Boston Old Colony Ins. Co. v. Gutierrez , 386 So. 2d 783, 785 (Fla. 1980) ). In Boston Old Colony , the Florida Supreme Court explained at length what this duty entails:
This good faith duty 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 same. The insurer must 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. Because the duty of good faith involves diligence and care in the investigation and evaluation of the claim against the insured, negligence is relevant to the question of good faith. The question of failure to act in good faith with due regard for the interests of the insured is for the jury.
386 So. 2d at 785 (internal citations omitted). However, where the insurer had no reasonable opportunity to settle the claim, it could not have acted in bad faith as a matter of law. See RLI Ins. Co. v. Scottsdale Ins. Co. , 691 So. 2d 1095, 1096 (Fla. 4th DCA 1997).
"The question of whether an insurer has acted in bad faith ... is determined under the totality of the circumstances." Moore v. GEICO Gen. Ins. Co. , 758 F. App'x 726, 729 (11th Cir. 2018) (internal citation and quotation omitted). The "critical inquiry in a bad faith [case] 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. In other words, "the focus in a bad faith case is not on the actions of the claimant but rather on those of the insurer in fulfilling its obligations to the insured." Berges , 896 So. 2d at 677. "The damages claimed by an insured in a bad faith case ‘must be caused by the insurer's bad faith.’ " Id. (quoting Perera v. U.S. Fidelity & Guar. Co. , 35 So. 3d 893, 902 (Fla. 2010) ).
II. Application
Because "it is [ordinarily] for the jury to decide whether [an] insurer failed to act in good faith," Harvey , 259 So. 3d at 7, Defendant bears a heavy burden at this summary judgment stage. Defendant must initially establish that, based upon the record, no reasonable jury could conclude that Defendant acted in bad faith when handling Plaintiff's claim against Mr. Norman. See 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.").
A. Valuation of Claim
As a general matter, Plaintiff asserts that Progressive acted in bad faith when it failed to settle her claim against its insured, Mr. Norman, "despite having numerous opportunities to do so," including in response to the original July 17, 2017 demand for the policy limits and the renewed August 7, 2017 demand for the policy limits. (DE 70 at 1–3). More specifically, Plaintiff's theory of bad faith is that Progressive failed to act fairly and honestly toward Mr. Norman with due regards for his interest, as opposed to Progressive's financial self-interest, when it intentionally undervalued Plaintiff's bodily injury claim by excluding future medical expenses and non-economic damages from its calculation and subsequently failing to reevaluate damages and increase its valuation after it learned that Plaintiff intended to undergo a spinal surgery. (DE 70 at 8–15).
Progressive characterizes the core of the Parties’ dispute differently. Progressive maintains that there is "no evidence that [it] sought to avoid settling Plaintiff's claim," but rather, the undisputed facts demonstrate that it acted with diligence in investigating and attempting to settle. (DE 51 at 10). In contrast to knowing undervaluation, Progressive asserts that it "simply disagreed about the value of Plaintiff's claim at the time of her July 17, 2017 demand for policy limits" based on its investigation thus far and the contents of and attachments to the demand letter. (Id. ). Progressive states that while the coverage and liability determinations were straightforward, "the damages evaluation was more complicated," resulting in it not immediately tendering its policy limits at the first demand. (Id. at 11). Progressive argues that a valuation disagreement, while it was attempting to diligently resolve the claim, cannot amount to bad faith. (Id. at 10–11).
Considering the facts of this case on the whole, as I must do under the totality-of-the-circumstances analysis, I conclude that no reasonable jury could find bad faith on this record. The undisputed facts demonstrate that from the moment Progressive learned of Plaintiff's bodily injury claim, it expeditiously took steps to determine coverage, liability, and an appropriate damages calculation and to settle the claim for what it deemed to be a reasonable sum. Plaintiff harps on the idea that Progressive breached its duty of good faith by undervaluing Plaintiff's claim because it failed to include future medical expenses and non-economic damages in its evaluation. (DE 70 at 8–11). Out of the gate, a mere reasonable disagreement about the value of a claim does not presumptively constitute bad faith conduct on the part of the insurer. See Feijoo v. GEICO Gen. Ins. Co. , 678 F. App'x 862, 864 (11th Cir. 2017) (affirming district court's grant of insurer's motion for summary judgment where insurer valued claim at less than the medical documentation showed because "its claims adjuster concluded on the basis of her experience that the medical bills seemed excessive"). Rather, the relevant inquiry in a bad faith action in whether the insurer acted reasonably in evaluating and attempting to settle its insured's claim. See Cruz v. Am. United Ins. Co. , 580 So. 2d 311, 312 (Fla. 3d DCA 1991).
Here, based on Plaintiff's July 17, 2017 demand packet and Progressive's subsequent evaluation of Plaintiff's PIP log, Progressive determined that Plaintiff's out-of-pocket medical expenses totaled $1,601.00. (SOMF ¶ 27; Response SOMF ¶ 27). Progressive then counteroffered to settle Plaintiff's claim for $8,500.00—nearly five times the documented cost of Plaintiff's medical expenses. (SOMF ¶ 30; Response SOMF ¶ 30). Progressive's counteroffer was reasonable based on the record that it had before it at the time that it conducted the initial evaluation, and therefore no reasonable jury could find that Progressive's decision to counteroffer, as opposed to just tendering the $25,000 policy limits, equated to bad faith.
Plaintiff suggests that the possibility that Plaintiff could undergo an invasive spinal surgery in the future should have led Progressive to counteroffer at a higher amount, or just tender the limits. This is an untenable position. While Plaintiff's underlying counsel stated in its demand letter that "Dr. Sheth ... opined Ms. Deary is a surgical candidate for a TWO LEVEL ANTERIOR CERVICAL DISCECTOMY FUSION ," the attachments to the demand letter indicate that this characterization is misleading. (SOMF ¶ 16; Response SOMF ¶ 16 (emphasis in original)). Instead, with respect to surgery, buried in the nearly 150-page demand packet, Dr. Sheth opined that "[i]f there is worsening or recurrent symptoms or neurological deficits fall[ ] then definitive surgical intervention may be warranted. The approximate global cost of the 2 level ACDF cervical spine surgery is 80,000 to 100,000." (DE 86-12 at 55). The demand did not communicate that Plaintiff intended to undergo the surgery or that she was even seriously considering it. Thus, whether an invasive spinal surgery would become a future medical expense for Plaintiff was entirely unknown to Progressive. Dr. Sheth's language regarding future surgical intervention was speculative, indefinite, and predicated upon the occurrence of multiple contingencies. In view of the totality of the circumstances, and notwithstanding Dr. Sheth's suggestion that surgery was a possibility, I do not find that Progressive was obligated to tender policy limits, as Plaintiff suggests. Tendering policy limits upon the first vague medical opinion regarding the mere possibility of surgery cannot be the sole means by which an insurer can discharge its duty to act in good faith.
Furthermore, Plaintiff devotes considerable attention to the minutia of how Progressive calculated the $8,500 counteroffer, which strikes me as an exercise in splitting hairs. Progressive allotted nearly $7,000 for "general damages" on top of the $1,601.00 out-of-pocket expenses, which apparently took into consideration future medical expenses and non-economic damages. (DE 94-1 at 13:11–12; 63:16–25; 67:8–13; 68:2–23; DE 86-15 at 93:5–10; 93:22; 95:11). Plaintiff's expert opines that Ms. Gabay acted unreasonably when she failed to assign a specific, generic value to Plaintiff's emergency room visit in the absence of the actual bill upon initially evaluating the claim. (DE 69-1 at 70:20–71:11). Assuming this is true, although I am uneasy with this opinion, failing to guess at one medical expense in the context of conducting a diligent claim investigation does not amount to bad faith.
B. Opportunity to Settle
In addition, Progressive argues that it "was never presented with a realistic opportunity to settle Plaintiff's claim" within or at the policy limits after September 18, 2017, the date Plaintiff's counsel notified Progressive that Plaintiff was scheduled to undergo surgery, because simultaneously with providing this information, Plaintiff's counsel advised that its demand to settle for the $25,000 policy limits was withdrawn. (DE 51 at 17–19). I agree with Progressive's position. An insurer cannot act in bad faith for failure to settle when it did not have a reasonable opportunity to enter into a settlement on behalf of its insured in the first place. See RLI Ins. Co. v. Scottsdale Ins. Co. , 691 So. 2d 1095, 1096 (Fla. 4th DCA 1997).
Plaintiff argues that entry of summary judgment in Progressive's favor on this issue would be improper because Plaintiff asserts, citing Plaintiff's deposition testimony, that "[h]ad Progressive tendered the policy limits, Ms. Deary's claim would have settled prior to her invasive spinal surgery." (Additional Facts ¶ 1). But that is not what Plaintiff's deposition transcript says. Rather, in response to Progressive's counsel question, "Do you think, do you personally think your claim could have settled prior to you getting the surgery?", Plaintiff stated, "That's anyone's hope on this, on my side, being the one hit by the car." (DE 86-5 at 53:1–7). Aside from the misrepresentation, Plaintiff's vague answer during her deposition is not enough to create a genuine issue of material fact that would preclude resolving this issue on summary judgment. Even if Plaintiff had the secret intention to settle for the policy limits if asked, "there is no indication in the record that [Progressive] knew of this potential concession ...." Shin Crest PTE, Ltd. v. AIU Ins. Co. , 368 F. App'x 14, 16 (11th Cir. 2010).
Moreover, Plaintiff's argument that Progressive acted in bad faith when it failed to tender its policy limits after being advised on September 18, 2017 that Plaintiff intended to undergo the surgery ignores an elephant in the room. In that same September 18, 2017 letter, transmitted to Progressive nearly a month after the time-limited demand expired, Plaintiff stated in no uncertain terms that "Ms. Deary's settlement demand for $25,000 is hereby withdrawn and we will proceed with filing a Complaint for Damages. " (DE 86-23 at 1 (emphasis in original)). Plaintiff does not even attempt to address this in its summary judgment briefing. (See generally DE 70). Essentially, in the same breath that Plaintiff advised Progressive that she intended to undergo the spinal surgery, which would obviously increase her damages, she closed the door to settlement at or within the policy limits. Whether Plaintiff elected to undergo the surgery and whether Plaintiff would settle for the policy limits once she made that decision, were entirely within her control, and she exercised that control to foreclose further settlement negotiations with Progressive. I find that it was entirely reasonable for Progressive to take Plaintiff at her word that she would not settle for the limits any longer. An insurer does not have an affirmative duty to continue settlement negotiations when a claimant unequivocally communicated that settlement was off the table. Contreras v. U.S. Sec. Ins. Co. , 927 So. 2d 16, 21 (Fla. 4th DCA 2006) ("Once it became clear that [the insured] was unwilling to settle ... [the insurer] had no further opportunity to give fair consideration to a reasonable settlement offer ... Since [the insurer] could not force [the insured] to settle ... it did all it could do to avoid excess exposure to [its insured]."). Furthermore, because Plaintiff made clear on September 18, 2017 that she would not accept the policy limits, the correspondence that transpired between Progressive and Plaintiff thereafter is not pertinent to the bad faith inquiry. The notion that Progressive acted in bad faith when it did not reevaluate and tender the limits upon or after receipt of the September 18, 2017 letter is nonsensical given these facts. (DE 70 at 11–15).
I note, however, that in spite of Plaintiff cutting off settlement negotiations, Progressive still reached out to Plaintiff's counsel on several occasions to inquire about the status of the claim and any prospective lawsuit. Plaintiff's counsel was mostly unresponsive and when they did reciprocate communication, their responses were either vague or unhelpful, such as informing Progressive that they would not provide any further medical documentation. (SOMF ¶ 48; Response SOMF ¶ 48). Accordingly, I find that the critical time period for this bad faith action began on April 13, 2017 when Progressive received Plaintiff's bodily injury claim and ended on September 18, 2017 when Plaintiff refused to negotiate further or settle for the policy limits. Notwithstanding, the same day that Progressive obtained documentation through discovery in the underlying action that Plaintiff underwent the surgery and that the cost of same was in excess of the policy limits, it immediately tendered those limits. (SOMF ¶ 54; Response SOMF ¶ 54).
C. Communication with Mr. Norman
Finally, the Parties dispute the significance of Progressive's communication attempts with Mr. Norman throughout the claim handling process. Progressive maintains that its "communications or lack thereof with its insured had no causal connection to Plaintiff's excess judgment." (DE 51 at 19). Plaintiff counters this argument with deposition testimony from Mr. Norman that had he known of Plaintiff's offer to settle for the policy limits, he would have directed Progressive to settle the claim. (DE 70 at 19; DE 50-32 at 49:20–50:2).
I recognize that whether Progressive "advise[d] the insured of settlement opportunities, [ ] advise[d] as to the probable outcome of the litigation, [ ] warn[ed] of the possibility of an excess judgment, and [ ] advise[d] the insured of any steps he might take to avoid same," Boston Old Colony , 386 So. 2d at 785 (internal citations omitted), are germane inquiries under the totality-of the-circumstances analysis. However, they are not determinative of bad faith. Id. The record here is replete with Progressive's attempts, both written and verbal, to communicate with Mr. Norman. Moreover, I find as a matter of law that Progressive's purportedly failed attempts at keeping Mr. Norman apprised of developments did not ultimately lead to the excess judgment. Even if Mr. Norman had known of Plaintiff's $25,000 settlement offer and directed Progressive to tender the limits, would Progressive have acted in bad faith if it refused? Answering this question in the affirmative would produce an unworkable result, as any insured could order the pay-out of its policy limits at the first settlement demand to ensure its protection against an excess judgment. In this case, what would be the point of individualized claims handling at all? Plaintiff does not cite to any case holding that an insurer breaches its good faith duty when it fails to tender its limits at its insured's direction when its decision not to do so is otherwise reasonable. I thus find that even taking Mr. Norman's hypothetical testimony as true, any failed communication on Progressive's part did not cause an excess judgment. As such, Plaintiff's bad faith claim fails on this theory. CONCLUSION
In closing, I will make a few final remarks about this case. I have considered this record in detail and holistically, and it appears that from the beginning, Plaintiff's aim was to manipulate the underlying negligence case into a bad faith posture. Setting an initial three-week arbitrary deadline to settle or face litigation is one thing and par for the course in the personal injury world, but threatening Progressive with a bad faith lawsuit a few weeks after Plaintiff's first demand due to Progressive's reasonable counteroffer for a number that more appropriately reflected the medical documentation suggests Plaintiff's motivation was ultimately to seek a judgment in excess of the limits. This motivation was confirmed when Plaintiff simultaneously advised of her greatest future medical expense, the spinal surgery, and closed the door to settlement. While bad faith may always be on the mind of insurance and personal injury practitioners, setting up a case to manufacture a future bad faith claim is an unacceptable enterprise. No doubt, Florida bad faith jurisprudence has rightfully protected many insureds, but this is not one of those cases. Progressive is therefore entitled to summary judgment.
Accordingly, it is hereby ORDERED AND ADJUDGED that:
(1) Progressive American Insurance Company's Motion for Summary Judgment and Alternative Partial Motion for Summary Judgment (DE 51) are GRANTED .
(2) The Clerk of Court shall CLOSE THIS CASE and DENY ALL PENDING MOTIONS AS MOOT .