Appellate and Bad Faith Update

September 30, 2014 by on News


Fourth District Court of Appeal Holds UM Verdict Establishes Amount of Damages in First Party Bad Faith Action

In Geico Gen. Ins. Co. v. Paton, No. 4D12-4606 (Fla. 4th DCA Sept. 17, 2014), the Fourth District Court of Appeal considered whether a UM plaintiff is required to prove damages in a first party bad faith trial, rather than being permitted to rely on the jury’s damage determination in the first trial.

In the underlying UM action, the jury awarded $369,247 in excess of the policy limits. After judgment was entered in the amount of the policy limit, Plaintiff amended her complaint to add a claim for bad faith. She then moved in limine to exclude all evidence of damages, arguing that the excess verdict returned in the UM trial established the damages she could recover in her bad faith claim. The trial court agreed with Plaintiff.

On appeal, the insurance carrier argued the trial court denied it due process by treating the excess verdict as conclusive evidence of Plaintiff’s damages. The carrier wanted to retry to the damages portion of the case relying on GEICO Gen. Inc. Co. v. Bottini, 93 So. 3d 476 (Fla. 2d DCA 2012).

The Court rejected the carrier’s argument and explained that the UM statute clearly provides that the damages in a first-party bad faith case include the total amount awarded in excess of the policy limits. The UM trial fixes the amount of damages in a first-party bad faith action.

Finally, the Court explained that if the insurance carrier wanted to object to the amount of the verdict it should have moved for a new trial in the UM action. The Florida Constitution’s requirement that an appeal be from a final judgment or order should be read expansively to include an appeal from an order denying a new trial in a first party suit for uninsured motorist benefits. As a result, the insurance carrier cannot belatedly object to the amount awarded and retry those damages in the later bad faith case.

Therefore, it is extremely important for an insurance carrier to file a motion for new trial in the UM action in order to challenge the amount of excess verdict.

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