Adrian Fridman v. Safeco Insurance Company of Illinois
185 So. 3d 1214
Fla.2016Background
- Adrian Fridman was injured by an underinsured motorist and sued Safeco for uninsured/underinsured motorist (UM) benefits and to determine damages; he served a statutory civil remedy notice under §624.155 and alleged bad-faith failures to tender policy limits.
- After years of litigation and a rejected settlement offer, Safeco tendered the $50,000 UM policy limits twice—the second time with a confession of judgment—on the eve of a scheduled jury trial.
- The trial court denied Safeco’s motion to enter confessed judgment, allowed the UM trial to proceed, and the jury found tort liability and $1,000,000 in damages; the final judgment credited the $50,000 policy limits but reserved jurisdiction to allow Fridman to amend to add a bad-faith claim and to enter a supplemental judgment if bad-faith relief were later awarded.
- The Fifth District vacated the excess verdict and ordered entry of judgment for policy limits only, holding that Safeco’s confession of judgment mooted the UM action and that Fridman could pursue excess damages in a later bad-faith suit.
- The Florida Supreme Court accepted conflict review and held that (1) an insured is entitled to a determination of liability and the full extent of damages in the UM action before filing a first-party bad-faith action, and (2) that UM verdict is binding as an element of damages in any subsequent bad-faith action so long as parties have an opportunity to appeal properly preserved trial errors.
- The Court also held the trial court did not err in reserving jurisdiction to permit amendment to add a bad-faith claim and approved abatement/partial-judgment procedures to preserve appellate review of the UM verdict.
Issues
| Issue | Plaintiff's Argument (Fridman) | Defendant's Argument (Safeco) | Held |
|---|---|---|---|
| Whether insured must obtain determination of liability and full damages in UM action before filing first-party bad-faith claim | Fridman: Yes — Blanchard/Imhof/Vest require liability and damage determination first; tender does not moot UM claim | Safeco: No — tender/confession of judgment for policy limits moots UM action; excess can be litigated later in bad-faith suit | Held: Insured is entitled to determination in UM action before filing bad-faith claim |
| Whether a UM verdict in excess of policy limits is binding as an element of damages in subsequent bad-faith action | Fridman: Yes — UM verdict fixing full damages becomes element of bad-faith damages and should be binding | Safeco: No — binding verdict would be unfair if verdict exceeding limits is not subject to appellate review; tender should permit later bad-faith litigation | Held: UM verdict is binding in bad-faith action provided parties had opportunity to appeal properly preserved trial errors |
| Whether tender/confession of judgment moots the UM action and compels entry of policy-limits judgment | Fridman: Tender does not moot the UM action when insurer delays and attempts last-minute confession to avoid jury determination of excess damages | Safeco: Tender with confession should end UM litigation; trial court should have entered confessed judgment | Held: Tender/confession does not automatically moot UM action; trial court properly denied confession and allowed jury trial |
| Whether trial court could include excess verdict in final judgment while executing only policy limits and reserve jurisdiction to permit later amendment for bad-faith claim | Fridman: Trial court’s reservation and inclusion preserve appellate review and permit efficient resolution/abatement | Safeco: Reservation exceeded authority; final judgment must be limited to policy limits and not reserve bad-faith amendment | Held: Trial court did not err; reserving jurisdiction and including verdict amount is an appropriate procedure to preserve appellate review and allow later amendment/abatement |
Key Cases Cited
- Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So.2d 1289 (Fla. 1991) (underlying liability and extent of damages must be determined before bad-faith claim accrues)
- Imhof v. Nationwide Mut. Ins. Co., 643 So.2d 617 (Fla. 1994) (bad-faith complaint must allege a prior determination of damages; presumption of bad faith arises after civil remedy notice)
- Vest v. Travelers Ins. Co., 753 So.2d 1270 (Fla. 2000) (liability and extent of damages are elements of a bad-faith cause of action)
- State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So.2d 55 (Fla. 1995) (clarifies treatment of first- and third-party bad-faith and limits of retroactive application of statutes)
- McLeod v. Continental Ins. Co., 591 So.2d 621 (Fla. 1992) (interpreting recoverable damages under §624.155 and limiting consequences of bad faith)
- Allstate Indem. Co. v. Ruiz, 899 So.2d 1121 (Fla. 2005) (same discoverability and treatment for first- and third-party bad-faith; endorses abatement and protective procedures)
- Macola v. Gov’t Emps. Ins. Co., 953 So.2d 451 (Fla. 2006) (tender of policy limits does not eliminate underlying tort action or exposure to excess verdict)
- GEICO Gen. Ins. Co. v. Paton, 150 So.3d 804 (Fla. 4th DCA 2014) (discusses appellate review and prefers including total damages in final judgment while executing only policy limits)
- Safeco Ins. Co. of Ill. v. Darragh, 95 So.3d 897 (Fla. 5th DCA 2012) (appellate review of substantial UM jury verdict for errors)
- Geico Gen. Ins. Co. v. Bottini, 93 So.3d 476 (Fla. 2d DCA 2012) (addresses computation of UM damages and appellate implications)