Camacho v. Nationwide Mutual Insurance
13 F. Supp. 3d 1343
N.D. Ga.2014Background
- Automobile accident in which Nationwide insured Park ran a red light, killing Stacey Camacho; policy limits were $100,000 per person/$300,000 per accident.
- Plaintiffs Camacho and Nichols, administrators/estate representatives, alleged bad-faith failure to settle within policy limits, exposing Park to a $5.83 million excess jury verdict.
- Park assigned his post-verdict claims against Nationwide for negligent and bad-faith handling to Plaintiffs after the state-court judgment.
- Nationwide moved for summary judgment on good-faith rejection of a policy-limits demand and to exclude Plaintiffs’ expert on claims handling.
- Nationwide’s settlement efforts included a March 2006 full offer for policy limits with a general release, and an April 18, 2006 demand for a policy-limits settlement with a limited release; Nationwide eventually offered on June 9, 2006 to settle with a limited release after Park’s authorization.
- Following trial court rulings, the state court entered a $5.83 million verdict against Park (2009); Park assigned claims to Plaintiffs in 2011.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Nationwide acted in bad faith by refusing a policy-limits settlement | Camacho/ Nichols argue clear liability and excess damages; Holt requires equal consideration to insured’s interests. | Nationwide offered limits; Plaintiffs demanded a limited release and time constraints; not bad faith under Holt. | Issue for jury; summary judgment denied for bad-faith failure to settle. |
| Whether the April 18, 2006 demand was a definite offer capable of acceptance | Letter supported settlement for policy limits; contemplated full settlement of all claims. | Demand was ambiguous, split between claims and releases; not definite. | Offer was legally acceptable when read in context; settlement possible. |
| Whether Nationwide had a reasonable opportunity to settle given the demand terms | Nationwide knew damages exceeded limits and could have acted sooner. | Time window reasonable; offer open for a period; required review and release terms. | Question for jury; not entitled to judgment as a matter of law. |
| Whether Nationwide acted in the insured’s best interests by insisting on a general release | Insurer gambled with insured’s funds, prioritizing its own interests. | General release offered greater protection; limited release could be viable depending on UM/UIM. | Jury to decide reasonableness; not per se improper as a matter of law. |
| Whether Plaintiffs can pursue tort claims for insurer’s negligent claims handling independent of bad faith | There can be an independent tort duty not to gamble with insured’s funds. | Unclear independent duty; generally contract-based claims. | Summary judgment granted in part; negligent handling barred except to the extent duplicative of bad-faith claim. |
Key Cases Cited
- Fortner v. Grange Mut. Ins. Co., 286 Ga. 189 (Ga. 2009) (bad faith possible when excess verdict risks insurer’s insured)
- Brightman v. Cotton States Mut. Ins. Co., 276 Ga. 683 (Ga. 2003) (safe harbor when insurer can tender within limits or address liens)
- Gingold v. Government Employees Ins. Co., 288 S.E.2d 552 (Ga. 1982) (excess settlement duty and deadline nuance)
- Holt v. South.Gen. Insurance Co., 416 S.E.2d 274 (Ga. 1992) (insurer must consider insured’s interests; deadline negotiation)
- Delancy v. St. Paul Fire & Marine Ins. Co., 947 F.2d 1536 (11th Cir. 1991) (negligence vs. bad-faith in settlement claims; possible extra-contractual duty)