Carlos Mesa v. Clarendon National Insurance Company
2015 U.S. App. LEXIS 15203
| 11th Cir. | 2015Background
- On April 3, 2006, Mesa (third-party claimant) was injured in an auto accident caused by Zelaya; Zelaya was a permissive driver under Martinez’s Clarendon policy with $10,000 per-person / $20,000 per-accident BI limits.
- Clarendon was notified April 24, 2006, opened a claim file, hired RAC to investigate, and retained attorney Lew Jack to pursue a global settlement among four claimants.
- Clarendon did not dispute liability and offered the full $20,000 per-accident limit to attempt a global settlement; other claimants agreed to divide the $20,000 equally, but Mesa refused an offer of $10,000 and filed suit June 22 (service to Clarendon Aug. 4).
- Clarendon communicated with claimants through Jack, attempted settlement negotiations, and tendered $10,000 to Mesa via Jack in August (Mesa rejected); Martinez (named insured) was never served; Zelaya later suffered a $750,000 excess judgment.
- Mesa sued Clarendon for bad faith in state court (removed to federal court); district court granted Clarendon summary judgment finding no bad faith; Eleventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Clarendon act in bad faith by failing to settle Mesa’s claim? | Mesa: insurer had opportunity and should have settled to avoid excess judgment. | Clarendon: pursued reasonable global settlement given multiple claimants and limited limits. | No bad faith; global settlement efforts reasonable. |
| Did Clarendon negligently fail to investigate/diligently handle claims? | Mesa: insurer breached duty to investigate and promptly resolve. | Clarendon: opened file, hired adjuster and counsel quickly and investigated. | Investigation and settlement efforts were sufficient as a matter of law. |
| Did Clarendon fail to advise insured of settlement options/excess exposure? | Mesa: insurer failed to warn insured of excess-judgment risk and options to avoid it. | Clarendon: communications were adequate and lack of advice did not cause the excess judgment. | Even if advice was deficient, plaintiff failed to show causation to the excess judgment. |
| Is bad-faith determination a jury question here under totality-of-circumstances? | Mesa: factual disputes warrant jury decision. | Clarendon: record lacks material dispute; summary judgment appropriate. | Court: no genuine issue for jury; summary judgment for Clarendon affirmed. |
Key Cases Cited
- Berges v. Infinity Ins. Co., 896 So. 2d 665 (Fla. 2004) (sets insurer duty-of-good-faith standard and totality-of-circumstances test)
- Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783 (Fla. 1980) (insurer must investigate, advise insured of settlement opportunities and excess-judgment risk)
- Farinas v. Fla. Farm Bureau Gen. Ins. Co., 850 So. 2d 555 (Fla. Dist. Ct. App. 2003) (insurer may pursue reasonable global settlements when multiple claimants exist)
- Campbell v. Gov’t Emps. Ins. Co., 306 So. 2d 525 (Fla. 1975) (distinguishes negligence from bad faith; bad faith requires more than negligence)
- Perera v. U.S. Fid. & Guar. Co., 35 So. 3d 893 (Fla. 2010) (bad-faith claim requires causal connection between insurer misconduct and claimed damages)