30 F.4th 1055
11th Cir.2022Background
- Erika McNamara (driver) caused serious injury to Deborah Bennett while driving Willard Warren’s vehicle; Warren had GEICO bodily-injury coverage with a $100,000 per-person limit.
- Bennett served proposals under Fla. Stat. § 768.79 demanding consent judgments: $474,000 against Warren and $4,740,000 against McNamara, conditioned on the insureds’ consent to judgments and GEICO’s assurance it would not claim a policy breach for accepting them.
- GEICO informed counsel it would not assert a policy breach if the insureds accepted; the insureds accepted and the state court entered stipulated (consent) final judgments exceeding the policy limit.
- Warren and McNamara sued GEICO for third-party bad faith seeking the excess amounts; GEICO obtained summary judgment in district court relying on this Court’s unpublished Cawthorn decision.
- The Eleventh Circuit reversed: it held that under Florida law an excess judgment that proves causation for a bad-faith claim may be a consent (stipulated) final judgment—not only a verdict-based judgment—and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a consent (stipulated) final judgment can constitute an “excess judgment” to satisfy causation in a third-party bad‑faith claim | Warren/McNamara: Florida law allows a final judgment from settlement/ stipulation to be an excess judgment and thus prove causation | GEICO: An “excess judgment” must arise from a verdict at trial (per Cawthorn); consent judgments cannot qualify | The court held a final judgment exceeding coverage — including a consent judgment — can be an excess judgment to prove causation under Florida law |
| Whether the unpublished Eleventh Circuit decision Cawthorn is binding or persuasive | Plaintiffs: Cawthorn misreads Florida law and is not binding | GEICO: District court relied on Cawthorn to bar the bad-faith claim | The court explained unpublished opinions are not binding, found Cawthorn’s analysis incorrect, and declined to follow it |
Key Cases Cited
- Boston Old Colony Ins. Co. v. Gutierrez, 386 So.2d 783 (Fla. 1980) (recognizes insurer’s duty of good faith and outlines elements of third‑party bad‑faith claim)
- United Servs. Auto. Ass’n v. Jennings, 731 So.2d 1258 (Fla. 1999) (discusses excess‑judgment concept and treats stipulated judgments as having effect similar to trial judgments)
- Perera v. United States Fid. & Guar. Co., 35 So.3d 893 (Fla. 2010) (clarifies causation requirement and notes excess judgment is a straightforward means to prove causation)
- Fridman v. Safeco Ins. Co., 185 So.3d 1214 (Fla. 2016) (holds insured need not obtain a verdict and may use settlement or stipulation to determine liability/damages prior to a bad‑faith claim)
- Cawthorn v. Auto‑Owners Ins. Co., [citation="791 F. App'x 60"] (11th Cir. 2019) (unpublished panel opinion holding an excess judgment must result from a verdict — rejected as unpersuasive here)
- Pelaez v. GEICO, 13 F.4th 1243 (11th Cir. 2021) (recognizes that a stipulated judgment can produce an excess judgment under Florida law)
- Steil v. Fla. Physicians’ Ins. Reciprocal, 448 So.2d 589 (Fla. 2d DCA 1984) (consent judgments enforceable against insurer if reasonable and not tainted by bad faith)