Esperanza Garcia v. Geico General Insurance Company
2015 U.S. App. LEXIS 14532
11th Cir.2015Background
- Miguel rented a car from Enterprise with a rental agreement and collision waiver expressly limiting permission to Miguel alone; violation terminated coverage/contract.
- Edgar (Miguel's brother) drove the rental car, caused a fatal collision with Paola Penafiel, and had a GEICO policy that covered driving another's car with the owner's permission or a reasonable belief of permission.
- Enterprise told GEICO Edgar lacked permission; GEICO denied coverage. Garcia (personal representative of Penafiel) obtained a Coblentz judgment against Edgar and sued GEICO for bad faith for denying coverage.
- District court initially rejected Garcia's "implied consent" theory (that permission from the owner to an initial driver can be imputed to a third party) and found GEICO had not unreasonably believed coverage was lacking; this court reversed after the Florida Supreme Court in Chandler adopted implied consent.
- On remand, the district court entered coverage for Garcia; at the bad-faith trial the court excluded GEICO's proffered evidence that earlier federal/state decisions and the district court's prior ruling agreed with GEICO (and related post-decision state appellate authority) as well as related expert testimony.
- The jury found for Garcia on bad faith; the Eleventh Circuit held the exclusion of those legal-authority materials and related expert reliance was erroneous, vacated the judgment, and remanded for a new trial.
Issues
| Issue | Garcia's Argument | GEICO's Argument | Held |
|---|---|---|---|
| Admissibility of prior judicial decisions and subsequent state cases bearing on coverage-reasonableness | Excluding post-denial decisions or prior rulings is proper because insurer couldn't have relied on later cases; such rulings shouldn't be given dispositive weight | Prior rulings and related state decisions are relevant to whether GEICO's coverage denial was reasonable and thus admissible | Evidence of earlier judicial agreement with GEICO and of the legal development (including Chandler) was relevant; exclusion was error |
| Expert may discuss those authorities | Bar such evidence as improper bolstering of expert credibility | Expert may rely on judicial decisions as facts/data supporting opinion under FRE 703/705; such reliance is not improper bolstering | Exclusion as "bolstering" was legal error; the evidence went to reasonableness, not witness credibility |
| Temporal relevance: can insurer use opinions issued after its coverage decision to show reasonableness | Post-decision opinions are temporally irrelevant and cannot justify insurer's conduct | Even if insurer couldn't have relied on later opinions at the time, the existence of contemporaneous judicial support and later clarifying opinions bears on objective reasonableness | Court agreed insurer cannot rely on decisions that did not exist at the time to justify actions, but could introduce evidence showing the dispute was legally unsettled and that some courts agreed with GEICO; excluding such evidence was improper |
| Harmless error / prejudice from exclusion | Exclusion was harmless because jury found bad faith on independent investigative/settlement factors | Exclusion substantially prejudiced GEICO because those factors depend on whether coverage existed; jurors would find flux in law highly relevant | Exclusion was not harmless and likely prejudicial; requires new trial |
Key Cases Cited
- Geico Indem. Co. v. Shazier, 34 So. 3d 42 (Fla. Dist. Ct. App.) (court rejecting implied-consent doctrine prior to Florida Supreme Court clarification)
- Chandler v. Geico Indem. Co., 78 So. 3d 1293 (Fla. 2011) (Florida Supreme Court adopted/clarified implied-consent doctrine and quashed Shazier)
- Robinson v. State Farm Fire & Cas. Co., 583 So. 2d 1063 (Fla. Dist. Ct. App.) (reasonableness of insurer's denial may consider weight of legal authority)
- Harbison v. American Motorists Ins. Co., 636 F. Supp. 2d 1030 (E.D. Cal. 2009) (district court refused to give post-decision ruling dispositive effect but did not bar admission of such rulings)
- Hearn v. McKay, 603 F.3d 897 (11th Cir. 2010) (standard for harmless error review)
- Borden, Inc. v. Fla. E. Coast Ry. Co., 772 F.2d 750 (11th Cir. 1985) (admissibility in diversity cases governed by federal law)