Noonan v. Vermont Mutual Insurance
761 F. Supp. 2d 1330
M.D. Fla.2010Background
- Motorcycle accident on Oct. 17, 2005; Robbins (Allstate insured) caused collision with Mr. Noonan; Robbins’ liability policy limit was $100,000 per person under Allstate; Vermont Mutual (defendant) was excess insurer with $100,000 per person limit; Allstate tendered its policy limit and defendant conducted its own investigation; medical bills/records were requested multiple times and not supplied promptly; consent judgment awarded Robbins $1,450,000 and assigned the bad faith claim to plaintiffs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law governing bad faith claim | Florida law applies (place of performance) | Vermont law governs as the excess carrier and handling occurred in Vermont | Florida law controls the bad faith issue |
| Whether Defendant acted in bad faith | Defendant delayed settlement despite clear liability and damages. | Defendant acted diligently; delay caused by lack of medical documentation from plaintiffs | No bad faith; summary judgment for defendant |
| Impact of delay in tendering policy limits | Delay was willful and prejudicial to insured | Delay due to need for medical information; not willful misconduct | Delay not willful; no bad faith found |
| Summary judgment appropriateness on bad faith claim | Disputed facts require trial | Undisputed facts show no bad faith | Summary judgment for defendant on bad faith claim |
Key Cases Cited
- Geico General Insurance Co. v. McDonald, 315 Fed.Appx. 181 (11th Cir.2008) (bad faith focus on insurer's duty and reasonable settlement when liability is clear)
- Peckham v. Continental Casualty Insurance Co., 895 F.2d 830 (1st Cir.1990) (bad faith as shield for insured, not a tool for claimants to manufacture damages)
- Goverment Employees Insurance Co. v. Grounds, 332 So.2d 13 (Fla. 1976) (place of performance governs insurance contract performance for bad faith)
- Adams v. Fidelity & Cas. Co., 920 F.2d 897 (11th Cir.1991) (choice-of-law principles for performance in Florida)
- Johnson v. Geico General Ins. Co., 318 Fed.Appx. 847 (11th Cir.2009) (insurer may take reasonable time to investigate; not obligated to tender before investigation)