Suzanne Harvey, etc. v. Geico General Insurance Company
259 So. 3d 1
Fla.2018Background
- On Aug. 8, 2006 James Harvey, insured by GEICO with $100,000 liability limits, caused a collision that killed John Potts; the estate later obtained an $8.47 million judgment against Harvey.
- GEICO tendered policy limits to the estate nine days after the accident, but the estate had requested a recorded statement about Harvey’s assets; GEICO adjuster Fran Korkus delayed or failed to communicate that request and did not timely relay Harvey’s availability.
- The estate’s attorney testified he would have delayed filing suit and likely recommended accepting policy limits if he had known Harvey planned to provide a statement about assets.
- At trial on Harvey’s bad‑faith claim, a jury found GEICO acted in bad faith; trial court entered a $9.2 million judgment for Harvey; GEICO’s JNOV was denied.
- The Fourth District reversed, holding the evidence insufficient to prove bad faith and concluding insurer liability is defeated where the insured’s own actions at least in part cause the excess judgment.
- Florida Supreme Court granted review, quashed the Fourth District, and remanded to reinstate the jury verdict, finding the lower court misapplied Florida bad‑faith precedent and the directed‑verdict standard.
Issues
| Issue | Plaintiff's Argument (Harvey) | Defendant's Argument (GEICO) | Held |
|---|---|---|---|
| Sufficiency of evidence that insurer acted in bad faith by failing to settle | GEICO’s adjuster mishandled communications, failed to facilitate a statement, and did not act with required care and diligence; jury verdict supported by substantial evidence | GEICO tendered policy limits promptly, warned insured, advised him to get counsel, and did what was required; any shortcomings were mere negligence not bad faith | Reversed Fourth District: evidence was sufficient under the directed‑verdict standard to support bad‑faith finding when viewed in favor of the nonmoving party |
| Applicability of Boston Old Colony / Berges duties | Those precedents impose a fiduciary duty requiring insurers to act with care, diligence, urgency and with due regard for insured’s interests; insurer’s overall conduct (not checklist) governs | GEICO argued it satisfied the enumerated Boston Old Colony obligations (investigate, warn, tender limits) and so no bad faith as matter of law | Court reaffirmed Boston Old Colony and Berges, holding lower court misapplied them by treating obligations as a checklist and by deferring to nonbinding federal precedent |
| Causation: whether insured’s own conduct (in part) bars insurer liability | Causation focuses on whether insurer’s bad faith substantially contributed to excess judgment; insured’s actions do not automatically defeat insurer liability | GEICO argued that because Harvey/attorney had or could have provided asset info, insured’s conduct partly caused the excess judgment and therefore insurer cannot be liable | Rejected Fourth District’s rule; Florida law requires causal connection to insurer’s bad faith but does not create a contributory‑negligence shield when insurer acted in bad faith |
| Proper role of federal (Eleventh Circuit) authority in interpreting Florida bad‑faith law | Florida precedent controls; nonbinding federal cases that misread Florida law should not displace state decisions | GEICO and Fourth District relied in part on Eleventh Circuit decisions minimizing insurer duties | Court held Eleventh Circuit authority was inapposite and cannot override Florida Supreme Court precedent on insurer duties |
Key Cases Cited
- Boston Old Colony Ins. Co. v. Gutierrez, 386 So.2d 783 (Fla. 1980) (articulates insurer’s duty to use care and diligence, to advise insured of settlement opportunities, warn of excess judgment, investigate, and settle if a reasonably prudent person would)
- Berges v. Infinity Ins. Co., 896 So.2d 665 (Fla. 2004) (reaffirms insurer’s fiduciary obligation to act in insured’s best interests and that bad‑faith inquiry rests on totality of circumstances)
- Perera v. U.S. Fidelity & Guar. Co., 35 So.3d 893 (Fla. 2010) (damages in bad‑faith claim must be caused by insurer’s bad faith)
- Powell v. Prudential Prop. & Cas. Ins. Co., 584 So.2d 12 (Fla. 3d DCA 1991) (where liability and likelihood of excess judgment are clear, insurer has affirmative duty to initiate settlement negotiations)
- State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So.2d 55 (Fla. 1995) (contextual discussion cited by federal court but not dispositive of elements of bad faith under Florida law)
- Goheagan v. American Vehicle Ins. Co., 107 So.3d 433 (Fla. 4th DCA 2012) (delay in offering when exposure is a "ticking financial time bomb" may support bad‑faith finding)