Lead Opinion
GEICO Casualty Company seeks certio-rari review of the trial court’s “Order on Plaintiffs Motion to Amend Pleadings and Defendant’s Motion for Entry of Final Judgment.” We grant the writ and quash the order.
In February 2009, Antonio Barber filed a complaint against GEICO for uninsured/underinsured motorist (“UM”) benefits following an automobile accident. He also filed a Civil Remedy Notice (“CRN”) as authorized by section 624.155, Florida Statutes (2008), alleging that he sustained serious and permanent injuries exceeding his UM policy limits. GEICO answered the complaint and responded to the CRN, stating that based on its investigation, which included a review of Barber’s medical records, it would not offer policy limits.
After, learning Barber had undergone surgery several years later, GEICO served a policy limits proposal for settlement pursuant to Florida Rule of Civil Procedure 1.442 and section 768.79, Florida Statutes (2008). Barber did not accept the proposal. GEICO then filed a “Notice of Confession of Judgment and Motion for Entry of Confessed Judgment” stating:
Defendant GEICO CASUALTY COMPANY hereby confesses judgment to the Plaintiff for its policy limits of TenThousand Dollars ($10,000.00) in lieu of the pending jury trial as all issues as framed by the pleadings are rendered moot. See Safeco Insurance Company of Illinois v. Adrian Fridman, 117 So.3d 16 (Fla. 5th DCA 2013).
Before the trial court ruled on GEICO’s motion to enter judgment, Barber filed a motion to amend his complaint to assert separate claims for uninsured motorist benefits, violations of section 624.155, Florida Statutes (2008), and a declaratory judgment to determine liability and the total amount of damages he sustained in the accident. Following several hearings, the trial court entered an order, granting GEICO’s motion to enter final judgment on the UM claim based on its confession of judgment. The court also granted Barber’s motion to amend pleadings to add a count for declaratory relief, but found Barber’s request to add a bad faith claim was not ripe. As a result, Barber filed a second amended complaint, seeking only a declaratory judgment to determine the “apportionment of liability, if any and ... the total amount of damages suffered by [Barber].” The trial court allowed Barber to file his second amended complaint and GEICO now petitions this Court for review.
Relying on this Court’s decision in Safeco Insurance Co. v. Fridman,
As we explained in Fridman,
An action to recover UM benefits is based on a contract but it has its underpinnings in tort liability. Mercury Ins. Co. of Fla. v. Moreta,957 So.2d 1242 , 1251 (Fla. 2d DCA 2007). Where no dispute exists as to the policy limits or available coverage and such limits are made known to the insured, the amount of the judgment against the insurer may not exceed the policy limits. Nationwide Mut. Fire Ins. Co. v. Voigt,971 So.2d 239 , 242 (Fla. 2d DCA 2008).
A first party bad faith action is a separate and distinct cause of action. Allstate Ins. Co. v. Jenkins,32 So.3d 163 , 165 (Fla. 5th DCA 2010). In contrast to a claim for UM benefits, an insured who prevails on a bad faith claim may recover damages in excess of the policy limits.
In the instant case, the only cause of action before the trial court was Frid-man’s UM claim. Fridman had appropriately not included a bad faith count in his complaint. See Jenkins,32 So.3d at 165 (“[B]ad faith action is more appropriately brought as a separate cause of action.”); see also Gov’t Emps. Ins. Co. v. King,68 So.3d 267 , 270 n. 3 (Fla. 2d DCA 2011) (en banc) (expressly agreeing with Jenkins that bad faith claim should be brought as separate cause of action). Accordingly, when Safeco agreed to the entry of a judgment against it in the amount of the policy limits, the issues between the parties, as framed by the pleadings, became moot because the trial court could not provide any further substantive relief to Fridman. Godwin v. State,593 So.2d 211 , 212 (Fla.1992) (“An issue is moot when the controversy has been so fully resolved that a judicial determination can have no actual effect.”). Safeco was, in fact, agreeing to the precise relief sought by Fridman in his complaint. Thus, it was error for the trial court torequire the parties to proceed to trial. See, e.g., Wollard v. Lloyd’s & Cos. of Lloyd’s, 439 So.2d 217 (Fla.1983) (where statute provided for recovery of attorney’s fees upon entry of judgment in favor of insured against insurer, insured was not required to continue litigation where insurer had paid claim; payment of claim was functional equivalent of confession of judgment). Instead, the trial court should have merely entered the confessed judgment in favor of Frid-man, reserving jurisdiction to award costs, prejudgment interest, and, if authorized by law, reasonable attorney’s fees. See Westgate Miami Beach, LTD. v. Newport Operating Corp.,55 So.3d 567 , 575 (Fla.2010).
Although the court only had jurisdiction to enter the confessed judgment, Barber is not precluded from litigating the damages issue on his bad-faith claim, as the judgment entered in this case based on GEICO’s contractual obligations under the policy is separate and distinct from Barber’s claim for bad faith. See Harris v. Geico Gen. Ins. Co.,
For these reasons, we quash the order on review.
PETITION GRANTED; WRIT ISSUED; ORDER QUASHED.
Dissenting Opinion
dissenting.
The decision in Safeco Insurance Co. v. Fridman,
Fridman is distinguishable because in that case, there was never any attempt to amend the plaintiffs complaint to allege a cause of action for bad faith after Safeco tendered its policy limits. But in the instant case, after GEICO tendered the full amount of its policy limits (some four years into the litigation) the Respondent, Antonio Barber (who was the plaintiff in the trial proceedings), filed a motion to amend his complaint to add a count for bad faith and a count for declaratory judgment. This motion was made before the trial court heard GEICO’s motion for judgment wherein GEICO cited to Fridman and alleged that it had confessed judgment and requested entry of a judgment in favor of Barber in the amount of the tendered policy limits. In fact, both motions were heard simultaneously. The trial court denied Barber’s motion to amend the complaint to add a bad-faith count, but granted the motion to add the declaratory judgment count.
In a case strikingly similar to the instant case, the court in Safeco Insurance Co. of Illinois v. Rader,
Thus, pursuant to Rader, the trial court should have granted Barber’s motion to amend to include a count for bad faith. Instead, the trial court denied that motion and granted the motion to amend to include a count for declaratory relief. If this was error, the error can certainly be corrected on appeal. The courts have clearly and consistently held that an appellate court can only grant a petition for certiora-ri when it is established that there is “ ‘(1) a departure from the essential requirements of the law, (2) resulting in material injury for the remainder of the case (3) that cannot be corrected on postjudgment appeal.’ ” Rodriguez v. Miami-Dade Cnty.,
The threshold question that must be, reached first [when determining whether to grant certiorari] is whether there is a material injury that cannot be corrected on appeal, otherwise termed as irreparable harm. Only after irreparable harm has been established can an appellate court then review whether the petitioner has also shown a departure from the essential requirements of law.
Id. at 404 (citation omitted); see also Rader,
In Laforet, the insured was injured in an automobile accident and carried UM coverage in the amount of $200,000 through a policy issued by State Farm. The insured filed a UM case against State Farm, which offered $40,000 to settle the claim. That offer was refused by the insured. The case proceeded to trial, resulting in a jury verdict in the insured’s favor for damages in the amount of $400,000. With the verdict in hand, the insured filed a bad-faith action against State Farm. At the time this suit was filed, section 627.727(10) had not been enacted. Therefore, the jury returned a verdict that did not include the excess amount as damages. On the same day the verdict was returned, section 627.727(10) became effective, so the insured filed a motion for additur to include the excess amount of the damages determined in the underlying UM case. That motion was granted. State Farm appealed, claiming that the statute should not be retroactively applied.
The court analyzed section 627.727(10) to determine whether it could be applied retroactively to causes of action that accrued prior to its enactment. Through that analysis, the court twice determined that the amount in excess of the policy limits is established in the original UM case. The court stated:
Section 627.727(10) provides that the damages recoverable from an uninsured motorist insurance carrier in a bad faith action brought under section 624.155 and the 1990 amendment thereto shall include the total amount of a claimant’s damages, including any amount in excess of the claimant’s policy limits awarded by a judge or jury in the underlying claim.
Laforet,
section 627.727(10) became law. That statute provides that the damages recoverable from an uninsured motorist carrier in a bad faith action filed under section 624.155, such as the one at issue here, are to include the total amount of the claimant’s damages, including any amount awarded in the underlying claim in excess of the claimant’s policy limits.
Id. at 57 (emphasis added). The court then explained that the issue of retroactivity was determinative because “under the retroactive application of the new statute, State Farm was liable for the entire excess judgment awarded to the Laforets in their original case against State Farm.” Id. (emphasis added). Thus, the court in La-foret made it clear that application of section 627.727(10) requires that, in a bád-faith action, the court shall award the excess amount determined in the underlying UM case.
The court in Laforet also determined that the provision in the statute “the amount in excess of the policy limit” means the excess amount determined in the original UM case. Id. at 60. Similarly, in McLeod v. Continental Insurance Co.,
McLeod appealed, arguing that the trial court erred in not granting his motion for directed verdict or, in the alternative, by refusing to instruct the jury that McLeod’s damages were fixed at the $200,000 shortfall between all available insurance coverage and the amount of the verdict in the wrongful death action. This amount is commonly referred to as the “excess judgment” and is an available remedy in third-party bad faith actions.
Id. at 623 (emphasis added) (footnote omitted).
Once Barber served his Civil Remedy Notice under section 624.155(3)(a), Florida Statutes (2008), as a condition precedent to bringing a bad-faith action, GEICO had sixty days to pay the damages owed and cure the alleged violation. § 624.155(3)(d), Fla. Stat. (2008). In Talat Enterprises, Inc. v. Aetna Casualty & Surety Co.,
The majority states that the bad-faith action is independent of the underlying UM case. But that is because the issues in the bad-faith action are different from the issues in the underlying UM case. The issues in the UM case are whether the tortfeasor breached a duty of care that caused damages and the extent of those damages. Florida Standard Jury Instruction (Civil) 404.7 sets forth the pertinent issues in bad-faith claims against insurers as follows: “The issue you must decide on (claimant’s) claim against (defendant) is whether (defendant) acted in bad faith in failing to settle the claim [of] [against] (insured) [and, if so, whether that bad faith was a legal cause of [loss] [damage] [or] [harm] to (claimant) ].” The Note on Use for this instruction recognizes that in a bad-faith action, the damages in excess of the policy limits are assessed by the jury in the uninsured/underinsured motorist action: “For cases in which the court will determine damages, or the only damages are those already determined in the underlying action, omit the bracketed phase [sic] on causation. If the issue of damages is being submitted to the jury for determination, then the entire instruction should be given.” Fla. Stat. Jury Instr. (Civ.) 404.7 (Note on Use) (emphasis added). The issues in the bad-faith action should not include the issue of damages suffered as a result of the tortfeasor’s negligence because the evidence is different. There is too great a danger that the evidence of the insurer’s claim file and evidence of its bad faith in failing to fairly settle the claim and pay the insured the benefits owed to him or her under the policy would unduly prejudice the jury in its determination of the amount of the damages inflicted on the insured by the tortfeasor, and this is why the damage issues should not be tried in the bad-faith action.
I believe that this court in Fridman and the majority in the instant case misapply the confession of judgment doctrine. The only case cited in Fridman relating to the confession of judgment issue is Wollard v. Lloyd’s & Cos. of Lloyd’s,
Section 627.428 provides for the award of attorney’s fees to an insured upon the rendition of a judgment against an insurer in an action between the insurer and its insured. § 627.428, Fla. Stat. “By using the legal fiction of a ‘confession of judgment,’ our supreme court extended the statute’s application” to cases in which the insurer settles or pays a disputed claim before rendition of judgment. Basik Exports & Imports, Inc. v. Preferred Nat’l Ins. Co.,911 So.2d 291 , 293 (Fla. 4th DCA 2005) (citing Wollard v. Lloyd’s & Cos. of Lloyd's,439 So.2d 217 (Fla.1983)). When the insurer has agreed to settle a disputed case, “it has, in effect, declined to defend its position in the pending suit,” and its“payment of the claim is ... the functional equivalent of a confession of judgment or a verdict in favor of the insured.” Wollard) 439 So.2d at 218 . For the confession of judgment doctrine to apply, the insurer must have unreasonably withheld payment under the policy, id. at 219 n. 2, or engaged in some other wrongful behavior that forced the insured to sue, Gov’t Emps. Ins. Co. v. Battaglia,503 So.2d 358 , 360 (Fla. 5th DCA 1987); see also Jerkins v. USF & G Specialty Ins. Co.,982 So.2d 15 , 17 (Fla. 5th DCA 2008). This Court has described the rationale for the confession of judgment doctrine as follows:
[T]he statutory obligation for attorney’s fees cannot be avoided [by the insurer] simply by paying the policy proceeds after suit is filed but before a judgment is actually entered because to so construe [section 627.428, Florida Statutes,] would do violence to its purpose, which is to discourage litigation and encourage prompt disposition of valid insurance claims without litigation.
Gibson v. Walker,
Thus the confession of judgment doctrine is intended to penalize the insurer for causing its insured to resort to litigation when it should have previously paid the benefits due under the policy. And when the insurer subsequently attempts to pay the benefits, a legal fiction is indulged that transforms the tender of benefits or settlement offer into a judgment that forms the basis for an award of fees under section 627.428. Despite the purpose of the doctrine, this court in Fridman has utilized this legal fiction to penalize insureds by taking away their right to have a jury decide the full measure of their damages in the UM cáse and further penalizing them by requiring them to file a new lawsuit to litigate the same damage issues all over again. I believe this is an improper use of the confession of judgment doctrine.
I do not believe that the UM and bad-faith statutes were intended to allow insurers to treat their insureds in the manner that the insureds in Fridman and the instant case have been treated. The injured insureds in both cases spent several years litigating the damage issues in the UM cases each filed, only to have the insurers tender the policy limits and eliminate their right to continue on with the litigation so
Notes
. Even GEICO implicitly recognizes that the alleged error in granting the motion to amend may be corrected on appeal, so in order to avoid that jurisdictional hurdle, GEICO alleges it will suffer irreparable harm because the trial court order allowing the amendment deprives GEICO of its right to remove the state court action to federal court. I believe that this argument has little merit. This court has held that certiorari would not lie to protect a litigant’s right to remove a state court action to federal court. Cont'l Baking Co. v. Vincent,
a defendant may only remove within thirty days of receiving the initial pleading or service of summons. In a case not originally removable, a defendant may only remove within thirty days of receiving "an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which ... has become removable.” 28 U.S.C. § 1446(b)(3). However, a case removed based on diversity jurisdiction that was not initially removable may not be removed more than one year after the commencement of the action.
Barroso v. Allstate Prop. & Cas. Ins. Co.,
In Bollinger v. State Farm Mutual Insurance Co.,