Michael KING, Plaintiff-Appellant, Phyllis King, Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant-Appellee.
No. 13-14794
United States Court of Appeals, Eleventh Circuit.
Sept. 4, 2014.
796
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
Michael S. Rywant, Rywant Alvarez Jones Russo & Guyton, PA, Joseph Raymond Bryant, Morgan & Morgan, PA, James W. Clark, Attorney At Law, Lefferts Lamont Mabie, III, Lefferts Mabie, PA, Tampa, FL, for Plaintiff-Appellant.
Billy Richard Young, Adam Duke, Megan Marie Hall, Amanda L. Kidd, Young Bill Roumbos & Boles, PA, Pensacola, FL, for Defendant-Appellee.
PER CURIAM:
Michael King appeals the judgment in favor of the Government Employees Insurance Company (“GEICO“) on King‘s claim against GEICO for bad-faith failure to settle a claim, brought pursuant to
I.
Michael King was injured in a three-car accident on August 11, 2004. King was driving a vehicle owned by Donna Buttermore, a passenger in the vehicle at the
Immediately after the accident, King sought treatment and was diagnosed with lumbar strain, contusion to the right knee and left elbow, and wrist strains. Between the time of the accident and April 2006, King continued to receive medical treatment, described by the district court as follows:
Over the next eighteen months, King presented to multiple physicians. Dr. Rog, King‘s primary physician[,] referred him to Dr. Fiore, an orthopedic specialist, who recommended physical therapy and chiropractic care after reviewing a whole body bone scan and MRI which indicated degeneration in the lumbar spine. King then treated with Dr. Valdes, a chiropractor, and Dr. Garner, a neurologist. Dr. Garner identified a herniated nucleus polposus at L4-5 that made him a surgical candidate, as well as ascribing him with a 25% permanent impairment rating. She referred him to the Laser Spine Institute where he was recommended for a nerve root decompression surgery. King returned to Dr. Fiore who disagreed with immediate surgical intervention, rather suggesting that conservative care first be exhausted, although recognizing the probable necessity of surgery in the future. Finally, Dr. Turner, another orthopedic surgeon, recommended a lumbar percutaneous discectomy.
On April 13, 2006, King‘s attorney, Joseph R. Bryant, submitted offers of settlement to each of the three insurance carriers implicated in the accident. The offers recounted the medical treatment that King had received, resulting in $19,515.15 in medical bills, and that he was likely to require in the future, and advised that King had exhausted his Personal Injury Protection benefits with GEICO.1 King demanded the $100,000 liability policy limits from Liberty Mutual, $50,000 of the $100,000 liability policy limits from USAA, and the full $25,000 underinsured/uninsured motorist (“UM“) policy limits from GEICO. King then settled with USAA.
Walter Dunn, a GEICO claims examiner, reviewed King‘s UM policy limits demand and evaluated his claim. Dunn determined that the value of King‘s claim was within one of the tortfeasor‘s $100,000 policy limits. After consulting with his claims manager, Dunn advised King in a letter dated May 8, 2006, that GEICO would not make an offer under the UM policy because the value of King‘s claim was within the “within the available tort limits.”
Approximately one month later, in June 2006, King filed his initial complaint in the underlying litigation in Florida state court against GEICO and Hahto.2 At the same time, he filed a Civil Remedy Notice (“CRN“) with the Department of Insurance asserting that GEICO had not attempted to settle his claim in good faith. In response to the CRN, GEICO again denied King‘s demand for UM benefits. Later, in 2007, GEICO attempted to ten-
In July 2009, the UM claim was tried before a jury, which returned a verdict in favor of King. The jury found that King had sustained damages in the amount of $1,638,171.00,3 and determined that Hahto was fully at fault. The state court then entered a partial final judgment against GEICO on July 28, 2009, reducing the judgment amount to GEICO‘s $25,000 UM policy limits, and reserved jurisdiction over bad-faith claims. GEICO appealed, and the Florida Second District Court of Appeal issued a per curiam affirmance without a written opinion.
In April 2010, King amended his complaint to add a claim for statutory bad faith against GEICO under
King raises four main contentions on appeal, arguing that the district court erred by (1) failing to remand the bad-faith claim to state court because GEICO‘s notice of removal was not timely filed within one year of the commencement of the UM action under
II.
We review de novo the denial of a motion to remand to state court. Moore v. N. Am. Sports, Inc., 623 F.3d 1325, 1328 (11th Cir. 2010). The question whether to give preclusive effect to a state court‘s judgment is a question of law reviewed de novo. Aldana v. Del Monte Fresh Produce N.A., Inc., 578 F.3d 1283, 1288 (11th Cir. 2009). A district court‘s refusal to give a requested jury instruction is reviewed for an abuse of discretion. Burchfield v. CSX Transp., Inc., 636 F.3d 1330, 1333 (11th Cir. 2011). A court abuses its discretion if “(1) the requested instruction correctly stated the law, (2) the instruction dealt with an issue properly before the jury, and (3) the failure to give the instruction resulted in prejudicial harm to the requesting party.” Id. at 1333-34 (quotation marks omitted). We review the district court‘s evidentiary rulings for an abuse of discretion. Id. at 1333.
A. Timeliness of Removal
Federal courts are courts of limited jurisdiction. A defendant‘s right to remove an action against it from state to federal court is created and defined by statute, and removal statutes are strictly construed. Global Satellite Commc‘n Co. v. Starmill U.K. Ltd., 378 F.3d 1269, 1271 (11th Cir. 2004); Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999). Consequently, all doubts about the propriety of removal should be resolved in favor of remand. See Miedema v. Maytag Corp., 450 F.3d 1322, 1328-29 (11th Cir. 2006).
Section 1446 contains two time restrictions on removing cases from state court. See
Here, GEICO removed the bad-faith claim to federal court in April 2010, well over three years after King filed the initial complaint in state court in June 2006. As a result, King asserts, GEICO‘s notice of removal was untimely, the judgment should be vacated, and this action should be remanded to state court. GEICO responds that its notice of removal was timely because the bad-faith claim is a “separate and independent” cause of action under Florida law that was separately removable from the underlying action for purposes of
The federal district courts of Florida are divided on this question. In line with King‘s position on appeal, some courts have concluded that the action is “commenced” when the initial complaint is filed because, even if the bad-faith claim is a separate and independent claim, amending the complaint to add such a claim does not start the action anew. See, e.g., Barroso v. Allstate Prop. & Cas. Ins. Co., 958 F.Supp.2d 1344 (M.D.Fla.2013); van Niekerk v. Allstate Ins. Co., No. 12-62368, 2013 WL 253693 (S.D.Fla. Jan. 23, 2013). On the other hand, other courts have concluded, as the district court did in this case, that the action is “commenced” for purposes of
This Court previously has held that the timeliness of removal is a procedural defect, not a jurisdictional one. See Moore, 623 F.3d at 1329; Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 751-52 (11th Cir. 2010); In re Uniroyal Goodrich Tire Co., 104 F.3d 322, 324 (11th Cir. 1997) (referring to the one-year limit as procedural, not jurisdictional). The Supreme Court and the other circuits to have addressed the issue are in accord that the one-year limit on removal of diversity cases is non-jurisdictional. See, e.g., Caterpillar Inc. v. Lewis, 519 U.S. 61, 75 n. 13 (1996) (referring to a contention regarding the one-year limit in
Because it does not affect the district court‘s subject-matter jurisdiction, “[a]ny untimeliness in the filing of the notice of removal in this case would be an insufficient basis to vacate the judgment and remand for a new trial in state court.” Moore, 623 F.3d at 1329. Relying on Caterpillar, Moore indicated that the critical question on appeal, even if the district court erred in failing to remand based on the untimeliness of removal, is whether the “requirements for diversity jurisdiction were met by the time the district court entered judgment.” Id. If the district court had subject-matter jurisdiction upon entry of judgment, the untimeliness of removal is not “fatal to the ensuing litigation,” and we may review the merits of the case on appeal. See id. at 1329-30.
In this case, there is no dispute that the district court had diversity jurisdiction both at the time of removal and when the court entered judgment.5 See
B. Effect of the State-Court Excess Jury Verdict
King next contends that the district court erred by failing to give preclusive effect to the state-court jury verdict in his favor on the underlying UM claim. For purposes of determining damages on his bad-faith claim, he asserts, the district court was bound by the state-court jury verdict through collateral estoppel. Therefore, the district court erred by requiring King to litigate the issue of the “total amount of damages” during the bad-faith trial because, King argues, that issue had already been “fully litigated and determined” in the underlying action.
Florida law recognizes a statutory cause of action for a “first-party” bad-faith claim, independent of any contractual obligation, by an insured against the insured‘s own insurer for not attempting to settle claims in good faith.
Under
King contends that the legislative purpose in enacting
The parties have not identified any controlling authority providing an answer to the question King poses, and our independent review of Florida law is similarly inconclusive. Although an excess jury verdict in an underlying UM action appears to be recoverable in a subsequent first-party bad-faith action, Florida courts have not clarified how those damages are to be found or awarded. See Laforet, 658 So. 2d at 61;
Nevertheless, we need not resolve the ambiguity with respect to damages because Florida law is clear that the insurance company must be “found to have acted in bad faith” for damages to be awarded. See Laforet, 658 So. 2d at 61; Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla. 1980) (to recover damages, an insured “must first establish by legally sufficient evidence that the insurance company acted in bad faith“). Here, the jury found that GEICO did not act in bad faith in failing to settle King‘s claim. Therefore, no damages could have been awarded to King for GEICO‘s alleged bad-faith failure to settle.
We are not persuaded by King‘s speculative assertion that he was prejudiced on the merits of the action because, by being required to litigate the issue of damages, the federal jury might have based its verdict on facts inconsistent with the state-court jury. The matter in issue in the district court—whether GEICO‘s failure to settle was in bad faith—was not at issue in the state-court trial. Nor could it have been under Florida law since a bad-faith claim is a separate cause of action brought under
Moreover, even if the district court erred in allowing evidence relating to the amount of damages, any such error was
C. Requested Jury Instructions
King next contends that the district court erred in failing to give two requested jury instructions. The first requested instruction concerned recoverable damages under
Because the duty of good faith involves diligence and care in the investigation and evaluation of the claim against the insured, negligence is relevant to the question of good faith.
The instruction went on to define negligence. The district court gave the following instruction on bad faith:
Bad faith on the part of an insurance company is failing to settle a claim when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insureds and with due regard for their interests.
This is the standard instruction in Florida for a claim based on an insurer‘s bad-faith failure to settle. See Florida Standard Jury Instruction 404.4.
In support of his requested instruction, King cites to Gutierrez, 386 So. 2d at 785, and Berges v. Infinity Ins. Co., 896 So. 2d 665 (Fla. 2004). In relevant part, Berges explained an insurer‘s duty to its insured, with respect to third-party claims, as follows:
An insurer, in handling the defense of claims against its insured, has a duty to use the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business.... The insurer must investigate the facts, give fair consideration to a settlement offer that is not unreasonable under the facts, and settle, if possible, where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so. Because the duty of good faith involves diligence and care in the investigation and evaluation of the claim against the insured, negligence is relevant to the question of good faith.
The standard for determining insurer liability in this case is bad faith, rather than negligence, but “consideration may be given to the negligence of the insurer in determining whether it has breached its duty to negotiate in good faith.” Thomas v. Lumbermens Mut. Cas. Co., 424 So. 2d 36, 38 (Fla. Dist. Ct. App. 1982); see also Dadeland Depot, Inc. v. St. Paul Fire & Marine Ins. Co., 483 F.3d 1265, 1276 (11th Cir. 2007). Therefore, at least the first part of King‘s requested instruction correctly stated the law regarding an issue properly before the jury.
Nevertheless, we cannot say, considering the totality of the circumstances, that the failure to give the requested negligence instruction resulted in prejudicial harm to King. See Burchfield, 636 F.3d at 1334. The jury was properly instructed on the standard for bad faith, which King does not contest. While King‘s proposed instruction may have assisted the jury in deciding the question of bad faith, it also may have had the opposite effect of confusing the jury by implying that the jury could find GEICO liable even if it found GEICO only negligent in failing to settle.
King‘s reliance on Tran v. Toyota Motor Corp., 420 F.3d 1310 (11th Cir. 2005), and Palm Beach Atlantic College, Inc. v. First United Fund, Ltd., 928 F.2d 1538 (11th Cir. 1991), to suggest that reversal is required because the jury instruction did not discuss negligence is likewise misplaced. Unlike in Tran and Palm Beach Atlantic College, Inc., the district court here did not fail to give an instruction on an independent basis for liability. Nor did the court misstate the applicable burden of proof. The court‘s instruction on bad faith also did not preclude King from making relevant arguments regarding GEICO‘s duty to investigate and evaluate King‘s claim. Accordingly, the district court did not abuse its discretion in refusing to give the negligence instruction.
D. Admission of Evidence
Finally, King argues that the court erred in selectively admitting evidence about the handling of King‘s claim by Liberty Mutual. During the trial, the district court allowed GEICO‘s counsel to elicit testimony from its employees that Liberty Mutual‘s evaluation and adjustment of King‘s claim were consistent with GEICO‘s. But the court did not allow King‘s counsel to elicit testimony that Liberty Mutual settled King‘s claim by paying its policy limits as well as bad-faith damages. A district court‘s evidentiary ruling will not be overturned “unless the moving party establishes a substantial prejudicial effect.” Burchfield, 636 F.3d at 1333 (quotation marks omitted). We afford broad discretion to the district court‘s assessment of the probative value of the proffered evidence weighed against other factors counseling against admissibility. Sprint/United Mgmt. Co. v. Mendelsohn, 552 U.S. 379, 384 (2008).
The testimony regarding Liberty Mutual‘s evaluation and adjustment of King‘s claim was probative of GEICO‘s assessment of the claim and its stated reason for denying King‘s initial settlement offer: that the value of King‘s claim was within the available policy limits of the tortfeasor‘s insurance company. See USAA Cas. Ins. Co. v. Shelton, 932 So. 2d 605, 608 (Fla. Dist. Ct. App. 2006) (“The purpose of [UM coverage] is to provide a source of recovery when the insured has been injured by a tortfeasor with insufficient or
VI.
For the foregoing reasons, we affirm the judgment of the district court.
AFFIRMED.