VICTORY LAP
Contributing Authors: Dale Swope and Angela Rodante
In the seven years since her husband’s untimely death, Mary Bottini has sought justice from her automobile insurer, GEICO, which made a series of ridiculous excuses to deny and delay payment of uninsured motorist (UM) benefits she was clearly owed. Two years ago, her quest produced a cryptic court decision that threatened to upend what every Florida bad faith attorney had long understood about how bad faith claims against UM insurers are litigated, and to make the statutory remedy for bad faith so cumbersome for insureds as to defeat its very purpose.
But recently, Mary Bottini’s case produced another court opinion that undid all the havoc and uncertainty unleashed by the first one, giving auto accident and bad faith practitioners cause to breathe a long-awaited sigh of relief. With the genie put back in the bottle, Mary Bottini’s case has come full circle and vindicated the cause of policyholders who have been denied fair treatment by their insurers – a victory lap.
On March 3, 2007, 46-year-old Gerard Bottini was killed in an accident on I-75 as he was returning to Tampa from Miami. He left behind his wife, Mary, and their three children. Gerard had $50,000 of UM coverage through GEICO. When Mary attempted to collect the UM benefits for Gerard’s death, however, GEICO made a series of unfounded excuses not to pay, so Mary had to file suit. The jury, obviously unimpressed with GEICO’s defenses, found the uninsured tortfeasors 100% at fault for causing the accident and awarded over $30 million in wrongful death damages. The trial court entered a judgment for the policy limit of $50,000, and included a finding that the total damages recoverable by the estate and survivors, after setoffs, were $29.8 million.
At that time, it was common knowledge that this $29.8 figure represented the amount that Mary could recover in a future action against GEICO for bad faith. Since 1992, the damages recoverable in a bad faith action against a UM carrier have included the total damages caused by the uninsured tortfeasor, under section 627.727(10), Florida Statutes. It was widely understood that these damages are determined by the excess portion of the verdict recovered in the initial suit for UM benefits. In fact, the Supreme Court of Florida said so directly in State Farm Mutual Automobile Insurance Co. v. Laforet, 658 So. 2d 55 (Fla. 1995).
That was also GEICO’s understanding, because after the $30 million verdict was returned, it immediately set about trying to get it reduced. It filed motions for new trial and remittitur, and after those were denied, it appealed to the Second DCA. The purpose of these efforts was solely to get the verdict reduced for the impending bad faith lawsuit – GEICO knew all along that it would have to pay the $50,000 policy limits no matter how many times the case was retried, and practically admitted as much at oral argument.
Then the 2nd DCA issued a decision which upended what everyone thought they knew about bad faith in the UM context, GEICO General Insurance Co. v. Bottini, 93 So. 3d 476 (Fla. 2d DCA 2012). The actual opinion of the court is only a short paragraph, signed “per curiam,” which rejects some of GEICO’s claims of error regarding damages as being harmless in light of the evidence presented, the amount of the judgment, and “the context of this case.” A concurring opinion, however, went quite a bit further. Instead of just rejecting those alleged errors as harmless, the concurring judge opined that the court lacked jurisdiction to even consider them, because correcting them would not have affected the bottom-line amount of the judgment. Bottini, 93 So. 3d at 477 – 78 (Altenbernd, J. concurring). The concurrence also remarked that section 627.727(10) “does not explain how the finder of fact in the next lawsuit determines the ‘total amount’ of the claimant’s damages” – implying that the damages recoverable in a future bad faith case would not be set by the verdict from the UM action, but would have to be tried to a jury all over again.
GEICO took this hint and ran with it. In all of its bad faith cases arising out of UM claims, GEICO took the position that the plaintiff could not rely on the verdict from the previous UM action to set the amount of damages, so the issue of damages would have to be tried again in the bad faith case. It argued that Bottini means a UM insurer cannot have appellate review of the full amount of the verdict from the underlying UM case, so it would deprive the insurer of due process to give binding effect to that verdict. It also argued that collateral estoppel didn’t apply because a verdict isn’t a judgment, or something equally nonsensical.
GEICO’s position caught on quickly. Just two months after Bottini was decided, one federal judge issued an order accepting GEICO’s argument. King v. Gov’t Employees Ins. Co., 2012 WL 4052271 (M.D. Fla. Sept. 13, 2012). Another followed suit within a year. Harris v. GEICO Gen. Ins. Co., 2013 WL 4463836 (S.D. Fla. Aug. 7, 2013). It looked like GEICO’s goal of forcing a retrial of damages – as well a complete re-do of all discovery regarding damages – was fast becoming the rule for bad faith litigation against UM carriers.
Given that GEICO’s argument depended on the Bottini decision (particularly the concurrence), one might think it would carry even more weight in Mary Bottini’s own bad faith case. As it happened, we at Swope Rodante were brought on to tackle that very problem on behalf of Ms. Bottini.
And, I’m pleased to report, we succeeded. Just this month, the Honorable Elizabeth A. Kovachevich of the Middle District of Florida issued an order granting partial summary judgment to Ms. Bottini and ruling that the $29.8 million excess verdict from her underlying UM case is a binding determination of liability and damages. Bottini v. GEICO Gen. Ins. Co., slip op. no. 8:13-cv-365-T-17AEP (M.D. Fla. Sept. 23, 2014). The order thoroughly examines the history of the case and proceeds to take apart GEICO’s arguments one by one. Just hitting the highlights, the order holds that the damages recoverable under section 627.727(10) are determined by the verdict from the underlying UM case, GEICO was not denied appellate review of the amount of that verdict, and the verdict amount is binding through collateral estoppel. It is a well-reasoned, deep analysis that is worth reading for anyone who represents victims of auto accidents.
Judge Kovachevich’s order is also interesting for what it leaves out. Just one week earlier, the Fourth DCA had issued a decision that reached the same conclusion, GEICO General Insurance Co. v. Paton, slip op. no 4D12-4606, 2014 WL 4626860 (Fla. 4th DCA Sept. 17, 2014). We immediately filed a notice of supplemental authority citing Paton, but Judge Kovachevich’s order never cites Paton once – indicating that she had reached the same conclusion through her own independent analysis, probably before Paton was released.
Although GEICO will surely continue to press the faulty argument that succeeded in King and Harris, the combination of Paton and Judge Kovachevich’s Bottini order have put this issue to rest for all practical purposes. Bad faith litigation can once again proceed as it was intended and provide insureds a meaningful remedy when they have been treated unfairly by their UM carriers.
