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Geico Gen. Ins. Co. v. Kelly Paton, Case No. 4D12-4606 (Fla. 4th DCA)

In Paton, the Fourth DCA addressed whether, in a first party bad faith trial, the plaintiff was required to once again prove damages, instead of relying on the jury’s damage determination in the first trial, which established the liability of the tortfeasor. The plaintiff was injured in a car accident, and later brought suit against her underinsured carrier, Geico, after Geico refused to settle for policy limits of $100,000. A jury later rendered a verdict awarding $469,247 to the plaintiff. Geico did not file a motion for new trial. The plaintiff later amended her complaint to add a claim for bad faith under Fla. Stat. 624.155. The jury in the bad faith trial found for the plaintiff, and a judgment was entered using the damages determination made by the first jury in the underlying suit. Geico argued on appeal that the trial court erred by treating the excess verdict from the first trial as conclusive evidence of the plaintiff’s damages in the bad faith trial.

The Fourth DCA rejected Geico’s arguments on three grounds. First, the Fourth DCA found that the statute creating the bad faith cause of action, Fla. Stat. 624.155, expressly establishes that the damages in a first-party bad faith case include the total amount of the plaintiff’s damages that were caused by the original third-party tortfeasor. “In the context of a first-party bad faith action, the underlying action between the insured and the insurer establishes two elements that must exist for the bad faith cause of action to accrue — the liability of the uninsured tortfeasor and the extent of the plaintiff’s damages in the underlying accident.” The Fourth DCA noted that in the absence of a determination of the existence of liability on the part of the uninsured tortfeasor and the extent of the plaintiff’s damages, a cause of action cannot exist for a bad faith failure to settle.

Second, the Fourth DCA relied upon the Florida Supreme Court’s jurisprudence in first party bad faith actions. As an intitial matter, the Florida Supreme Court has stated that the initial action for first party benefits determines the extent of the plaintiff’s damages in a first party bad faith case. Thus, the Fourth DCA found that based on the Florida Supreme Court’s construction of the applicable statutes, the initial action between the insurer and the insured fixes the amount of damages in a first-party bad faith action. The Fourth DCA further noted that “[f]orcing retrial of a plaintiff’s damages at a first party bad faith trial, as Geico urges, is such bad policy that we do not glean even a hint of its existence in any case the Supreme Court has decided in this area.”

Lastly, the Fourth DCA rejected Geico’s argument that the procedure used in the case frustrated Geico’s appellate rights to challenge the full amount of the jury’s verdict in the first case. The Fourth DCA noted that Geico failed to file a Rule 1.530(a) motion or take an appeal in the first trial, and therefore, Geico did not preserve its right to challenge the total amount of the jury’s damage award from the first trial.

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