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Mohamad R. Samiian, M.D. v. First Professionals Ins. Co., Inc., et al., Case No. 1D14-3656 (1st DCA)

In Samiian, the trial court awarded summary judgment in favor of the physician plaintiff’s medical malpractice carrier, finding that the bad faith claim was barred by the “safe harbor” provision of section 766.1185(1)(a), Florida Statutes. The First District reversed, however, finding that subsection (2), not subsection (1)(a) controlled.

The plaintiff’s patient suffered cardiac arrest and died following liposuction performed by the plaintiff in about April 2004. The day following the incident, the plaintiff notified his medical malpractice carrier of the potential claim. Approximately one year after the incident, the physician plaintiff received a notice of intent to initial medical malpractice negligence litigation. The medical malpractice carrier’s adjuster later noted that the case had become indefensible at least in terms of post-op care. The carrier’s management decided to tender the policy limits to the plaintiffs. The carrier tendered the check on July 11, 2005, before the conclusion of the presuit investigation period. Two days later, counsel for the physician sent the personal representative’s counsel a letter offering to submit the case to binding arbitration. The offer to arbitrate was not contingent upon any limitation of damages. The personal representative accepted the offer to arbitrate. An arbitration panel later awarded the estate and survivors $35,315,789, which award was affirmed on appeal in 2010. Final judgment was later entered against the physician in the amount of $43,347,183.28.

The physician then filed suit against his medical malpractice carrier for bad faith. The carrier moved for summary judgment arguing (1) that it had tendered its policy limits promptly in response to a notice of intent and therefore any bad faith action was barred by virtue of the safe harbor provision in section 766.1185(1)(a), Florida Statutes; and (2) the carrier was not legally responsible for the decision to offer to arbitrate the medical malpractice claim, a decision which the carrier argued was made by the physician and his counsel independently of the carrier. The trial court granted summary judgment in favor of the carrier based on the first ground, and rejected the second ground.

The First District noted that the record clearly shows that the carrier tendered its policy limits well before the time had run under section 766.1185(1)(a), Florida Statutes. However, section 766.1185(1)(a) “does not bar an action for bad faith on any ground other than failure to settle promptly (before the deadline it specifies) when settlement is indicated.” Therefore, where the insurer timely tenders its policy limits and meets other reasonable conditions of settlement, section 766.1185(1)(a) bars only an action against an insurer for bad faith for failure to pay its policy limits. The physician’s complaint here did not allege bad faith based on a failure to pay or tender limits; rather, the complaint contended that the carrier acted in bad faith in making an offer to arbitrate which entailed admitting liability, without making the offer contingent upon a limit of general damages. The record showed that the deceased patient earned over $2 million each year, and therefore, admitting liability for economic damages could not have been in the physician’s best interest. The complaint additionally alleged that the carrier failed to advise the physician of the consequences of admitting legal liability, and that the carrier acted in its own best interest by offering to submit the claim to binding arbitration, thereby limiting its exposure to attorneys’ fees and costs.

The First District found that the bad faith action pled in the complaint falls under section 766.1185(2), not 766.1185(1)(a). Subsection (2) specifies ten factors that must be considered on the question of bad faith, where subsection (1) does not apply. The court additionally found that whether the carrier acted in bad faith as alleged in the complaint depends on numerous factual questions that cannot, on this particular record, be resolved by summary judgment.

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