TALLAHASSEE -- The Florida Supreme Court decided Sept. 20 that a lower court erred when it ruled that a couple didn’t provide enough evidence to prove Geico General Insurance Company operated in bad faith in handling one of her claims.
The case arrived in the Fourth District Court of Appeal, which ruled against Suzanne Harvey and James Harvey in their case against GEICO, saying they didn’t submit enough evidence. Still, the Harveys challenged the ruling in the state Supreme Court (via Justice Peggy Quince who authored the opinion and Barbara Pariente, R. Fred Lewis and Jorge Labarga who concurred), which said the appeals court reached an erroneous conclusion in more ways than one.
Their matter with GEICO started in August 2006 after James Harvey was involved in a car accident with a man who died after suffering injuries. Harvey reported the accident with his insurance company, GEICO, where he had a $100,000 liability policy, and GEICO assigned a claims adjuster to the case. The adjuster advised that the surviving family of the deceased had a claim that would go well beyond his $100,000 limit and informed Harvey he could hire a lawyer.
Justice Peggy Quince
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An attorney for the deceased’s family reached out to the adjuster and asked for a statement from Harvey to evaluate his assets. The adjuster not only denied the request, but never informed Harvey of the request, court documents show. GEICO then paid the estate the full policy amount. Harvey only found out about the request for a statement when the family acknowledged the payment and the refusal of the statement.
The accident case then went before a jury where Harvey was ordered to pay the deceased’s estate $8.47 million. Harvey responded with a bad faith action against GEICO. The lawyer for the estate testified that if he knew Harvey only had $85,000 in assets (which could have been determined if Harvey had given the statement), he wouldn’t have filed the lawsuit and would have accepted the $100,000 policy limit.
The deceased’s wife echoed similar sentiments. While the trial court awarded Harvey $9.2 million, GEICO appealed, saying Harvey didn’t present enough evidence, and the Fourth District Appellate Court reversed the lower court’s ruling. Harvey then appealed to the Supreme Court.
“Nothing in our precedent can be read to suggest that an insurer cannot be found liable for bad faith merely because the insured could have attempted on his own to avoid the excess judgment,” the Supreme Court said. Instead, the precedent says that the insured is entitled to a fiduciary obligation from the insurer, who is required to make the best decision for the insured, the court noted.
It determined Harvey actually did present enough evidence, and proved GEICO “completely dropped the ball” according to the court and didn’t use proper diligence. It pointed out how the claims adjuster not only refused to deliver a statement from Harvey but didn’t even tell Harvey in the first place. Had the adjuster done so, Harvey would have been able to avoid the monumental multimillion dollar judgment against him. The Supreme Court said this was more than enough evidence to show GEICO acted in bad faith.
Chief Justice Charles T. Canady dissented and said there are records that show Harvey and his wife had more than $1 million in assets, and that Harvey had discussed his assets with a lawyer on the day of the accident. He then provided his lawyer with the information three weeks before the lawsuit was even filed. Considering this, Canady said, it was Harvey and his lawyer, rather than GEICO, that determined the decision. Justices Ricky Polston and C. Alan Lawson concurred with the dissension.
Polston also filed his own dissent, and said GEICO did all it could to operate in good faith, in which Canady and Lawson concurred.