Eleventh Circuit Court of Appeals Declines Request by Geico
The Eleventh Circuit Court of Appeals recently declined to rehear an appeal by Geico en banc. The insurance company had previously been found to have acted in bad faith toward Daniel Diperna, an injury victim who sued Geico for damages after its customer negligently caused the accident in which Diperna was injured. A panel of three judges from the Eleventh Circuit had previously ruled 2-1 against Geico and found that sufficient evidence was presented at trial to support a jury’s finding that Geico had acted in bad faith. Geico had requested the entire panel of judges that comprise the Eleventh Circuit Court of Appeals rehear the appeal (an en banc hearing), but the court declined to do so. Unless Geico further appeals the adverse decision and review is granted by the Supreme Court of the United States, the trial court’s judgment in Daniel Diperna v. Geico General Insurance Co. will become final.
Negligence v. Bad Faith
The main issue in the Diperna case had to do with whether there was sufficient evidence presented at trial from which a jury could find that Geico had acted in bad faith in settling Diperna’s claim. Diperna was injured in a 2007 auto accident with a driver who was insured by Geico. Diperna’s neck was fractured as a result of the accident and he pursued a settlement with Geico. Eventually, Diperna and Geico agreed to a $10,000 settlement, the limit on the at-fault driver’s policy with Geico. Prior to paying the amount agreed to, Geico sent its insured a financial affidavit that was to be completed and returned. It was never signed, and the insured actually testified on several occasions that he had no intention of completing the financial affidavit. As a result, Diperna was never paid the settlement amount, so he sued Geico. Diperna prevailed at trial and was awarded over $700,000 in compensation. Geico subsequently appealed.
In ruling in favor of Diperna, the Eleventh Circuit Court of Appeals found that evidence that Geico had failed to pay Diperna the settlement amount previously agreed to was sufficient evidence of bad faith. The lone dissenting appellate judge argued that bad faith requires evidence that the insurance company acted in its own financial interest and that the evidence presented at trial only established that Geico had negligently failed to pay the $10,000 settlement amount.
What Does This Mean for Future Bad Faith Cases?
The Diperna decision by the Eleventh Circuit (subject to further appeal) is welcome news for plaintiffs in bad faith insurance claim actions. While Florida law has consistently held for at least 40 years that “bad faith” is something more than simple negligence, the line between what constitutes negligence and what constitutes bad faith appears to be blurring. Going forward, evidence that a settlement payment was delayed because of the insurance company’s oversight or failure to follow-up may be enough to support a finding of bad faith, even if it appears unclear what financial benefit the insurance company received.
You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].