Assignment of Benefits, Bad Faith, Proposal For Settlement Discussed in May 2016 Colodny Fass Florida Insurance Litigation News

 

Following are excerpts from Colodny Fass’ May 2016 edition of “Florida Insurance Matters,” an update on recent insurance litigation in the State of Florida (to view the newsletter on its original Web page, click here):

Insured Not Required to Participate in Appraisal with AOB

A water mitigation company that filed suit under an assignment of benefits from the insured was ordered to proceed with appraisal of the insurance loss. The appellate court did not compel the insured to participate in the appraisal process, but initially left the issue open for the trial court. After rehearing, the appellate court revised its opinion holding that the trial court had no jurisdiction over the insured, who was not a party to the lawsuit. Additionally, the court held that the policy provision requiring the insured to select an appraiser was not a duty under the policy provision “Duties after Loss.”  Unlike the insured’s obligation to submit to an examination under oath, appraisal was not a required duty of the insured and did not preclude an assignment to a vendor providing services. 

Certified Priority Restoration v. State Farm (Fla. 4th DCA, May 11, 2016)

• Consider whether an insured should be joined in AOB lawsuit as an indispensable party. 

Bad Faith Claim Waived Where Insured Settled Without Consent

An insured, unsatisfied with how his insurance company was handling a tort claim, settled with the tort plaintiff prior to trial without the insurer’s consent.  The insured then assigned his “bad faith” claim. The assignee claimed the insurance company’s failure to attend mediation or settle before trial constituted an “inadequate defense.”  The bad faith case was dismissed based on the insured’s breach of the duty to cooperate by settling the matter without the carrier’s consent.  The appeals court affirmed but assumed that “failure of an insurer to enter into mediation and other settlement negotiations in advance of trial can, in some circumstances under Florida law, constitute an inadequate defense by negligence, bad faith, abandonment, or all of them.”

Doe v. OneBeacon America Ins. Co., 2016 WL 2620716 (11th Cir. May 9, 2016)

• The question of whether and when to settle a liability claim is an ongoing one.  Carriers should periodically assess if settlement before trial is in their insured’s best interest.

Proposal for Settlement Ineffective When Internally Inconsistent

A Proposal for Settlement (“PFS”) stated in one paragraph that no attorneys fees or costs would be taxed, but other paragraphs implied that attorneys fees could be taxed at a later time. The PFS was declared invalid because it contained “patent ambiguities” which did not allow the recipient to properly assess whether it should be accepted. A PFS must comply with Florida Statutes 768.79 and Rule 1.442 requirements and clearly state “all relevant conditions,” “all non-monetary terms,” whether fees are part of the claim and whether fees are included in the proposal. 

Maines v. Fox 2016 WL 1741950 (Fla. 1st DCA. May 3, 2016)

• PFS language continues to be scoured by trial courts for “ambiguities.”  Make sure that any PFS filed does not contain contradictory terms.

Conflict Among Appellate Courts as to Whether Motion for Extension Tolls Time to Accept a PFS

One day before a PFS was due to expire, the recipient of the proposal filed a motion for extension of time within which to accept the offer, stating that she did not have sufficient information to assess the matter. The recipient accepted the PFS before the court ruled on the motion for extension of time. The court ultimately denied the motion and struck the acceptance of the PFS.  The 3d DCA ruled that the motion for extension of time could not toll the 30 day statutory period for acceptance, noted conflict with a 5th DCA opinion and certified to the Supreme Court. 

Ochoa v. Koppel 2016 WL 2941099 (Fla. 2d DCA May 20, 2016) 

• Make sure that there is strict compliance with the 30-day time period for accepting a PFS

Maria Elena Abate Speaks on Identify Theft and Fraud at Claims and Litigation Management Conference

Maria Elena Abate and executives from Olympus Insurance and Admiralty Insurance presented “Identity Theft and Identity Fraud – Does It Affect Insurance Claims?” at the 2016 Claims and Litigation Management Conference in Atlanta, Georgia on May 19.  The broad-based presentation discussed the ever expanding scope of identity theft and fraud, how identity fraud schemes are conducted, how they are used in fraudulent insurance claims, and what insurance products are available to address the problem.