Bottini v. GEICO

         Appeal from the United States District Court for the Middle District of Florida D.C. Docket No. 8:13-cv-00365-EAK-AEP.

          Before TJOFLAT and MARCUS, Circuit Judges, and STEELE, ^[*] District Judge.

          OFLAT, Circuit Judge:

         In this § 1292(b) interlocutory appeal, we consider a narrow issue concerning claims against uninsured/underinsured motorist ("UM") insurance^[1] providers under Florida law. Florida, by statute, imposes a duty on insurers to settle their policyholders' claims in good faith. Fla. Stat. § 624.155. If a UM insurer fails to settle a legitimate claim within the statutory time limit, its policyholder may obtain, through two lawsuits, two sets of damages: one for breach of contract up to the policy maximum and another for bad faith for the full amount of the policyholder's injury ("statutory damages").^[2] Here, the parties disagree about whether the Court in this bad-faith case is bound by the state court jury's determination of damages in the underlying UM breach-of-contract action.

         During the pendency of this appeal-but prior to oral argument-the Florida Supreme Court held that the determination of damages in a UM contract case is binding in a subsequent bad-faith case. Fridman v. Safeco Ins. Co. of Ill., 185 So.3d 1214, 1216 (Fla. 2016). Critical to this appeal, however, Fridman contained a caveat that the parties have a right to appellate review of the statutory-damages determination before it becomes binding in the subsequent bad-faith case. Id. at 1226. We conclude that the defendant, GEICO, did not receive appellate review of the statutory-damages determination in the parties' underlying breach-of-contract case. Therefore, that damages determination does not bind the parties in this bad-faith case. We thus reverse the District Court's order granting partial summary judgment on the binding effect of the verdict in the Circuit Court's breach-of-contract case, and hold that the parties must again litigate statutory damages.

         I.

         This case began tragically. On March 3, 2007 at around 12:10 AM, Gerard Bottini was traveling on I-75 in Hillsborough County, Florida. A car ahead of him caught fire and began emitting smoke, obscuring his view of the road. As a result, he lost control of his vehicle, which left the roadway, rolled over, and ejected him. He died later that day from his injuries.

         The vehicle Mr. Bottini was driving was insured by a GEICO policy that provided $50, 000 of UM coverage. The car that caught fire was underinsured for purposes of Fla. Stat. § 627.727. After Mr. Bottini's death, Mary Bottini, his wife, became the personal representative of Mr. Bottini's estate. In the months following the crash, Ms. Bottini's lawyer sent two letters to GEICO demanding payment of the policy maximum because Mr. Bottini was not at fault, and GEICO had possession of crash reports supporting that conclusion. GEICO denied the requests, stating that it was still conducting its own investigation to determine whether Mr. Bottini was at fault for the accident, which would render the coverage inapplicable.

         On August 8, 2007, 104 days after Ms. Bottini's lawyer sent her first letter to GEICO and 158 days after the crash, she filed a Civil Remedy Notice of Insurer Violation ("CRN") with the Florida Department of Financial Services. Filing the CRN is a statutory prerequisite to filing a bad-faith claim against an insurer. Fla. Stat. § 624.155(3). As required by § 624.155(3)(b)(1), Ms. Botini's CRN listed the statutory provisions that she alleged GEICO was violating by failing to honor her claim.^[3] GEICO responded to Ms. Botini's CRN on October 5, 2007, stating that its investigation had led it to conclude that smoke from the vehicle in front of Gerard Bottini did not cause him to lose control of his vehicle, it had not acted in bad faith, and it would "continue to make every attempt to resolve this claim amicably." About two weeks later, in an apparent change of heart, GEICO sent Ms. Bottini's lawyer a check for the full $50, 000, including with it a complete release of liability for any related claims.^[4] Ms. Bottini rejected the release of liability and returned the check.

         In April 2008, Ms. Bottini sued GEICO in the Circuit Court for Hillsborough County, Florida seeking benefits under the UM policy. GEICO defended on the basis that Mr. Bottini was negligent in driving his vehicle and such negligence was either the sole or contributing cause of the accident. Ms. Bottini countered that the vehicle that caught fire ahead of Mr. Bottini was maintained and operated negligently, and that negligence caused the crash, not any breach of duty committed by Mr. Bottini.

         The case was tried to a jury, and the jury found for Ms. Bottini. It decided that Mr. Bottini was not negligent, that both the operator and owner of the smoking vehicle were negligent, and that GEICO was therefore liable. The jury also decided the full extent of damages arising from the accident-$103, 552 to the estate; $14, 522, 478 to Ms. Bottini for loss of support, services, companionship, and pain and suffering; and around $5, 400, 000 to each of Mr. Bottini's three children for loss of support and services, parental companionship, instruction and guidance, and pain and suffering. In total, the jury found damages amounting to $30, 872, 266.

         Following the verdict, GEICO filed motions for new trial and remittitur, but those were denied. It then filed a motion in the Circuit Court to limit the judgment to the $50, 000 policy maximum, and that motion was granted. Thus, after reciting the jury's $30, 872, 266 damages verdict and assessing setoffs, ^[5] the Court entered a final judgment for $50, 000.

         GEICO appealed the judgment to the Second District Court of Appeal. It sought a new trial on several grounds, three of which were pertinent to the computation of damages. It argued that Ms. Bottini's counsel impermissibly attacked the character of the driver of the vehicle that caught fire, that Ms. Bottini's counsel made a highly inflammatory closing argument, and that $30, 000, 000 in damages was excessive and against the "manifest weight of the evidence." GEICO also contended that the judgment clearly reflected a "punitive component" as a result of "prejudicial and improperly admitted evidence and argument."

         The Second District affirmed the judgment in a short per curiam opinion that reads in its entirety as follows:

Geico General Insurance Company raised five issues in this appeal. We conclude that none of the issues warrants reversal. We note that Geico's arguments include claims of error that impacted the amount of damages determined by the jury. The jury verdict found that the Estate's damages were $30, 872, 266. But the judgment amount entered by the trial court against Geico is $50, 000, based on the applicable insurance policy limits. Based on the evidence presented, we are satisfied that even if Geico were correct that errors may have affected the jury's computation of damages, in the context of this case and the amount of the judgment, any such errors were harmless. Thus, we do not address further Geico's claims of error.

Geico Gen. Ins. Co. v. Bottini, 93 So.3d 476, 477 (Fla. Dist. Ct. App. 2012).

         Judge Altenbernd wrote separately to address the elephant in the room-the effect of the jury's calculation of damages in the UM suit on the inevitable, forthcoming bad-faith lawsuit:

This appeal is motivated by the lawsuit that both parties know will follow. The Estate will sue GEICO under section 624.155, Florida Statutes (2006), for failure to settle this claim at an earlier time . . .

The statute does not explain how the finder of fact in the next lawsuit determines the "total amount" of the claimant's damages. Not unreasonably, both sides in this appeal anticipate that the Estate will attempt to use the verdict in this case as evidence of the total amount of damages in the next lawsuit.

Constitutionally, this court is given power to review final judgments for reversible error. We can also write an opinion affirming a judgment as to issues that, if we were to reach an opposite result, would lead to a reversal of the judgment. But I am unconvinced that we have a scope of review that allows us to rule on issues that do not and cannot affect the judgment on appeal. In this case, given that we decided to affirm on the issues relating to liability, GEICO essentially wants this court to write an opinion that affirms the judgment, but "reverses" the verdict as to elements of damage not included within the judgment. I simply conclude that this court does not have the power to issue such an opinion. The fact that such an opinion might be convenient for purposes of the next lawsuit or facilitate its settlement does not change the authority given to me under the Florida Constitution.

Accordingly, this concurrence permits both sides to know that at least one judge on this panel has not decided that the verdict is correct or incorrect. . . . If I am refusing to do that which the law requires me to do, I would assume that by writ of mandamus the supreme court could order me to conduct such a review. If so ordered, I would perform that review.

Id. at 478 (Altenbernd, J., concurring) (footnote omitted). GEICO did not seek discretionary postjudgment review in the Second District or in the Supreme Court of Florida.

         Ms. Bottini brought this action in the District Court on February 8, 2013, invoking the Court's diversity jurisdiction under 28 U.S.C. § 1332. She alleged that GEICO acted in bad faith, violating several provisions of Fla. Stat. § 624.155. She contended that she was therefore entitled, in accordance with Fla. Stat. § 627.727(10), to the full amount of damages designated by the jury in the UM breach-of-contract lawsuit. Ms. Bottini then moved the District Court for summary judgment on the issue of damages, arguing that the Circuit Court jury verdict fixed the damages at $30, 872, 266. GEICO countered, arguing that it never received appellate review of that damages verdict; therefore, giving effect to the verdict in the bad-faith lawsuit would violate its right to procedural due process.

         The District Court granted Ms. Bottini's motion, holding that the verdict was binding as the measure of damages in the bad-faith suit. GEICO subsequently filed a motion for reconsideration of the District Court's order, or alternatively, to certify the order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b).^[6] The District Court denied reconsideration but certified the order for interlocutory appeal. This Court agreed to hear the appeal.

         II.

         In this Part, we explain the mechanics of an insurer-bad-faith suit under Florida law. Part II.A details the history of Florida's bad-faith cause of action. Part II.B explains the requirements for a plaintiff to prevail on a bad-faith claim against a UM insurer, including the Florida Supreme Court's recent clarification in F ...