In the recent decision of Geico v. Barber, Florida’s Fifth District Court of Appeal confirmed that it doesn’t know how a lawsuit over uninsured motorist benefits is actually supposed to work.

In this case the court ruled (mirroring its prior ruling in Safeco v. Fridman) that an insurance company could confess to a judgment in the amount of the uninsured motorist policy limit, even on the eve or trial, and by doing so would close out the insured’s case. This means that any damage done to the insured by the insurance company by waiting so long to pay its policy limit would have to be addressed in a separately filed trial, where the insured would have to re-prove all of her damages again.

To know how this decision is wrong, we’ll first need to talk about how uninsured motorist insurance works.

How Uninsured Motorist Insurance Works:

Uninsured motorist insurance (it’s technically uninsured / underinsured motorist insurance) is intended to compensate you if you are injured by another motorist who either has no insurance, or whose insurance policy isn’t enough to cover your injuries. Here’s an example:

You are rear-ended by Cleetus, driving a 1979 Ford Mustang, who was blaring CCR at the time of the accident. Not surprisingly, Cleetus has no insurance. Your medical bills are $50,000 as a result of the accident, and you’ve had to miss work due to being in the hospital. Fortunately you have uninsured motorist insurance int he amount of $50,000, and so when you call your insurance company the day after the accident they say a check is on its way for $50,000.

So if uninsured motorist insurance is supposed to make up for the other driver not having insurance, what happens if I call my insurance company and they tell me to get lost, or that they’re only going to pay a little bit?

That’s where Florida’s uninsured motorist law comes in. It is supposed to act as an incentive for the insurance company to pay valid claims on time, and in the right amount.

Florida’s Uninsured Motorist Law and Bad Faith Cases:

Florida’s uninsured motorist law says that if an insurer wrongfully denies a claim for uninsured benefits in bad faith, then the amount the insurer should have to pay its insured is the total amount of damages, whether or not it is higher than the insurance policy limit.

The damages recoverable from an uninsured motorist carrier in an action brought under s.624.155 shall include the total amount of the claimant’s damages, including the amount in excess of the policy limits, any interest on unpaid benefits, reasonable attorney’s fees and costs, and any damages caused by a violation of a law of this state. The total amount of the claimant’s damages is recoverable whether caused by an insurer or by a third-party tortfeasor. Section 627.727(10), Florida Statutes.

Florida courts (until the 5th DCA’s decisions in Safeco v. Fridman and Geico v. Barber) have held that the easiest and most expedient way to measure the total amount of damages is to substitute in the uninsured motorist carrier for the at-fault driver in a lawsuit. Example:

You file suit against Cleetus for rear-ending your car and causing your injuries. Because Cleetus doesn’t have insurance, you can have your uninsured motorist insurance company “step into his shoes” and defend against your claim.

If you successfully sue Cleetus and the amount of the award is equal to or less than the amount of uninsured motorist coverage you have, the insurance company is liable for that amount. If the award is higher than the amount of insurance, then, if you show your insurance company acted in bad faith in not paying your claim, your insurance company will have to pay you the total amount of the award. Basically, the law lets the insured convert the original case against the uninsured driver into a bad faith case against the insurance company once the jury awards an amount over the policy limits.

How the Safeco v. Fridman and Geico v. Barber cases get it wrong:

What the Fifth DCA has done in Safeco v. Fridman and Geico v. Barber is give the insurance company an “out” in an uninsured motorist case.

In Fridman, the insurance company denied the insured’s uninsured motorist claim, forcing the insured to file suit and spent time and money proving his damages. The insured filed a Civil Remedy Notice, a prerequisite to a bad faith action in a uninsured motorist case. Right before the trial, the insurance company then filed a “confession of judgment” – a document basically saying that the insured was entitled to the uninsured motorist policy. The appellate court held that once the insurance company did this, the insured could no longer proceed in that original trial to determine the full amount of damages he was entitled to, but had to file a separate bad faith lawsuit, which means he would have to re-prove everything he’d already proven in the first place.

Judge Sawaya wrote a well-thought-out dissent to the Fridman case, which nicely encapsulates the issue:

The majority has cited no meaningful precedent to support its decision. That is because none exist, and none exist because such precedent would necessarily countenance the actions of an insurer that confesses judgment at the last hour in an effort to avoid a trial that would reveal, through the jury’s verdict, the true extent of the insured’s injuries and provide a basis to award damages in the inevitable bad faith action the insurer foresaw on the horizon.

The Fifth DCA let the uninsured motorist company essentially pull the rug out from under its insured, twice. First by not paying the uninsured motorist policy, and second by trying to deprive him of the right to have the jury determine the full measure of his damages.

Now, in Barber, the appellate court has done it again – I’ll let Judge Sawaya explain:

The majority holds, based on its interpretation of Fridman, that once the policy limits are tendered (Fridman refers to such a tender as a confession of judgment), the trial court lost all jurisdiction, except to enter the confessed judgment. This is simply wrong. The majority then holds that “Barber is not precluded from litigating the damages issue on his bad-faith claim . . . .” But that is exactly what Barber was appropriately doing in the UM case. The holdings of the majority in the instant case and Fridman do not comport with how the Florida Supreme Court and the Legislature say bad-faith actions should be conducted.

What’s the solution?

Only the Florida Supreme Court can sort this mess out. Right now the 5th District is the only part of Florida that applies the wrong method of dealing with uninsured motorist cases. Hopefully we will see the Florida Supreme Court reverse these decisions and straighten this out soon.

But for now, parties in uninsured motorist suits will have to deal with increased costs, increased litigation, and a backwards way of doing things. Contact Metcalf Falls, Criminal Defense Attorneys, P.A. if you need assistance with your case.