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Biz Group Asks Fla. Justices To Ditch Geico Bad Faith Case

By Jeff Sistrunk

Law360, Los Angeles (July 31, 2017, 9:10 PM EDT) -- A Florida business group urged the state's high court Monday to reject a challenge to an appellate panel's decision that Geico didn't act in bad faith by not settling claims against a policyholder later hit with an $8.7 million fatal-crash judgment, saying the panel's ruling doesn't directly conflict with any Sunshine State precedent.

In an amicus brief supporting Geico, the Florida Justice Reform Institute — which describes itself as a coalition of businesses and citizens aiming to promote "fair and equitable legal practices" and eliminate "wasteful civil litigation" — said the Florida Supreme Court shouldn't have agreed to review a state Fourth District Court of Appeal panel's decision overturning a judgment in favor of Geico policyholder James Harvey and entering a directed verdict in the insurer's favor on Harvey's bad faith claims.

According to the institute, the Florida justices should only review appellate decisions that "expressly and directly" conflict with rulings on the same legal question by the Florida high court or other state appellate courts. Here, the group argued, the Fourth District panel's ruling was in line with applicable precedent regarding the requirements for bad faith claims and directed verdicts.

"In reality, accepting review of the Fourth District’s decision in these circumstances would invite every party that loses at a district court of appeal on the issue of whether a directed verdict should have been granted to come up to this court to seek a second review with the hope to obtain a different result," the institute's attorneys wrote.

An attorney for Harvey did not immediately respond to a request for comment late Monday.

The dispute dates back to Aug. 8, 2006, when Harvey was involved in a car accident that resulted in the death of John Potts, according to court papers. Potts' widow proceeded to sue Harvey, and a jury awarded her $8.7 million. Harvey then sued Geico, saying that if the insurer had handled the claim in good faith, the widow would have settled for Harvey's $100,000 policy limit before even bringing suit.

Harvey blamed an allegedly overworked, disorganized claims handler at Geico who never passed word from the Potts estate's lawyer that the estate wanted Harvey to give a recorded statement. Such a statement would have established whether he had sufficient business assets worth pursuing, among other things.

Instead, Harvey has argued, the claims handler, Fran Korkus, said Harvey was unavailable for such a statement and never told Harvey that the statement was even requested. It was not until Korkus faxed Harvey a letter from the Potts estate's lawyer referencing the prior request for a statement that Harvey first became aware of the request, according to court papers.

Korkus later admitted at trial that she knew the estate's attorney, Sean Dominick, had to request the statement to satisfy his duty of due diligence to his client, according to court documents. Dominick, meanwhile, testified that he would have told Potts' widow to settle instead of filing suit had he been made aware that Harvey retained personal counsel to review his business assets, court papers show.

A Florida jury ultimately concluded that Geico had acted in bad faith by failing to settle the Potts estate's claims against Harvey. In January, though, a Fourth District panel reversed the trial court's judgment and ordered a directed verdict be entered in Geico's favor. The appellate panel said that while Geico's claims-handling process "was not without fault and could be improved," it did not amount to bad faith.

Harvey then sought review from the Florida Supreme Court, which accepted jurisdiction in June.

In Monday's brief, the institute contended that the Florida justices had "improvidently granted" review of the case, based on Harvey's assertions that the Fourth District panel's conclusion directly conflicted with multiple precedential decisions governing bad faith claims and directed verdicts.

The institute, however, said that the panel's decision was entirely consistent with precedent. The group asserted that the panel had correctly followed the Florida Supreme Court's governing decision in the case of Boston Old Colony Insurance Co. v. Gutierrez by analyzing seven factors weighing on whether Geico acted in good faith and applying the facts of the case to each of them.

"What [Harvey] ultimately suggests is that a directed verdict is never appropriate in a bad faith action, implying that any decision in which a court takes the issue of bad faith away from a jury conflicts with this court’s precedent that the totality of circumstances surrounding bad faith must be considered," the group's attorneys wrote.

According to the institute, because the Fourth District panel's decision is "fully reconcilable" with all the Florida Supreme Court's prior decisions, the Florida justices should now reject jurisdiction of the case.

The Florida Justice Reform Institute is represented by its own William W. Large and by Rodolfo Sorondo Jr. of Holland & Knight LLP.

Harvey is represented by Philip Burlington, Bard D. Rockenbach and Andrew A. Harris of Burlington & Rockenbach PA, Kimberly Boldt, Mario R. Giommoni and Ryan C. Taylor of Boldt Law Firm PA, and Fred Cunningham and Greg Yaffa of Domnick Cunningham & Whalen.

Geico is represented by B. Richard Young, Adam Duke and Cody Pflueger of Young Bill Boles Palmer & Duke PA.

The case is Harvey v. Geico General Insurance Co., case number SC17-85, in the Florida Supreme Court.

--Additional reporting by Cara Salvatore. Editing by Aaron Pelc.

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