Justia Insurance Law Opinion SummariesArticles Posted in Florida Supreme Court
Johnson v. Omega Ins. Co.
Johnson was covered under a homeowner’s insurance policy issued by Omega when she filed a claim to recover damages resulting from conditions which she believed to be sinkhole activity. After an initial sinkhole investigation determining that there was no sinkhole activity present on Johnson’s property, Omega denied Johnson’s claim. Johnson filed suit against Omega for breach of contract. In response, Omega hired another expert to perform an additional evaluation. The expert agreed that sinkhole activity was present on Johnson’s property. Omega accepted the evaluation report and provided payment for the damages. At issue before the trial court was whether Johnson was entitled to attorney’s fees. The trial court concluded that Omega’s agreement to pay money to Johnson amounted to a confession of judgment and awarded Johnson attorney’s fees under Fla. Stat. 627.428. The Fifth District Court of Appeal reversed, concluding that Omega did not act wrongfully or in bad faith, and therefore, section 627.428 and the confession of judgment doctrine did not apply. The Supreme Court quashed the decision below, holding that a recovery for attorney’s fees under section 627.428 requires an incorrect denial of benefits by the insurance company, not a bad faith denial. View "Johnson v. Omega Ins. Co." on Justia Law
Wells Fargo Bank, N.A. v. Pruco Life Ins. Co.
This case involved a dispute over the validity of three stranger-originated life insurance (STOLI) policies. The United States Court of Appeals for the Eleventh Circuit certified two questions of Florida law to the Supreme Court that were determinative of the case and for which there appeared to be no controlling precedent. The certified questions involved two Florida statutes: Fla. Stat. 627.404(1), requiring that an insurable interest exist at the inception of each life insurance policy, and Fla. Stat. 627.455, providing that an insurance policy is incontestable two years after its issuance. STOLI transactions offer an insured (often an elderly one) “free” or “risk-free” insurance in exchange for transferring the policy to the investor after the two-year incontestability period has expired. The Supreme Court answered that a party cannot challenge the validity of a life insurance policy after the two-year contestability period established by section 627.455 because it is created through a STOLI scheme. View "Wells Fargo Bank, N.A. v. Pruco Life Ins. Co." on Justia Law
Fridman v. Safeco Ins. Co. of Ill.
Petitioner was injured in an automobile accident with an underinsured motorist. Petitioner filed a claim with his insurer (Insurer) for the limits of his uninsured/underinsured motorist (UM) policy of $50,000. After Insurer refused to pay, Petitioner filed a complaint against Insurer to determine liability under the UM policy and the full extent of his damages. Prior to trial, Insurer tendered a check to Petitioner for $50,000 and filed a confession of judgment for that amount. Petitioner opposed the entry of a confessed judgment, arguing that a jury verdict would determine the upper limits of Insurer’s potential liability under a future bad faith claim. The trial court denied Insurer’s motion to confess judgment. After a trial, the jury set Petitioner’s damages at $1 million. The court of appeal vacated the jury’s verdict, concluding that after Insurer confessed judgment in the amount of $50,000, Petitioner’s UM action became moot. The Supreme Court quashed the court of appeal’s decision, holding (1) an insured is entitled to a determination of liability and the full extent of his damages in a UM action before filing a first-party bad faith action; and (2) that determination of damages is generally binding, as an element of damages, in a subsequent first-party bad faith action. Remanded. View "Fridman v. Safeco Ins. Co. of Ill." on Justia Law
Joerg v. State Farm Mut. Auto. Ins. Co.
Luke Joerg (“Luke”) was a developmentally disabled adult who had lived with his parents his entire life and had never worked. Luke was struck by a car in 2007. John Joerg (“Joerg”), Luke’s father, filed an action against State Farm Mutual Automobile Insurance Company, Joerg’s uninsured motorist carrier. Joerg filed a motion in limine to exclude evidence of any collateral source benefits to which Luke was entitled, including discounted benefits under Medicare and Medicaid. The trial court precluded State Farm from introducing evidence of Luke’s future Medicare or Medicaid benefits. The jury awarded a total of $1,491,875 in damages, including $469,076 for future medical expenses. The Second District Court of Appeal reversed the award for future damages, concluding that Luke’s Medicare benefits should not have been excluded by the collateral source rule. The Supreme Court quashed the decision below, holding that the trial court properly excluded evidence of Luke’s eligibility for future benefits from Medicare, Medicaid, and other social legislation as collateral sources. View "Joerg v. State Farm Mut. Auto. Ins. Co." on Justia Law
State Farm Mut. Auto. Ins. Co. v. Curran
After Plaintiff was rear-ended by an underinsured motorist (UM), Plaintiff requested her $100,000 UM policy limits from State Farm. Plaintiff indicated that her damages were estimated to be $3.5 million because she suffered from reflex sympathetic dystrophy syndrome. State Farm responded that Plaintiff must schedule a compulsory medical examination (CME) pursuant to the terms of the policy. Plaintiff refused to attend a CME and instead filed suit against State Farm. The trial court entered judgment against State Farm for the UM policy limits. The court of appeal affirmed, holding (1) Plaintiff breached the contract when she failed to attend the CME; but (2) State Farm must plead and prove prejudice to avoid liability based on noncompliance with the CME clause, and State Farm failed to meet its burden in this case. The Supreme Court approved of the court of appeal’s decision, holding (1) the forfeiture of benefits under a UM policy will not automatically result upon an insured’s breach of a CME provision unless the insurer pleads and proves actual prejudice as an element of its affirmative defense; and (2) the undisputed facts demonstrate that State Farm was not prejudiced in this case. View "State Farm Mut. Auto. Ins. Co. v. Curran" on Justia Law
Intervest Constr. of Jax, Inc. v Gen. Fidelity Ins. Co.
ICI Homes, Inc. (ICI) had a general liability insurance policy with General Fidelity Insurance Company. In 2007, Katherine Ferrin, the owner of a residence constructed by ICI, was injured while using stairs installed by Custom Cutting, Inc. Ferrin filed suit against ICI. ICI, in turn, sought indemnification from Custom Cutting. The parties agreed to a $1.6 million settlement of Ferrin’s claim. ICI accepted $1 million from Custom Cutting’s insurer to settle its indemnification claim, which it paid to Ferrin. ICI and General Fidelity then claimed the other was responsible for paying Ferrin the remaining $600,000. Both parties paid $300,000 to Ferrin to settle Ferrin’s claim. ICI then filed suit against General Fidelity seeking return of the $300,000 ICI paid above the $1 million indemnification payment. General Fidelity counterclaimed seeking return of the $300,000 it had paid to Ferrin. The district court entered judgment for General Fidelity. The court of appeals certified two questions to the Supreme Court for resolution. The Supreme Court answered (1) the General Fidelity policy allowed ICI to apply indemnification payments received from Custom Cutting’s insurer towards satisfaction of its $1 million self-insured retention; and (2) the transfer of rights provision in the policy did not abrogate the made whole doctrine. View "Intervest Constr. of Jax, Inc. v Gen. Fidelity Ins. Co." on Justia Law
Washington Nat’l Ins. Corp. v. Ruderman
Several insureds filed a class action against the predecessor of Washington National Insurance Corporation concerning insurance policies that provide for reimbursement of certain home health care expenses. The district court granted summary judgment for the insureds, concluding that various provisions in the policy, including a certificate schedule, demonstrated an ambiguity concerning whether an automatic increase applied only to the daily benefit or also applied to the lifetime maximum benefit amount and the per occurrence maximum benefit amount. Because there was ambiguity in the policy, the court of appeal certified questions of law to the Florida Supreme Court, which held (1) because the policy was ambiguous, it must be construed against the insurer and in favor of coverage without consideration of extrinsic evidence; and (2) when so construed, the policy's automatic benefit increase applies to the daily benefit, the lifetime maximum benefit, and the per occurrence maximum benefit. View "Washington Nat'l Ins. Corp. v. Ruderman" on Justia Law
Trinidad v. Fla. Peninsula Ins. Co.
Plaintiff filed a claim with Defendant, his homeowner's insurance company, for fire damage on his home. Plaintiff's insurance policy with Defendant was a replacement cost policy. Defendant made a payment to Plaintiff that included costs of repair even though Defendant had not completed any repairs to the home. Defendant, however, refused to pay for a general contractor's overhead and profit because Plaintiff had not yet incurred those expenses. Plaintiff filed a breach of contract claim against Defendant, contending that, like the other costs of repair Defendant paid, Defendant was required to pay costs for overhead and profit. The trial court granted summary judgment for Defendant, and the court of appeal affirmed. The Supreme Court quashed the court of appeal's decision, holding (1) replacement cost insurance includes overhead and profit where the insured is reasonably likely to need a general contractor for repairs; and (2) the court of appeal erred in determining the Florida law and the insurance policy permitted Defendant to withhold payment of overhead and profit because Plaintiff had not actually incurred those costs. Remanded. View "Trinidad v. Fla. Peninsula Ins. Co." on Justia Law
Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc.
After Insured sustained injuries in a car accident he sought MRIs from Virtual Imaging Services. Virtual Imaging obtained an assignment of personal injury protection (PIP) benefits under Insured's policy with GEICO and billed GEICO $3600 for the MRIs. GEICO paid the bill but limited its reimbursement to eighty percent of 200 percent of the applicable Medicare fee schedule in accordance with the formula described in Fla. Stat. 627.736(5)(a). This statutory provision became effective on January 1, 2008 as part of Florida's PIP statute. Virtual Imaging subsequently sued GEICO, alleging that GEICO's reimbursement was insufficient. The county court granted Virtual Imaging's motion for summary judgment. The court of appeal affirmed then certified a question of law to the Supreme Court, which answered by holding that GEICO was required to give notice to Insured by electing the permissive Medicare fee schedules in its policy before taking advantage of the Medicare fee schedule to limit reimbursements. View "Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc." on Justia Law
Nunez v. GEICO Gen. Ins. Co.
Plaintiff's automobile insurance policy with Geico included a condition that Plaintiff submit to examination under oath (EUO) before recovering personal injury protection (PIP) benefits. Geico denied Plaintiff's PIP claim due to her failure to satisfy this condition after she was injured in a car accident. Plaintiff filed a class action complaint alleging that Geico had violated Florida's PIP statute. The federal district court dismissed the case, concluding that the PIP statute did not prohibit an insured from requiring an EUO. On appeal, the Eleventh Circuit certified a question of law to the Florida Supreme Court, which answered by holding that, under Fla. Stat. 627.736, an insurer cannot require an insured to attend an EUO as a condition precedent to recovery of PIP benefits. View "Nunez v. GEICO Gen. Ins. Co." on Justia Law