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No good deed goes unpunished



New Yanitza Montanez appealed the district court's grant of a summary judgment to the Liberty Mutual Fire Insurance Company on her infidelity. The son of the defendant's insured caused a car accident with two other cars which led to the plaintiff's daughter being killed and four other people being injured. Although the defendant made the entire insurance limits available to the various appellants, the plaintiff rejected the defendant's efforts to settle the case and instead proceeded with a trial against the defendant's insured. She then obtained the consent of the defendant's insured to a consent judgment of $ 8.25 million against the insured on the false death claim made on her daughter's behalf.

Thereafter, the plaintiff filed a bad claim of allegiance against the defendant, claiming that the Defendant had failed to determine the wrongful death claim in a timely manner, she is entitled to damages awarded in consent, an amount that exceeds the insured's political limits.

I New Yanitza Montanez, as Personal Representative on the Farm of Yanely Gonzalez, Died Against Liberty Mutual Fire Insurance Company, No. 19-13941, United States Court of Appeals for The Eleventh Circuit (August 28, 2020) requested the annulment of the summary judgment.

BACKGROUND [19659006] Jason Brown was driving his father's vehicle in West Palm Beach, Florida, violently backing up plaintiff's vehicle and spinning into another car. The collisions injured five people driving in the two vehicles. The plaintiff was injured while driving her two minor children, three-month-old Yanely Gonzalez and eight-year-old Eduardo Gonzalez, Jr. Unfortunately, Yanely was killed. In short, the accident resulted in five victims, each claiming Jason (the driver) and his father (the owner of the vehicle).

Jason's father, Douglas Brown, had Liberty Mutual car insurance, which gave liability limits of $ 250,000 per person and $ 500,000 per accident. Douglas Brown reported his son's accident to the defendant and informed them that a child had been killed.

The defendant's coverage investigation was thorough, prompt and concluded in favor of coverage.

The PIP insurer informed the adjuster that the plaintiff had retained Toral, Garcia. & Franz as advice. The same day, the adjuster called Mr. Toral's office. The plaintiff's lawyer did not return the adjustment calls for more than one month. The PIP adjuster similarly informed the defendant that Eduardo Gonzalez Jr. had also suffered "serious injuries", including a head injury, after being thrown out of the vehicle. Despite the fact that no one received any communication from the plaintiff and did not receive any medical records or bills for any of the four complainants undergoing medical treatment, the defendant sent a letter to the lawyer for all the plaintiffs on March 4, 2010 stating that it made as much as $ 250,000 per person and $ 500,000 per accident policy limits available to settle the damages resulting from the accident. The respondent stated that it would organize a conciliation conference to help all complainants reach a distributed conciliation.

Finally, after a few months, Lewis Jack called the claimant and stated that he and Toral represented the plaintiff. Almost four weeks later, the plaintiff's lawyer sent his first correspondence to the defendant regarding the plaintiff's claim. In that letter, the plaintiff preventively rejected any offer from the defendant to resolve the plaintiff's erroneous death claim and stated that the defendant should have immediately offered the $ 250,000 policy limit instead of trying to resolve all the victims' claims at a conciliation conference. The complainant never made a claim to resolve the erroneous death claim for the police borders of $ 250,000 per person. With regard to the personal injury claim, the plaintiff's letter requested that Liberty Mutual bid $ 125,000 for the plaintiff's personal injury claim and $ 125,000 for Eduardo Gonzalez Jr.'s personal injury claim. The plaintiff's and Eduardo Gonzalez Jr.'s personal injury claim. Defendant also offered the remaining $ 250,000 available police limit to resolve the false death claim raised for the infant killed in the accident and later forwarded a check to Plaintiff's attorney. against the insured, which, among other things, raises their claims for personal injuries and incorrect deaths. All claims other than the false death claim were finally settled with the insured's cooperation, a consent judgment of $ 8.25 million against the insured for the false death claim. to his insured. The insurer's duty in good faith obliges the insurer to advise the insured on settlement options, to advise on the probable outcome of disputes, to warn of the possibility of excessive judgment and to advise the insured on all measures he can take to avoid the same. The obligation also requires the insurer to examine the facts, take fair account of a settlement offer that is not unreasonable according to the facts and, if possible, decide whether a reasonably prudent person facing the prospect of paying the total recovery would do so. When an insurer violates its duty, an action against bad faith can be brought against the insurer.

No reasonable jury could find the defendant acting in bad faith

The Eleventh Circuit concluded that the defendant opened immediately after the report of the accident. an application and initiated an investigation. Through his own investigation, the defendant quickly established that there were several victims who were not disclosed by the insured and that there were a total of five tortfeasors. The defendant diligently examined the allegations of the occupants of the other vehicle and received updates on the extent of their injury and their medical care. The defendant worked to do the same for the plaintiff and could obtain limited information from the plaintiff's personal injury carrier. The defendant identified the plaintiff's lawyer, initiated contact and repeatedly tried to engage the plaintiff's advice, all to no avail. Consequently, the defendant remained in the dark regarding the plaintiff's attorney's assessment of damages claims from the plaintiff and Eduardo Gonzalez Jr. In view of the lawyer's radio silence, the defendant also lacked any knowledge of whether the plaintiff would be willing to settle the false death claim of $ 250,000.

Upon completion of the coverage investigation and within 32 days of being notified of the accident, the defendant offered the full insurance limits to promote a global multi-claim solution. Despite the fact that the plaintiff never even tried to communicate with the defendant – let alone demand a settlement – before the defendant made the full policy boundaries available.

In view of the lack of communication from the plaintiff, the eleventh district could not see any evidence in the minutes indicating that the defendant knew that he was exposing his insured to excessive liability by not immediately offering the full insurance limits for wrongful death and by proposing a global conciliation conference 32 days after the first learning of the accident and before he received any of the medical

Seeing facts in the light that are most favorable to the plaintiff and given the overall circumstances, the eleventh circuit could not find any evidence to suggest that the defendant unreasonably subjected his insured to a sentence that exceeded his political limits. Consequently, no reasonable jury could find that the defendant acted in bad faith.

When an insurance company faces several claims for damages from a single accident and the insurance limits are insufficient to compensate all complainants, it faces an important and difficult situation. for himself and his insured. Liberty did what it needed to do: it carried out a thorough investigation that quickly determined the inadequacy of the available borders, offered it to all injured and sought alternative dispute resolution to calculate the distribution of available funds. Instead of working fairly, the plaintiff and her attorneys entered into an agreement with the insured to agree on a multi-million dollar judgment that can be collected from the case of bad faith. Since there was no bad faith and the rather, exceptionally fast, thorough investigation and offer of complete political boundaries, the good deed was punished with a bad suit of faith which Liberty had to defend by a summary judgment and defeat an appeal to the eleventh circle. The other injured were left with only personal assets insured by Liberty and their PIP or UIM coverage available. In some states, leaving an insured person without available insurance can be considered unfaithful but was not a problem in this case.


© 2020 – Barry Zalma. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance industry. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award.

For the past 52 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claims staff to become professionals in insurance claims.

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