Geico General Insurance Co. v. Harvey
2013 WL 238162, 109 So. 3d 236 (2013)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A third-party bad faith claim against an insurer for failure to settle may not be brought as a crossclaim within the underlying tort action but must be raised in a separate, subsequent cause of action.
Facts:
- James Harvey was insured by GEICO General Insurance Company (GEICO) under an automobile liability policy with a $100,000 limit.
- In August 2006, Harvey's vehicle collided with a motorcycle, resulting in the death of the motorcycle rider.
- The decedent's estate made a claim against Harvey for negligence.
- Harvey alleged that GEICO failed to settle the estate's claim when it should have.
- Harvey also alleged that GEICO failed to notify him that the estate wanted to take a pre-suit statement from him, which he claims led to the lawsuit.
Procedural Posture:
- The decedent's estate sued James Harvey in a Florida state trial court for negligence.
- A jury returned a verdict against Harvey, awarding the estate $8 million in damages, an amount substantially exceeding his policy limit.
- The estate, as plaintiff, successfully moved to add GEICO as a party defendant to the action for the purpose of entering final judgment.
- Harvey, the defendant, then filed a crossclaim against his co-defendant, GEICO, alleging insurance bad faith.
- GEICO's attempt to remove the case to federal court was rejected as untimely, and the case was remanded to the state trial court.
- In the state trial court, GEICO filed a motion to dismiss or sever Harvey's bad faith crossclaim.
- The trial court denied GEICO's motion.
- GEICO, as petitioner, sought a writ of certiorari from the Florida Fourth District Court of Appeal to review the trial court's order.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does Florida law permit an insured defendant to file a bad faith crossclaim against their insurer within the original tort action after a verdict has been entered against the insured?
Opinions:
Majority - Gross, J.
No. A bad faith crossclaim is not authorized within the original tort action because it is a separate and independent cause of action that does not arise from the same transaction or occurrence. The court reasoned that the underlying tort claim arises from the physical event of the accident, whereas the bad faith claim arises from the insurer's alleged breach of its duty to act in good faith during the claims-handling process. Citing Florida Supreme Court precedent in cases like Blanchard and Cunningham, the court emphasized that a cause of action for third-party bad faith does not accrue until a final judgment in excess of the policy limits is entered against the insured. Therefore, it cannot be part of the same 'transaction or occurrence' as the original tort, as required for crossclaims under Florida Rule of Civil Procedure 1.170(g). The court also noted that the nonjoinder statute, which allows an insurer to be added post-verdict, is solely for the purpose of entering and enforcing the judgment for covered losses, not for litigating new claims like bad faith.
Analysis:
This decision reinforces the procedural wall between an underlying tort action and a subsequent bad faith claim in Florida. By requiring a separate lawsuit for bad faith, the court prevents juries in negligence cases from being prejudiced by the existence of insurance and the details of claims handling. The ruling clarifies that a bad faith claim is not merely a continuation of the original dispute but a new, distinct legal controversy that ripens only after liability and excess damages have been established. This has a significant impact on litigation strategy, discovery, and jurisdictional issues, such as the right to removal to federal court, which was a key factor in this case.
