Defining Occurrence – When Policy Definitions Do Not Apply To All Coverages
September 24, 2020
The Florida Supreme Court recently resolved a conflict among Florida’s lower state and federal courts regarding an insured’s right to a determination of its damages and liability in an underlying uninsured motorist (“UIM”) case prior to bringing an action for bad faith against the insurer. In Fridman v. Safeco, the Court held that the insured is entitled to have a jury decide the full measure of his or her damages and liability for an automobile accident in the UIM case, even if the insurer confesses judgment in the amount of the policy limits before trial. That verdict then supplies the measure of damages in a subsequent bad faith case.
Florida law is well established that in a UIM case, where the insured obtains a verdict in excess of the policy limits, the court can only enter judgment in the amount of the policy limits. Where the law has been unclear is whether a full jury verdict in excess of the policy limits supplies the measure of damages in a subsequent bad faith case. Previously, Florida’s lower courts were split on that question. Some held that utilizing the verdict in the bad faith case denies the insurer due process because it cannot assert errors affecting the jury verdict, while others held that the verdict supplies the measure of damages because the insurer has the right to attack the validity of the jury verdict on the appeal of the UIM case.
Relying on those propositions, the insurer, in this case, Safeco, confessed judgment shortly before trial in a UIM case, they argued that the case should be concluded because the insured obtained all the relief she could obtain. Therefore, argued Safeco, empaneling a jury to try the case would be a futile trial conducted without jurisdiction. The trial court disagreed and tried the case to verdict, and Safeco appealed.
Ultimately, the Supreme Court held that the trial court was correct (disagreeing with the intermediate court’s decision to the contrary). Therefore, the law is now clear that in the UIM case, the plaintiff is free to try his or her case to a jury in order to establish his or her damages, notwithstanding the insurer’s confession of judgment in the amount of the policy limits. More importantly, that verdict will then supply the measure of damages in the subsequent bad faith claim, because the insurer has the right to assert any errors in the trial on appeal. This decision brings much-needed clarity to an otherwise murky area of the law.
We will continue to keep you informed of the ever-changing legal landscape in Florida. Should you have any questions, please contact one of the partners in our extra-contractual department.