Friday, 10 August 2018 19:53

11th Circuit Upholds $2.9 Million Bad Faith Verdict Against GEICO

Written by Greg Land, Property Casualty 360


The Eleventh Circuit Court of Appeals upheld a trial court in ruling that GEICO General Insurance was not entitled to a new trial after a Florida jury found it engaged in bad faith, leaving the insurer on the hook for a $2.9 million judgment.

The insurer had argued there was insufficient evidence to support a jury’s finding, but the July 20 per curiam opinion authored by Judges Gerald Tjoflat, Charles Wilson and Kevin Newsom said the plaintiff’s injuries were likely well over the $250,000 policy limits following a 2010 auto accident, but that it still refused to tender its policy limits until it was hit with a lawsuit.


“Here, the evidence presented was more than enough for a jury to find that GEICO acted in bad faith,” the unpublished opinion said.


Possible Violations of GEICO’s Internal Policies


The judges also said the trial court did not err by admitting evidence concerning possible violations of GEICO’s internal policies and its conduct of settlement discussions after its ultimate policy-limit tender was rejected.


As detailed in the order and court filings, Margaret Randall was severely injured in a wreck with Melissa Servold in Key West on Oct. 27, 2010, and was airlifted to the Ryder Trauma Center in Miami-Dade County with a severe brain injury.


Servold was covered under a GEICO policy issued to her mother, Beverly Allen, with limits of $250,000 per person and $500,000 per incident.


GEICO was notified almost immediately, and within two days a representative had left a phone message for Randall and her husband, Thomas Bannon. A GEICO field adjuster went to the hospital the next week and knew that Randall was still in the intensive care unit.


By that time, according to the complaint Randall and Bannon would later file against GEICO, “the medical and ambulance bills alone were likely far in excess of GEICO’s policy limits.”


GEICO Refused To Tender Policy Limits


Nonetheless, GEICO refused to tender its policy limits, and on Nov. 19, 2010, the couple sued Servold and Allen in Monroe County Circuit Court.


GEICO tendered its $250,000 limit three days later to the plaintiff’s lawyers, Michael Olin and Ian Osur of Miami’s Michael S. Olin P.A., who rejected the offer the next day. Osur has since left the firm.

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