Thursday, June 22, 2017

Insurance -- Uninsured motorist -- Bad faith -- Under Florida law, an insured is entitled to a determination of liability and full extent of damages in UM contract action before filing a first-party bad faith action, and that determination of damages is binding in a subsequent bad faith case, with the caveat that parties have a right to appellate review of statutory-damages determination before it becomes binding in subsequent bad faith case


26 Fla. L. Weekly Fed. C1629aTop of Form

Insurance -- Uninsured motorist -- Bad faith -- Under Florida law, an insured is entitled to a determination of liability and full extent of damages in UM contract action before filing a first-party bad faith action, and that determination of damages is binding in a subsequent bad faith case, with the caveat that parties have a right to appellate review of statutory-damages determination before it becomes binding in subsequent bad faith case -- Statutory-damages determination in parties' underlying breach-of-contract action does not bind the parties in the present bad faith case, where defendant UM insurance provider did not receive appellate review of damages determination -- Defendant insurer was denied its right to appellate review of properly preserved claims of error in the damages determination when district court of appeal did not review the errors alleged to extent such errors may have impacted damages beyond policy maximum -- Insurer's failure to take any additional actions after district court of appeal issued its opinion did not waive insurer's right to object to using the damages verdict in subsequent bad-faith suit in district court -- District court erred in granting partial summary judgment on binding effect of verdict in parties' breach-of-contract case -- Insurer is entitled to new damages determination

MARY BOTTINI, as Personal Representative of the Estate of Gerard Bottini, Plaintiff-Appellee, v. GEICO, Defendant-Appellant. 11th Circuit. Case No. 15-12266. Argument Calendar. June 15, 2017. Appeal from the U.S. District Court for the Middle District of Florida (No. 8:13-cv-00365-EAK-AEP).

(Before TJOFLAT and MARCUS, Circuit Judges, and STEELE,* District Judge.)

(TJOFLAT, Circuit Judge.) In this § 1292(b) interlocutory appeal, we consider a narrow issue concerning claims against uninsured/underinsured motorist (“UM”) insurance1 providers under Florida law. Florida, by statute, imposes a duty on insurers to settle their policyholders' claims in good faith. Fla. Stat. § 624.155. If a UM insurer fails to settle a legitimate claim within the statutory time limit, its policyholder may obtain, through two lawsuits, two sets of damages: one for breach of contract up to the policy maximum and another for bad faith for the full amount of the policyholder's injury (“statutory damages”).2 Here, the parties disagree about whether the Court in this bad-faith case is bound by the state court jury's determination of damages in the underlying UM breach-of-contract action.

During the pendency of this appeal -- but prior to oral argument -- the Florida Supreme Court held that the determination of damages in a UM contract case is binding in a subsequent bad-faith case. Fridman v. Safeco Ins. Co. of Ill., 185 So. 3d 1214, 1216 (Fla. 2016) [41 Fla. L. Weekly S62a]. Critical to this appeal, however, Fridman contained a caveat that the parties have a right to appellate review of the statutory-damages determination before it becomes binding in the subsequent bad-faith case. Id. at 1226. We conclude that the defendant, GEICO, did not receive appellate review of the statutory-damages determination in the parties' underlying breach-of-contract case. Therefore, that damages determination does not bind the parties in this bad-faith case. We thus reverse the District Court's order granting partial summary judgment on the binding effect of the verdict in the Circuit Court's breach-of-contract case, and hold that the parties must again litigate statutory damages.

I.

This case began tragically. On March 3, 2007 at around 12:10 AM, Gerard Bottini was traveling on I-75 in Hillsborough County, Florida. A car ahead of him caught fire and began emitting smoke, obscuring his view of the road. As a result, he lost control of his vehicle, which left the roadway, rolled over, and ejected him. He died later that day from his injuries.

The vehicle Mr. Bottini was driving was insured by a GEICO policy that provided $50,000 of UM coverage. The car that caught fire was underinsured for purposes of Fla. Stat. § 627.727. After Mr. Bottini's death, Mary Bottini, his wife, became the personal representative of Mr. Bottini's estate. In the months following the crash, Ms. Bottini's lawyer sent two letters to GEICO demanding payment of the policy maximum because Mr. Bottini was not at fault, and GEICO had possession of crash reports supporting that conclusion. GEICO denied the requests, stating that it was still conducting its own investigation to determine whether Mr. Bottini was at fault for the accident, which would render the coverage inapplicable.

On August 8, 2007, 104 days after Ms. Bottini's lawyer sent her first letter to GEICO and 158 days after the crash, she filed a Civil Remedy Notice of Insurer Violation (“CRN”) with the Florida Department of Financial Services. Filing the CRN is a statutory prerequisite to filing a bad-faith claim against an insurer. Fla. Stat. § 624.155(3). As required by § 624.155(3)(b)(1), Ms. Bottini's CRN listed the statutory provisions that she alleged GEICO was violating by failing to honor her claim.3 GEICO responded to Ms. Botini's CRN on October 5, 2007, stating that its investigation had led it to conclude that smoke from the vehicle in front of Gerard Bottini did not cause him to lose control of his vehicle, it had not acted in bad faith, and it would “continue to make every attempt to resolve this claim amicably.” About two weeks later, in an apparent change of heart, GEICO sent Ms. Bottini's lawyer a check for the full $50,000, including with it a complete release of liability for any related claims.4 Ms. Bottini rejected the release of liability and returned the check.

In April 2008, Ms. Bottini sued GEICO in the Circuit Court for Hillsborough County, Florida seeking benefits under the UM policy. GEICO defended on the basis that Mr. Bottini was negligent in driving his vehicle and such negligence was either the sole or contributing cause of the accident. Ms. Bottini countered that the vehicle that caught fire ahead of Mr. Bottini was maintained and operated negligently, and that negligence caused the crash, not any breach of duty committed by Mr. Bottini.

The case was tried to a jury, and the jury found for Ms. Bottini. It decided that Mr. Bottini was not negligent, that both the operator and owner of the smoking vehicle were negligent, and that GEICO was therefore liable. The jury also decided the full extent of damages arising from the accident -- $103,552 to the estate; $14,522,478 to Ms. Bottini for loss of support, services, companionship, and pain and suffering; and around $5,400,000 to each of Mr. Bottini's three children for loss of support and services, parental companionship, instruction and guidance, and pain and suffering. In total, the jury found damages amounting to $30,872,266.

Following the verdict, GEICO filed motions for new trial and remittitur, but those were denied. It then filed a motion in the Circuit Court to limit the judgment to the $50,000 policy maximum, and that motion was granted. Thus, after reciting the jury's $30,872,266 damages verdict and assessing setoffs,5 the Court entered a final judgment for $50,000.

GEICO appealed the judgment to the Second District Court of Appeal. It sought a new trial on several grounds, three of which were pertinent to the computation of damages. It argued that Ms. Bottini's counsel impermissibly attacked the character of the driver of the vehicle that caught fire, that Ms. Bottini's counsel made a highly inflammatory closing argument, and that $30,000,000 in damages was excessive and against the “manifest weight of the evidence.” GEICO also contended that the judgment clearly reflected a “punitive component” as a result of “prejudicial and improperly admitted evidence and argument.”

The Second District affirmed the judgment in a short per curiam opinion that reads in its entirety as follows:

Geico General Insurance Company raised five issues in this appeal. We conclude that none of the issues warrants reversal. We note that Geico's arguments include claims of error that impacted the amount of damages determined by the jury. The jury verdict found that the Estate's damages were $30,872,266. But the judgment amount entered by the trial court against Geico is $50,000, based on the applicable insurance policy limits. Based on the evidence presented, we are satisfied that even if Geico were correct that errors may have affected the jury's computation of damages, in the context of this case and the amount of the judgment, any such errors were harmless. Thus, we do not address further Geico's claims of error.

Geico Gen. Ins. Co. v. Bottini, 93 So. 3d 476, 477 (Fla. Dist. Ct. App. 2012) [37 Fla. L. Weekly D1731a].

Judge Altenbernd wrote separately to address the elephant in the room -- the effect of the jury's calculation of damages in the UM suit on the inevitable, forthcoming bad-faith lawsuit:

This appeal is motivated by the lawsuit that both parties know will follow. The Estate will sue GEICO under section 624.155, Florida Statutes (2006), for failure to settle this claim at an earlier time . . .

The statute does not explain how the finder of fact in the next lawsuit determines the “total amount” of the claimant's damages. Not unreasonably, both sides in this appeal anticipate that the Estate will attempt to use the verdict in this case as evidence of the total amount of damages in the next lawsuit.

Constitutionally, this court is given power to review final judgments for reversible error. We can also write an opinion affirming a judgment as to issues that, if we were to reach an opposite result, would lead to a reversal of the judgment. But I am unconvinced that we have a scope of review that allows us to rule on issues that do not and cannot affect the judgment on appeal. In this case, given that we decided to affirm on the issues relating to liability, GEICO essentially wants this court to write an opinion that affirms the judgment, but “reverses” the verdict as to elements of damage not included within the judgment. I simply conclude that this court does not have the power to issue such an opinion. The fact that such an opinion might be convenient for purposes of the next lawsuit or facilitate its settlement does not change the authority given to me under the Florida Constitution.

Accordingly, this concurrence permits both sides to know that at least one judge on this panel has not decided that the verdict is correct or incorrect. . . . If I am refusing to do that which the law requires me to do, I would assume that by writ of mandamus the supreme court could order me to conduct such a review. If so ordered, I would perform that review.

Id. at 478 (Altenbernd, J., concurring) (footnote omitted). GEICO did not seek discretionary postjudgment review in the Second District or in the Supreme Court of Florida.

Ms. Bottini brought this action in the District Court on February 8, 2013, invoking the Court's diversity jurisdiction under 28 U.S.C. § 1332. She alleged that GEICO acted in bad faith, violating several provisions of Fla. Stat. § 624.155. She contended that she was therefore entitled, in accordance with Fla. Stat. § 627.727(10), to the full amount of damages designated by the jury in the UM breach-of-contract lawsuit. Ms. Bottini then moved the District Court for summary judgment on the issue of damages, arguing that the Circuit Court jury verdict fixed the damages at $30,872,266. GEICO countered, arguing that it never received appellate review of that damages verdict; therefore, giving effect to the verdict in the bad-faith lawsuit would violate its right to procedural due process.

The District Court granted Ms. Bottini's motion, holding that the verdict was binding as the measure of damages in the bad-faith suit. GEICO subsequently filed a motion for reconsideration of the District Court's order, or alternatively, to certify the order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b).6 The District Court denied reconsideration but certified the order for interlocutory appeal. This Court agreed to hear the appeal.

II.

In this Part, we explain the mechanics of an insurer-bad-faith suit under Florida law. Part II.A details the history of Florida's bad-faith cause of action. Part II.B explains the requirements for a plaintiff to prevail on a bad-faith claim against a UM insurer, including the Florida Supreme Court's recent clarification in Fridman that the underlying UM breach-of-contract suit determines forward-looking damages.

A.

In 1982, the Florida legislature enacted § 624.155, which imposed on insurers a duty to administer policyholders' claims in good faith and equipped policyholders with a cause of action against insurers that failed to do so. Fla. Stat. § 624.155(1)(b)(1); Fridman, 185 So. 3d at 1220. Accordingly, an insurer that fails to settle a legitimate claim in good faith is subject to liability both for breaching its contract with the policyholder -- the insurance policy -- and for violating Florida's bad-faith statute.

Before a policyholder can bring a bad-faith claim under § 624.155, he must first give notice to the insurance company. Fla. Stat. § 624.155(3)(a). The policyholder's notice, the CRN, must allege specific statutory violations and detail the facts giving rise to, and the policy language relevant to, the claim.7 Fla. Stat. § 624.155(3)(b)(1)-(5). After the insurer receives the CRN, it has sixty days to either pay the policyholder or “correct[ ]” “the circumstances giving rise to the violation.” Fla. Stat. § 624.155(3)(d). If the insurer pays or corrects the circumstances giving rise to the violation, the policyholder's bad-faith cause of action is extinguished. Id. If the insurer does neither, like GEICO here, the policyholder may proceed with his suit.

For several years after the statute was enacted, Florida courts struggled to understand how to calculate damages in UM bad-faith suits. The Florida Supreme Court initially interpreted the statute to allow damages in excess of the UM policy only when the damages were “the natural, proximate, probable, or direct consequence of the insurer's bad faith actions.” McLeod v. Cont'l Ins. Co., 591 So. 2d 621, 626 (Fla. 1992). In other words, if an insurer's bad-faith conduct amounted to a simple delay in settling a legitimate claim, a policyholder ordinarily could not recover damages beyond the policy maximum and the costs associated with litigation. Fridman, 185 So. 3d at 1221. The legislature rebuked the McLeod interpretation, enacting § 627.627(10), which reads as follows:

The damages recoverable from an uninsured motorist carrier in an action brought under s. 624.155 shall include the total amount of the claimant's damages, including the amount in excess of the policy limits, any interest on unpaid benefits, reasonable attorney's fees and costs, and any damages caused by a violation of a law of this state. The total amount of the claimant's damages is recoverable whether caused by an insurer or by a third-party tortfeasor.

Fla. Stat. § 627.627(10) (emphasis added). Florida courts thereafter acknowledged that § 627.727(10) “clearly and unambiguously reflects the legislative intent that the damages in section 624.155 bad faith actions shall include any amount in excess of the policy limits.” Fridman, 185 So. 3d at 1221 (emphasis in original).

B.

Before a policyholder may file a bad-faith lawsuit in which she alleges that her UM insurer failed to settle a meritorious claim in good faith, she must first establish that her claim was, indeed, meritorious. Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So. 2d 1289, 1291 (Fla. 1991). She does so by obtaining a determination that her insurer is contractually liable under her UM insurance policy. Id; Fridman, 185 So. 3d at 1224. In addition to establishing contractual liability, the policyholder must also obtain a full determination of damages arising out of the event giving rise to the UM claim.8 As the Florida Supreme Court put it, “the determination of the existence of liability on the part of the uninsured tortfeasor and the extent of the [insured's] damages are elements of a cause of action for bad faith.” Vest v. Travelers Ins. Co., 753 So. 2d 1270, 1275 (Fla. 2000) [25 Fla. L. Weekly S177a] (quoting Blanchard, 575 So. 2d at 1291) (quotation marks omitted) (alteration in original).

But how is the damages element established in a bad-faith action? Is the initial statutory damages determination binding in the subsequent bad-faith action? Previous courts had reached conflicting conclusions.9 The Florida Supreme Court recently clarified in Fridman that the damages determination in the underlying UM judgment does in fact bind the court in the subsequent bad-faith action:

[I]t is obvious that the UM verdict to which the insured is entitled must be binding in the bad faith action. Because a determination of the full extent of the insured's damages is one of the prerequisites to a bad faith cause of action, to preclude a UM verdict in excess of the policy limits from being used in the bad faith case would force the parties to relitigate the issue of damages a second time prior to the bad faith trial. This would be an obvious waste of judicial and litigant resources. It would also result in serious, unintended consequences, such as “running the almost-certain risk of inconsistent verdicts; potentially raising comity issues between state and federal courts; creating a discrepancy . . . between first- and third-party bad faith claims; placing an inexplicable burden on plaintiffs to prove their cases twice; and causing a great deal of judicial inefficiency.”

185 So. 3d at 1224-25 (citation omitted).

Given the significance of the initial statutory-damages determination, the Court held that parties have a right to appeal it. The Court rejected the argument that appellate courts lack jurisdiction to review damages in excess of the policy maximum and additionally rejected the Second District's reasoning in Bottini that errors in calculating damages are subject to mere harmless-error review:

[W]e do not agree . . . that the appellate court is without jurisdiction to review the UM verdict.

District courts of appeal have appellate jurisdiction under article V, section 4(b)(1), of the Florida Constitution. While district courts do not have jurisdiction over all non-final orders, in this case, the final judgment including the determination of the full extent of damages was properly within the jurisdiction of the [District Court of Appeal]. Further, once the trial court denied Safeco's motion for a new trial, rejecting a claim of an excessive verdict, that order also became subject to appellate review -- as Safeco evidently understood when it filed its appeal in this case.

We therefore respectfully disagree with the view that a district court lacks jurisdiction to review an excess verdict, if the amount of damages was not included within the final judgment.

. . .

We also disagree with the view taken by the Second District Court of Appeal in Bottini, in which it held that “even if Geico were correct that errors may have affected the jury's computation of damages,” any errors in the jury's computation of damages were “harmless” . . . . [T]he damages reflected in the UM verdict are significant relative to the UM policy limits because the damages will eventually become part of the subsequent bad faith case.

Id. at 1226-28. Denying the parties a right to appeal the binding damages determination, the Court reasoned, could give rise to procedural due process problems. Id. at 1226. To prevent such problems, the Court concluded that damages determinations in this context are not binding unless both parties are afforded an “opportunity . . . to obtain appellate review of any timely raised claims of error in the determination of damages obtained in the UM trial.” Id.

Fridman therefore provides the framework we must apply in determining whether the UM verdict in the case underlying this appeal is binding in the bad-faith action in the District Court.

III.

To determine whether the UM verdict now binds GEICO, we must resolve two questions. First, did GEICO actually receive appellate review of the Circuit Court's determination of statutory damages? Second, if GEICO did not receive appellate review, did its failure to pursue further review of the Second District's decision waive any objection it might have had to using that determination in the bad-faith suit? We address each question in turn.

A.

To determine whether GEICO received appellate review of the Circuit Court jury's damages calculation, we must examine the Second District's decision. As noted above, the decision offers little to parse:

Geico General Insurance Company raised five issues in this appeal. We conclude that none of the issues warrants reversal. We note that Geico's arguments include claims of error that impacted the amount of damages determined by the jury. The jury verdict found that the Estate's damages were $30,872,266. But the judgment amount entered by the trial court against Geico is $50,000, based on the applicable insurance policy limits. Based on the evidence presented, we are satisfied that even if Geico were correct that errors may have affected the jury's computation of damages, in the context of this case and the amount of the judgment, any such errors were harmless. Thus, we do not address further Geico's claims of error.

Bottini, 93 So. 3d at 477. Though it is short, the opinion reveals that the Second District did not review the errors GEICO alleged to the extent such errors may have impacted damages beyond the $50,000 policy maximum. The Court refused to do so because it believed that “any such errors were harmless.” Id. Because the Second District chose not to address GEICO's alleged errors, we hold that it failed to provide the appellate review to which GEICO was entitled under Florida law.

Our interpretation of the Second District's opinion is not shaken by the Court's statement that “none of the issues [raised by GEICO] warrants reversal.” Id. As explained above, the Court reached this conclusion not because it found that errors had not tainted the jury's computation of damages, but because it mistakenly believed that the alleged errors, “even if” they had occurred, would not warrant reversal. Nowhere does the Court say that the jury did not commit errors, and to nevertheless interpret its opinion in that way would render superfluous its discussion of harmlessness.

We are not the only Court to interpret the Second District's opinion in this way. In Fridman, the Florida Supreme Court repudiated the Second District's harmless-error approach. 185 So. 3d at 1228. If the Second District had actually reviewed the errors alleged by GEICO, then the Florida Supreme Court would have nothing to repudiate. But the Florida Supreme Court did repudiate because it, like us, read the Second District's opinion as demonstrating the Second District's failure to review for errors due to a mistaken belief that such a review would be inconsequential “in the context of [the] case.” Bottini, 93 So. 3d at 477.

Because the Second District did not review the errors alleged by GEICO, we conclude that GEICO has been denied its “right to appellate review of properly preserved claims of error in the determination of damages.” Fridman, 185 So. 3d at 1224. We now turn to whether GEICO waived its right to appellate review by failing to take any additional actions after the Second District issued its opinion.

B.

As Ms. Bottini observes, GEICO had several options available to it to seek review of the Second District's decision. It could have sought review in the Second District by moving the Court to clarify or rehear its decision under Fla. R. App. P. 9.330(a); it could have moved the Second District to rehear the case en banc under Fla. R. App. P. 9.331; it could have sought review in the Florida Supreme Court under Fla. R. App. P. 9.330(a) or 9.120; and it could have taken Judge Altenbernd's suggestion to file a writ of mandamus in the Florida Supreme Court. Did its failure to take any of these steps deprive it of the right to object to using the damages verdict in the District Court?

We think not. Had GEICO failed to appeal the verdict to the Second District, the answer may be different. However, the key difference between an appeal to a district court of appeal and all of the alternative procedures listed above is that the alternative procedures are all discretionary. None guarantees that GEICO would have had its argument considered. By contrast, a litigant can appeal to a district court of appeal as a matter of right. Fla. Const. art. V, § 4. When, in Fridman, the Florida Supreme Court characterized appellate review as a right afforded to the parties, we think it must have been referring to appellate review in a district court of appeal, the only court in which the litigants have a right to appellate review. Fridman, 185 So. 3d at 1224. This is why the Second District erred for failing to review GEICO's alleged errors -- it did not vindicate that right.

Moreover, it is not self-evident how a waiver rule other than failing to appeal to a district court of appeal would work in this case. Because GEICO had several options available to it, which options would have satisfied a waiver rule? Would GEICO have to exhaust its remedies and pursue all of them? Would it have to pursue only one, and, if so, which one? Perhaps Ms. Bottini might argue that GEICO had to do something. But GEICO did do something: it appealed to the Second District, the only court in which it was guaranteed to have its argument heard. We do not read in to Fridman a mandate to pursue additional discretionary review after a district court of appeal issues its judgment.

True, the Florida Supreme Court in Fridman discussed the District Court's order in this case in which the District Court seems to acknowledge the existence of some form of waiver to appellate review. In doing so the Court does not explicitly disapprove of the District Court's reasoning:

When the Bottini litigants proceeded with the bad faith case, Judge Kovachevich came to the conclusion that the amount of damages is necessarily determined in the underlying UM action and also determined that the insurer failed to pursue further relief to review the Second District's decision. See Bottini v. Geico Gen. Ins. Co., No. 8:13-CV-365-T-17AEP, 2014 WL 4749054, at *12 (M.D.Fla. Sept. 23, 2014).

Fridman, 185 So. 3d at 1228. Nevertheless, even if we interpret the Florida Supreme Court as implicitly endorsing some sort of waiver rule by referring to the District Court's statement that “the insurer failed to pursue further relief to review the Second District's decision,” such a waiver must jibe with the rest of the opinion, which characterizes appellate review as a “right.” Id. at 1224, 1227. We do not think the Florida Supreme Court was referring to a right to file a piece of paper with a court that had no obligation to consider the contents of the paper. Because GEICO did, in fact, raise its objection in the Second District -- the only Court required to consider its argument -- we do not add a gloss onto Fridman requiring a litigant to pursue further, discretionary review after a district court of appeal renders its decision.

IV.

We therefore conclude that the measure of damages determined by the jury in Bottini's underlying UM suit does not bind the parties in the present bad-faith action in the District Court. GEICO is entitled to a new damages determination. Accordingly, we REVERSE the grant of partial summary judgment and REMAND for further proceedings consistent with this opinion.

SO ORDERED.

__________________

*Honorable John E. Steele, United States District Judge for the Middle District of Florida, sitting by designation.

1UM insurance protects policyholders against losses caused by UMs -- drivers who lack sufficient insurance to cover the damages they cause to others.

2Statutory damages “include the total amount of the claimant's damages, including the amount in excess of the policy limits . . . and any damages caused by a violation of a law of [Florida].” Fla. Stat. § 627.727(10). Pursuant to the statute, after a claimant's damages are determined, a court would also assess “interest on unpaid benefits, reasonable attorney's fees and costs.” Id. “The total amount of the claimant's damages is recoverable whether caused by an insurer or by a third-party tortfeasor.” Id.

3The CRN specified that GEICO was allegedly violating Fla. Stat. §§ 624.155(1)(a)(1) and 624.155(1)(b)(1). Section 624.155(1)(a)(1) provides, in relevant part, that “[a]ny person may bring a civil action against an insurer when such person is damaged [b]y a violation of . . . Section 626.9541(1)(i).” Section 626.9541(1)(i) prohibits

[c]ommitting or performing with such frequency as to indicate a general business practice any of the following:

a. Failing to adopt and implement standards for the proper investigation of claims;

. . .

c. Failing to acknowledge and act promptly upon communications with respect to claims;

. . .

e. Failing to affirm or deny full or partial coverage of claims . . . .

Section 624.155(1)(b)(1) provides a civil action against an insurer who fails to “attempt[ ] in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests.”

4GEICO's tender of the $50,000 took place 76 days after the initial filing of the CRN, which meant it could not avail itself of Fla. Stat. § 624.155(3)(d), which provides, “No [bad-faith] action shall lie if, within 60 days after filing [the CRN], the damages are paid or the circumstances giving rise to the violation are corrected.”

5The setoffs resulted from settlements the Bottinis received from two other insurance policies. One was a $25,000 settlement tendered to the Plaintiff by the insurer of the vehicle that caught fire, and the other was a $1,000,000 settlement from Transcontinental Insurance Company. Transcontinental also insured the Bottini vehicle and provided UM benefits. Transcontinental tendered its $1,000,000 policy limit after receiving the same CRN that GEICO received. It, however, tendered its policy maximum within the sixty-day limit set forth in Fla. Stat. § 624.155(3)(d) and therefore relieved itself of liability under §624.155. See supra note 4.

628 U.S.C. § 1292(b) provides, in full,

When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order: Provided, however, That application for an appeal hereunder shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order.

7Specifically, the statute requires that:

(b) The notice shall be on a form provided by the department and shall state with specificity the following information, and such other information as the department may require:

1. The statutory provision, including the specific language of the statute, which the authorized insurer allegedly violated.

2. The facts and circumstances giving rise to the violation.

3. The name of any individual involved in the violation.

4. Reference to specific policy language that is relevant to the violation, if any. If the person bringing the civil action is a third party claimant, she or he shall not be required to reference the specific policy language if the authorized insurer has not provided a copy of the policy to the third party claimant pursuant to written request.

5. A statement that the notice is given in order to perfect the right to pursue the civil remedy authorized by this section.

Fla. Stat. § 624.155(3)(b)(1)-(5).

8As the Florida Supreme Court noted in Fridman, however, contractual liability and damages need not be determined by a jury -- “an agreed settlement, arbitration, or stipulation before initiating a bad faith cause of action” would work as well. 185 So. 3d at 1224.

9Compare King v. Gov't Emps Ins. Co., No. 8:10-CV-977-T-30AEP, 2012 WL 4052271 (M.D. Fla. Sept. 13, 2012) (noting that the jury verdict in the UM suit was not binding on the subsequent bad-faith suit); Harris v. Geico Gen. Ins. Co., 961 F. Supp. 2d 1223 (S.D. Fla. 2013), aff'd, 619 F. App'x 896 (11th Cir. 2015) (same) with Wiggins v. Allstate Prop. & Cas. Ins. Co., No. 13-23354-CIV, 2015 WL 1396583, at *4 (S.D. Fla. Mar. 6, 2015), report and recommendation adopted sub nom. Wiggins v. Allstate Prop. & Cas. Ins. Co., No. 13-CV-23354, 2015 WL 1402970 (S.D. Fla. Mar. 18, 2015) (finding that the UM jury verdict was binding as a measure of damages in the bad-faith suit); Cadle v. Geico Gen. Ins. Co., No. 6:13-CV-1591-ORL-31GJK, 2014 WL 4983791, at *2 (M.D. Fla. Oct. 6, 2014) (same).

* * *

Torts -- Automobile accident -- Evidence -- Hearsay -- Trial court abused discretion by excluding from evidence statements made by plaintiff to emergency medical technician at accident scene and contained in EMS report -- Evidence was admissible as an admission -- Error in excluding evidence was not harmless -- Defendant entitled to new trial on liability


42 Fla. L. Weekly D1426aop of Form

Torts -- Automobile accident -- Evidence -- Hearsay -- Trial court abused discretion by excluding from evidence statements made by plaintiff to emergency medical technician at accident scene and contained in EMS report -- Evidence was admissible as an admission -- Error in excluding evidence was not harmless -- Defendant entitled to new trial on liability

RING POWER CORPORATION; DIESEL CONSTRUCTION COMPANY; and MARK DAVID QUANDT, Appellants, v. GERARDO CONDADO-PEREZ and NANCY RODRIGUEZ-VENTURA, Appellees. 2nd District. Case Nos. 2D16-353 and 2D16-397. (Consolidated) Opinion filed June 21, 2017. Appeal from the Circuit Court for Pasco County; Linda H. Babb, Judge. Counsel: Carrie Ann Wozniak of Akerman LLP, Orlando; and Katherine E. Giddings of Akerman LLP, Tallahassee, for Appellants. Barbara Green of Barbara Green, P.A., Coral Gables; and Betsey T. Herd of Morgenstern & Herd, P.A., Tampa, for Appellees.


BY ORDER OF THE COURT:

Appellants' unopposed motion for rehearing and/or clarification of opinion is granted. Appellees' motion for clarification is granted. The prior opinion dated April 7, 2017, is withdrawn, and the attached opinion is issued in its place. No further motions for rehearing will be entertained.

(BLACK, Judge.) In these consolidated appeals, Ring Power Corporation, Diesel Construction Company, and Mark David Quandt (collectively, Ring Power) challenge the judgments entered in favor of Gerardo Condado-Perez (Mr. Condado) and Nancy Rodriguez-Ventura (Ms. Rodriguez). Ring Power contends that two evidentiary rulings of the trial court were erroneous and contributed to the verdict in favor of Mr. Condado and Ms. Rodriguez. We agree with Ring Power, reverse the final judgments, and remand for a new trial. Because we reverse the final judgments, we also reverse the costs judgments predicated on those judgments.1

The underlying negligence action arose out of a motor vehicle accident that occurred on the afternoon of December 8, 2012. While in the course and scope of his employment with Ring Power, Mr. Quandt was driving a large service truck owned by Diesel Construction northbound on I-75 in Pasco County. Mr. Quandt's truck collided with a Ford Expedition driven by Mr. Condado and occupied by Ms. Rodriguez, which was also travelling northbound on I-75. Mr. Quandt's truck then collided with a third vehicle. It was undisputed that there was a mattress in the northbound lanes of the interstate, causing cars to stop or swerve unexpectedly. Further, the parties agreed that there were two northbound lanes of I-75, a median between the north and southbound lanes, and a narrow shoulder adjacent to that median. The agreed-upon facts end there; the parties gave opposing versions of what occurred.

Mr. Condado alleged that he did nothing to contribute to the accident. He claimed that for two or more miles prior to the accident he had been travelling in the left lane. He stated that he saw traffic slowing ahead of him due to someone pulling a mattress out of the roadway and claimed he did not suddenly swerve from the right lane into the left lane in front of Mr. Quandt's vehicle. Mr. Condado testified that he saw Mr. Quandt's vehicle directly behind him; he alleged that Mr. Quandt was driving too fast and following too closely. When it appeared that Mr. Quandt's vehicle was going to rear-end Mr. Condado's, Mr. Condado steered his vehicle left, into the narrow shoulder. He testified that because of the narrowness of the shoulder, he was unable to completely exit the left lane of the interstate. He further testified that upon steering his vehicle into the left shoulder, the rear of his vehicle was forcefully struck by Mr. Quandt's large service truck, causing Mr. Condado's vehicle to roll over. As a result of the roll over, Mr. Condado and Ms. Rodriguez suffered significant injuries.

Conversely, Mr. Quandt claimed that the accident was caused entirely by Mr. Condado suddenly and unexpectedly swerving from the right lane into the left lane and then into the left shoulder, directly into Mr. Quandt's path of travel. Mr. Quandt testified that the mattress was less than 100 yards away when the traffic in front of him reacted by slowing and stopping. He testified that he was able to reduce his speed significantly and that he attempted to avoid the collision with Mr. Condado's vehicle by moving left into the shoulder and median. But because Mr. Condado swerved further into the median in front of him, the accident was unavoidable.

Each party called an expert witness to advance his respective theory of the case. Mr. Condado called Dr. Elliott Stern, a professional engineer, who concluded that Mr. Quandt caused the accident by driving too fast for the conditions and the surrounding slowing vehicles. Mr. Quandt called Arnold Wheat, an accident investigator certified in traffic reconstruction, who concluded that Mr. Condado's vehicle dramatically and significantly swerved to the left -- into and across Mr. Quandt's path of travel -- causing the accident.

The critical evidentiary rulings that Ring Power submits necessitate a new trial both involve an alleged admission by Mr. Condado made to Kyle Paton, a Pasco County Fire Rescue paramedic and emergency medical technician, who arrived on the accident scene shortly after 911 was called. In addition to providing medical assistance to Ms. Rodriguez, Mr. Paton spoke with Mr. Condado about the accident. Based on that conversation, Mr. Paton prepared a mandatory patient care report (EMS Report). The EMS Report provided that “Husband states he swerved to avoid a mattress in the road and lost control of the car and went off the road” (Mr. Condado's statement). Mr. Paton prepared the EMS Report on the day of the accident.

Prior to trial, Mr. Condado filed a motion in limine to prevent the above-quoted statement from being introduced as evidence. Although he stipulated to the authenticity of the EMS Report, he argued that the statement within the EMS Report was not trustworthy because it referred to Mr. Condado as Ms. Rodriguez's “husband,” but the two were not married. Mr. Condado also argued that the statement was inadmissible because it lacked a proper foundation; he claimed that he is not a proficient English speaker and denied making the statement at all. Ring Power filed a response to the motion in limine noting that Mr. Condado testified in deposition that he had been married to Ms. Rodriguez for ten years. Ring Power further argued that Mr. Condado's denial of the statement was a matter of weight and credibility for the jury rather than admissibility. Ring Power contended that the statement was admissible as a spontaneous statement, excited utterance, and admission by a party opponent pursuant to sections 90.803(1), (2), and (18), Florida Statutes (2015). Ring Power also noted that although the statement was hearsay within hearsay, it was admissible because both the EMS Report and Mr. Condado's statement within the report were subject to an exception under section 90.803.

Finding the statement inadmissible through the EMS Report, the trial court granted the motion in limine.2 At trial, the court denied Ring Power's request to reconsider the ruling on the motion in limine and its request to consider the EMS Report in its entirety as a recorded recollection pursuant to section 90.803(5). The court also excluded from evidence Mr. Paton's deposition testimony, which included a discussion of Mr. Condado's statement and confirmed that Mr. Paton included in his report what he had been told by Mr. Condado at the scene.

In opening statements, Mr. Condado argued that although the defense would suggest that Mr. Condado swerved and caused the accident, the evidence would prove otherwise. At that time, Ring Power renewed its request to use Mr. Condado's statement in the EMS Report based on Mr. Condado's opening statement. The court denied the request.

During trial, Mr. Condado testified that he was very nervous after the accident and thought he was going to die when his vehicle was rolling over. Ring Power again advanced its argument that Mr. Condado's statement in the report was a spontaneous statement or excited utterance and should be admitted. It marked Mr. Paton's deposition transcript and video as well as the unredacted EMS Report as exhibits and requested that the court admit them and publish them to the jury. The court declined to reconsider its prior ruling and considered the exhibits as proffers. At that time, Mr. Condado proffered Mr. Paton's deposition cross-examination testimony. The redacted EMS Report was introduced not by Ring Power but by Mr. Condado; it was admitted into evidence without objection. Subsequently, the trial court again declined Ring Power's request to reconsider its prior ruling on the admission of Mr. Condado's statement.

At the close of the evidence, the case was submitted to the jury, which was asked to answer three questions:

1. Was there negligence on the part of Mark David Quandt which was a legal cause of injury to [Mr. Condado and Ms. Rodriguez]?

2. Was there negligence on the part of Gerardo Condado[ ] which was a contributing legal cause of injury to [Mr. Condado and Ms. Rodriguez]?

3. Was there negligence on the part of an unknown person responsible for the presence of a mattress on the roadway which was a contributing legal cause of injury to [Mr. Condado and Ms. Rodriguez]?

The jury answered yes to all three questions, and it assigned 65% liability to Mr. Quandt, 33% liability to Mr. Condado, and 2% liability to an unknown person responsible for the mattress in the roadway. The total damages awarded to Ms. Rodriguez were $330,557.65 for past and future medical expenses and $75,000 for pain and suffering; the total damages awarded to Mr. Condado were $193,486.35 for past and future medical expenses and $50,000 for pain and suffering.

Ring Power moved for a new trial, reiterating its prior arguments on the admissibility of Mr. Condado's statement and Mr. Paton's deposition. That motion was denied.

On appeal, Ring Power contends that the trial court abused its discretion in making the evidentiary determinations that Mr. Condado's statement in the EMS Report and Mr. Paton's deposition were inadmissible and that such errors cannot be considered harmless. We agree.

The trial court erred in granting Mr. Condado's motion in limine and in denying Ring Power's repeated requests to introduce Mr. Condado's statement into evidence. That the EMS Report itself was admissible is not contested here; it is only the admissibility of Mr. Condado's statement within that report that is at issue.3 Notably, the EMS Report was introduced into evidence by Mr. Condado; there was no objection to its admission. Ring Power sought to introduce Mr. Condado's statement within the EMS Report as substantive evidence, contending that the statement met a number of hearsay exceptions. Because we conclude that Mr. Condado's statement was an admission, and therefore admissible pursuant to section 90.803(18)(a), we decline to address whether it was also a spontaneous statement or excited utterance or could otherwise have been admitted as a recorded recollection.4

An admission is “[a] statement that is offered against a party and is . . . [t]he party's own statement in either an individual or a representative capacity.” § 90.803(18)(a). That is, the statement need only be (1) a party's and (2) offered against that party to qualify as an admission. Of course, the admission must also be relevant -- “tending to prove or disprove a material fact.” § 90.401. Statements of a party offered by an opponent regarding causation in negligence actions are generally considered admissions. See McKay v. Perry, 286 So. 2d 262, 263 (Fla. 2d DCA 1973) (stating that party's statement to neighbor regarding ownership of a dog in a dog-bite case would be admissible as an admission); Otis Elevator Co. v. Youngerman, 636 So. 2d 166, 167 n.1 (Fla. 4th DCA 1994) (noting that plaintiff's statement to nurse regarding fall was an admission); Wilkinson v. Grover, 181 So. 2d 591, 593-94 (Fla. 3d DCA 1965) (concluding that plaintiff's statements to physician as to how fast plaintiff was driving at time of accident were admissions). However, the statements of a party need not speak directly to liability to be admissions. See, e.g., Jones v. Alayon, 162 So. 3d 360, 365 (Fla. 4th DCA 2015) (concluding that statement by party regarding how money was spent was an admission). “It is well settled that an admission against interest may be introduced into evidence as substantive evidence of the truth of the matter stated.” Seaboard Coast Line R.R. Co. v. Nieuwendaal, 253 So. 2d 451, 452 (Fla. 2d DCA 1971); accord McKay, 286 So. 2d at 263. “This is so even though the person making the admission against interest subsequently denies making such admission.” Seaboard Coast Line, 253 So. 2d at 452; see also Charles W. Ehrhardt, Florida Evidence § 803.18 (2014 ed.) (“If a statement is offered as substantive evidence under [section 90.803(18)] it is not necessary to lay a foundation by asking the individual who made the statement whether he or she did so.”).

Here, Ring Power sought to introduce Mr. Condado's statement -- attributed to Mr. Condado and included in a properly admitted business medical record -- as evidence against Mr. Condado. It clearly meets the statutory requirements of an admission.

Mr. Condado maintains that because he challenged the trustworthiness of the EMS Report and his statement within it, his statement was properly excluded. Provided that medical records, including EMS records, otherwise meet the requirements of a business record under section 90.803(6)(a), their trustworthiness is presumed. Nat'l Union Fire Ins. Co. of Pittsburgh v. Blackmon, 754 So. 2d 840, 842-43 (Fla. 1st DCA 2000) (citing Love v. Garcia, 634 So. 2d 158, 160 (Fla. 1994)). However, the party opposing the introduction of the medical records may rebut that presumption. Love, 634 So. 2d at 160 (“[T]he burden is on the party opposing the introduction to prove the untrustworthiness of the records.”).

Here, the EMS Report was introduced into evidence by Mr. Condado; there was no opposition to its admission. Ring Power points out the inconsistency in Mr. Condado's position on his statement within the EMS Report based on his introduction of the report: by introducing the report Mr. Condado conceded the trustworthiness of the document and yet maintains that a singular statement within it is not trustworthy.

Mr. Condado does not acknowledge that inconsistency or the fact that the EMS Report was appropriately admitted into evidence. Rather, Mr. Condado maintains that his statement is untrustworthy because it refers to Mr. Condado as Ms. Rodriguez's “husband” when in fact Mr. Condado and Ms. Rodriguez are not married and because Mr. Condado is not proficient in English. He also argues that his statement is untrustworthy because the report does not mention that his vehicle rolled over in the accident. As to the former argument, in his deposition and at trial Mr. Condado admitted that he sometimes referred to Ms. Rodriguez as his wife and that he may have done so on the date of the accident.

As to the latter argument, Mr. Condado fails to recognize that his statement is admissible under a hearsay exception separate and distinct from the business record exception; and the admission exception has no trustworthiness component. While hearsay evidence is generally excluded as “inherently untrustworthy because the party against whom such evidence is offered has had no opportunity to test its veracity by cross-examining the statement at the time the statement was made,” admissions of a party opponent are an exception to the rule because “a party can hardly complain that he had no opportunity to cross-examine himself at the time the admissions were made.” Metropolitan Dade County v. Yearby, 580 So. 2d 186, 188 (Fla. 3d DCA 1991). That is, there is no inherent untrustworthiness in the admission.

Although Mr. Condado's statement was not admissible as a statement for purposes of medical diagnosis or treatment or as part of the business records exception, see Nat'l Union Fire, 754 So. 2d at 843, it was otherwise admissible as an admission, see State Farm Fire & Cas. Co. v. Higgins, 788 So. 2d 992, 1007-08 (Fla. 4th DCA 2001) (“Ingalls's statements to various physicians were admissible as admissions of a party under section 90.803(18)(a). It was not necessary to also qualify the statements under section 90.803(4), as statements for the purpose of medical diagnosis or treatment.”). See also Charles W. Ehrhardt, Florida Evidence § 803.18 (2014 ed.) (“The evidence [meeting the requirements of section 90.803(18) as an admission] is admissible under the exception, and the party who made the out-of-court statement may offer evidence to dispute its truthfulness.”). Moreover, any objection Mr. Condado had to the trustworthiness of the document as a whole -- including those based on facts absent from the report -- was waived by his introduction of the report. Cf. Ohler v. United States, 529 U.S. 753, 755 (2000) (“Generally, a party introducing evidence cannot complain on appeal that the evidence was erroneously admitted.”); Dorfman v. Schwabl, 777 So. 2d 427, 429-30 (Fla. 5th DCA 2000) (“We cannot find the court erred, when Dorfman raised the issue about which he now complains.”).

It is apparent that the trial court's evidentiary rulings on the admissibility of Mr. Condado's statement were abuses of discretion. However, “[i]n order for an appealing party to be successful in a challenge to a judgment based on ‘the improper admission or rejection of evidence,' the appellate court must conclude ‘after an examination of the entire case . . . that the error[s] complained of ha[ve] resulted in a miscarriage of justice.' ” Fla. Inst. for Neurologic Rehab., Inc. v. Marshall, 943 So. 2d 976, 979 (Fla. 2d DCA 2006) (quoting § 59.041, Fla. Stat. (2006)). The court's determination of whether there has been a miscarriage of justice is based on a harmless error analysis. Special v. W. Boca Med. Ctr., 160 So. 3d 1251, 1256-57 (Fla. 2014). “To test for harmless error, the beneficiary of the error has the burden to prove that the error complained of did not contribute to the verdict. Alternatively stated, the beneficiary of the error must prove that there is no reasonable possibility that the error contributed to the verdict.” Id. at 1256. Mr. Condado has not established that the exclusion of his statement did not contribute to the verdict. Mr. Condado's statement was admissible, highly relevant, and not unfairly prejudicial. Cf. Opsincs v. State, 185 So. 3d 654, 658-59 (Fla. 4th DCA 2016) (concluding that defendant's statement after accident had little probative value and was highly prejudicial); Kutner v. Dep't of Highway Safety & Motor Vehicles, 568 So. 2d 973, 974 (Fla. 3d DCA 1990) (concluding that exclusion of evidence was proper where its probative value was substantially outweighed by the danger of unfair prejudice given other evidence presented).

The exclusion of Mr. Condado's statement was not harmless. There were two distinct theories advanced about the cause of the accident. Mr. Quandt's defense was that Mr. Condado caused the accident by suddenly swerving. Mr. Condado's statement in the EMS Report expressly corroborated the defense and Mr. Quandt's theory of liability. See Phillips v. Ficarra, 618 So. 2d 312, 314 (Fla. 4th DCA 1993) (concluding that error in excluding medical records was not harmless where records contradicted defendant's theory of the case). Whether Mr. Condado swerved into Mr. Quandt's path or Mr. Quandt was driving too fast and too closely were issues for the jury to decide after weighing the evidence, including Mr. Condado's admission. See Seaboard Coast Line, 253 So. 2d at 452; Wilkinson, 181 So. 2d at 594. Accordingly, Ring Power is entitled to a new trial as to liability.

Although the error in excluding Mr. Condado's statement necessitates a new trial, we briefly comment on the error in excluding Mr. Paton's deposition. The record establishes that Ring Power attempted to introduce and publish Mr. Paton's deposition to the jury; however, it is not clearly established in the record that the trial court ruled on Ring Power's request independent from its fourth request that the unredacted EMS Report be introduced into evidence. We note that Mr. Paton was unavailable at the time of trial and that Florida Rule of Civil Procedure 1.330(a)(1) permits the use of a deposition “for any purpose permitted by the Florida Evidence Code.”

The final judgments are reversed. The case is remanded for a new trial in accordance with this opinion.

Reversed and remanded. (KELLY and CRENSHAW, JJ., Concur.)

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1The trial court entered two partial final judgments as to damages -- one in favor of Mr. Condado and one in favor of Ms. Rodriguez -- and reserved jurisdiction to award fees and costs. Ring Power appealed those judgments. The trial court subsequently entered two costs judgments which were also appealed. This court consolidated the appeals for all purposes.

2Initially, the trial court ruled that Mr. Condado's statement could be admitted through the testimony of Mr. Paton but that it could not be admitted through the EMS Report. This appears to be because the trial court believed the EMS Report itself was inadmissible hearsay.

3Ring Power contends that Mr. Condado stipulated to the admission of the EMS Report as a business record under section 90.803(6) by agreeing that a records custodian was unnecessary. See Kelly v. State Farm Mut. Auto. Ins., 720 So. 2d 1145, 1146 (Fla. 5th DCA 1998); Phillips v. Ficarra, 618 So. 2d 312, 313 (Fla. 4th DCA 1993). Mr. Condado disagrees. However, we need not consider any stipulation because the admission of the EMS Report is not at issue on appeal; moreover, Mr. Condado himself introduced the EMS Report into evidence at trial.

4See, e.g., Nat'l Union Fire Ins. Co. of Pittsburgh v. Blackmon, 754 So. 2d 840, 843-44 (Fla. 1st DCA 2000); Visconti v. Hollywood Rental Serv., 580 So. 2d 197, 198 (Fla. 4th DCA 1991) (Garrett, J., concurring).

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