Hooks v. Geico General Insurance Company, Inc.

Filing 50

ORDER denying 23 Defendant's Motion for Summary Judgment. Mediation to be completed no later than March 9, 2015. Final pretrial conference reset for April 20, 2015, at 10:00 a.m. Jury trial set for trial term commencing on May 4, 2015, at 9:30 a.m. Joint Final Pretrial Statement due April 13, 2015. Signed by Judge Marcia Morales Howard on 1/9/2015. (JW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
JOHN F. HOOKS,
Plaintiff,
-vs-

Case No. 3:13-cv-891-J-34JBT

GEICO GENERAL INSURANCE
COMPANY, INC.,
Defendant.
________________________________________
ORDER
THIS CAUSE is before the Court on GEICO General Insurance Company’s Motion
for Summary Judgment (Doc. No. 23; Motion) filed on September 2, 2014. In support of the
Motion, Defendant filed numerous exhibits, including the Florida Traffic Crash Report (Doc.
No. 24-1; Crash Report) for the accident that occurred on May 27, 2003, the Affidavit of
Claims Manager Rita Collier (Doc. No. 24-2; Collier Aff.), the Activity Log for the relevant
claim (Doc. Nos. 24-3–24-7; Activity Log), as well as various correspondence such as
demand letters, Defendant’s responses to those demand letters, proposals for settlement,
and notices from Defendant to Plaintiff (Doc. Nos. 24-8–24-16, 24-18–24-41), an internal email (Doc. No. 24-17), and the Deposition of Carlos Orozco (Doc. No. 24-42; Orozco Dep.).
On September 22, 2014, Plaintiff filed Plaintiff’s Response and Memorandum in Opposition
to GEICO’s Motion for Summary Judgment (Doc. No. 28; Response). In addition to copies
or partial copies of the exhibits Defendant filed in support of its Motion, see Exhibits A-C to
Response (Doc. Nos. 28-1–28-3), Exhibits I-J to Response (Doc. Nos. 28-9–28-10), Plaintiff

filed the following in support of his opposition: excerpts from the deposition testimony of
David Seavey taken both in this case (Doc. No. 28-4; Seavey Dep.) and the case of Sowell
v. GEICO Casualty Insurance Company, 3:12-cv-226-MCR/EMT (N.D. Fla.) (Doc. No. 28-8;
Second Seavey Dep.), an excerpt of the Deposition of Melody Kiehl Toma taken in the case
of Griffith v. GEICO General Insurance Company, 3:13-cv-460-J-32TEM (M.D. Fla.) (Doc.
No. 28-15; Toma Dep.), printouts from Defendant’s Mainframe (Doc. No. 28-5) and its
ClaimQ Activity Log (Doc. No. 28-7), the Affidavit of John Hooks (Doc. No. 28-6; Hooks Aff.),
excerpts from documents entitled “Claims Manual” (Doc. No. 28-14) and “TCR2 Preparatory
and Post School” (Doc. No. 28-16), a complete copy of “Lesson Two, Good Faith Claim
Handling, Continuing Unit Manual” (Doc. No. 28-18; Continuing Unit Manual), and the
Deposition of Rutledge R. Liles (Doc. No. 29-1; Liles Dep.).1 With the Court’s leave,
Defendant filed a reply to the Response on November 6, 2014, see GEICO General
Insurance Company’s Reply to Hooks’s Response and Memorandum in Opposition to
GEICO’s Motion for Summary Judgment (Doc. No. 35; Reply), and Plaintiff filed a sur-reply
on November 21, 2014, see Plaintiff’s Sur-Reply to Defendant GEICO’s Reply to Hooks’
Response and Memorandum in Opposition to GEICO’s Motion for Summary Judgment (Doc.
No. 39; Sur-Reply). The Motion is fully briefed and ripe for judicial review.
Under Rule 56, Federal Rules of Civil Procedure (Rule(s)), “[t]he court shall grant
summary judgment if the movant shows that there is no genuine dispute as to any material

1
For reasons unclear to the Court, Plaintiff filed both an excerpt and a complete copy of
the Continuing Unit Manual as separate exhibits (Doc. Nos. 28-11, 28-18), and an excerpt of the Liles
Deposition (Doc. No. 28-13) in addition to the complete copy of his testimony as a supplemental exhibit
to the Response. See Notice of Filing Supplemental Exhibit to Plaintiff’s Response and Memorandum
in Opposition to GEICO’s Motion for Summary Judgment (Doc. 28) (Doc. No. 29).

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fact and the movant is entitled to judgment as a matter of law.” Rule 56(a). The record to
be considered on a motion for summary judgment may include “depositions, documents,
electronically stored information, affidavits or declarations, stipulations (including those
made for purposes of the motion only), admissions, interrogatory answers, or other
materials.” Rule 56(c)(1)(A).2 An issue is genuine when the evidence is such that a
reasonable jury could return a verdict in favor of the nonmovant. See Mize v. Jefferson City
Bd. of Educ., 93 F.3d 739, 742 (11th Cir. 1996) (quoting Hairston v. Gainesville Sun Publ’g
Co., 9 F.3d 913, 919 (11th Cir. 1993)). “[A] mere scintilla of evidence in support of the nonmoving party’s position is insufficient to defeat a motion for summary judgment.” Kesinger
ex rel. Estate of Kesinger v. Herrington, 381 F.3d 1243, 1247 (11th Cir. 2004) (citing
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)).
The party seeking summary judgment bears the initial burden of demonstrating to the
court, by reference to the record, that there are no genuine issues of material fact to be
determined at trial. See Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991).
“When a moving party has discharged its burden, the non-moving party must then go
beyond the pleadings, and by its own affidavits, or by depositions, answers to

2
Rule 56 was revised in 2010 “to improve the procedures for presenting and deciding summaryjudgment motions.” Rule 56 advisory committee’s note 2010 Amendments.

The standard for granting summary judgment remains unchanged. The
language of subdivision (a) continues to require that there be no
genuine dispute as to any material fact and that the movant be entitled
to judgment as a matter of law. The amendments will not affect
continuing development of the decisional law construing and applying
these phrases.
Id. Thus, case law construing the former Rule 56 standard of review remains viable and is applicable
here.
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interrogatories, and admissions on file, designate specific facts showing that there is a
genuine issue for trial.” Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590, 593-94 (11th Cir.
1995) (internal citations and quotation marks omitted). Substantive law determines the
materiality of facts, and “[o]nly disputes over facts that might affect the outcome of the suit
under the governing law will properly preclude the entry of summary judgment.” Anderson,
477 U.S. at 248. In determining whether summary judgment is appropriate, a court “must
view all evidence and make all reasonable inferences in favor of the party opposing
summary judgment.” Haves v. City of Miami, 52 F.3d 918, 921 (11th Cir. 1995) (citing
Dibrell Bros. Int’l, S.A. v. Banca Nazionale Del Lavoro, 38 F.3d 1571, 1578 (11th Cir. 1994)).
As a preliminary matter, the Court notes that in the Reply, Defendant GEICO General
Insurance Company (GEICO) objects to the consideration of the Second Seavey deposition
because it was not taken in this case. See Reply at 3-4. Rule 32, which governs the use
of depositions, provides:
A deposition lawfully taken and if, required, filed in any federal- or state-court
action may be used in a later action involving the same subject matter
between the same parties, or their representatives or successors in interest,
to the same extent as if taken in the later action. A deposition previously
taken may also be used as allowed by the Federal Rules of Evidence.
Fed. R. Civ. P. 32(a)(8). GEICO cites the first sentence of Rule 32(a)(8) as a clear
prohibition on the use of depositions in actions that do not involve the same subject matter
between the same parties. See Reply at 3-4. In response, Plaintiff John Hooks (Hooks)
contends that the second sentence of Rule 32(a)(8) permits the use of depositions as the
Federal Rules of Evidence allow, which include using prior inconsistent statements to attack
a witness’s credibility. See Sur-Reply at 6. The Eleventh Circuit has previously affirmed the
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district court’s consideration of deposition testimony given in a separate litigation that did not
involve all of the same parties. The Nippon Credit Bank, Ltd. v. Matthews, 291 F.3d 738
(11th Cir. 2002), abrogated on other grounds by Diamond Crystal Brands, Inc. v. Food
Movers Int’l, Inc., 593 F.3d 1249 (11th Cir. 2010). In Matthews, the court explained:
“Depositions are generally admissible provided that the party against whom they are
admitted was present, represented, or reasonably noticed.” Id. at 751 (citing Fed. R. Civ.
P. 32(a)). Indeed, “[a] deposition taken in a different proceeding is admissible if the party
against whom it is offered was provided with an opportunity to examine the deponent.” Id.
(citing Fed. R. Evid. 804(b)(1)). Under this authority, the Second Seavey deposition is
admissible, as GEICO was a defendant in the Sowell action, and therefore was represented
at his deposition.3
Moreover, Seavey’s deposition testimony in the Sowell case is not dispositive of the
instant Motion. In this action, Hooks asserts a claim of bad faith against GEICO. See
generally Complaint (Doc. No. 2). Hooks alleges that he caused a motor vehicle accident
resulting in injuries to Donald Hollenbeck (Hollenbeck), and GEICO acted in bad faith by
failing to settle Hollenbeck’s claim against him within his policy limits and failing to inform him
of his likely exposure to an excess judgment. See id. Under Florida law, an insurer handling
the defense of claims against its insured owes “a duty to use the same degree of care and

3

Although there is authority from the Tenth Circuit declining to follow the Eleventh Circuit,
the Matthews decision is binding on this Court. See Tingey v. Radionics, 193 F. App’x 747 (10th Cir.
2006). Further, while the court in Tingey rejected Matthews, it found that consideration of a deposition
taken in another proceeding was nevertheless proper on summary judgment because the deposition
could be construed as an affidavit and the opposing party could notice an additional deposition or submit
an affidavit to controvert the testimony. See id. at 765-66. Thus, even under the Tenth Circuit’s
reasoning, consideration of the Second Seavey deposition is appropriate.
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diligence as a person of ordinary care and prudence should exercise in the management of
his own business.” Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla.
1980). In Boston Old Colony, the Florida Supreme Court explained this standard:
For when the insured has surrendered to the insurer all control over the
handling of the claim, including all decisions with regard to litigation and
settlement, then the insurer must assume a duty to exercise such control and
make such decisions in good faith and with due regard for the interests of the
insured. This good faith duty obligates the insurer to advise the insured of
settlement opportunities, to advise as to the probable outcome of the litigation,
to warn of the possibility of an excess judgment, and to advise the insured of
any steps he might take to avoid same. The insurer must investigate the
facts, give fair consideration to a settlement offer that is not unreasonable
under the facts, and settle, if possible, where a reasonably prudent person,
faced with the prospect of paying the total recovery, would do so. Because
the duty of good faith involves diligence and care in the investigation and
evaluation of the claim against the insured, negligence is relevant to the
question of good faith.
Id. “Bad faith may be inferred from a delay in settlement negotiations which is willful and
without reasonable cause.” Powell v. Prudential Property & Cas. Ins. Co., 584 So. 2d 12,
14 (Fla. 3d DCA 1991).
Further, the fact that an insurer ultimately tendered the policy limits “does not
automatically insulate an insurer from liability for bad faith.” Id. Instead, whether an insurer
acted in bad faith is determined based on the totality of the circumstances. Berges v. Infinity
Ins. Co., 896 So. 2d 665, 680 (Fla. 2004); see also Batchelor v. Geico Cas. Co., No. 6:11cv-1071-Orl-37GJK, 2014 WL 7224619, at *6 (M.D. Fla. Dec. 16, 2014) (“The question of
bad faith extends to the insurer’s ‘entire conduct in the handling of the claim,’ and liability
turns on the fact-intensive, totality of the circumstances standard.”) (internal citations
omitted). “To fulfill the duty of good faith, an insurer does not have to act perfectly,

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prudently, or even reasonably. Rather, insurers must ‘refrain from acting solely on the basis
of their own interests in settlement.’” Novoa v. Geico Indem. Co., 542 F. App’x 794, 796
(11th Cir. 2013) (per curiam) (quoting State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So. 2d
55, 58 (Fla. 1995)). Moreover, “no obligation exists to accept a settlement offer (or to tender
policy limits in advance of a settlement offer) without time for investigation.” Johnson v.
Geico General Ins. Co., 318 F. App’x 847, 851 (11th Cir. 2009) (per curiam). Last, whether
an insurer acted in good faith is generally a jury question; however, summary judgment is
appropriate “where the undisputed facts would allow no reasonable jury to conclude the
defendant acted in bad faith.” Id. at 849-50.
In its Motion, GEICO argues that it is entitled to summary judgment because there
is no evidence to create an issue of material fact as to whether it acted in bad faith. See
generally Motion. It contends that it responded to Hollenbeck’s settlement demands with
reasonable counteroffers based on the information GEICO had at the time. See id. at 18-21.
GEICO states that it promptly conducted an independent investigation of Hollenbeck’s
injuries and offered Hooks’ policy limits as soon as it became apparent that Hollenbeck’s
injuries would exceed that amount. See id. at 7, 19-21. As to GEICO’s alleged failure to
communicate with Hooks, GEICO maintains that there is no record evidence to support such
allegations because it “engaged in innumerable communications with Hooks throughout the
claims handling process which kept Hooks informed of settlement opportunities.” Id. at 22.
In Hooks’ Response, he argues that GEICO had sufficient information from the two offers
of settlement Hollenbeck’s attorney sent GEICO which included medical reports and records
to determine that Hollenbeck suffered damages that exceeded the $25,000 policy limits.
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See Response at 2-6, 13-15, Twenty Day Offer to Settle dated January 20, 2004, Exhibit 5
to Motion and Exhibit B to Response (Doc. Nos. 24-9, 28-2; Initial Offer to Settle); Letter
dated May 19, 2004, Exhibit 7 to Motion, Exhibit I to Response (Doc. Nos. 24-11, 28-9;
Second Offer to Settle).
Specifically, Hooks contends that even though the Initial Offer to Settle and
supporting documentation informed GEICO that Hollenbeck, a thirty-one year old, had
suffered a 12% permanent impairment as a result of the accident and would likely need
$2,000-$3,000 worth of medical treatment per year for the rest of his life, GEICO only
offered to settle Hollenbeck’s claim for $2,000. See Response at 3-4, 13. In response,
GEICO has submitted evidence suggesting that it had reason to discount the damages set
forth in the Initial Offer to Settle based upon the existence of prior worker’s compensation
and bodily injury claims as well as the speculative nature of Hollenbeck’s future damages,
and that it reasonably requested further information. See Orozco Dep. at 18-19, 87.
However, Hollenbeck’s counsel provided additional information in the Second Offer to Settle,
explaining that the prior worker’s compensation claim did not result in permanent injury and
that Hollenbeck had not made a previous bodily injury claim, and again demanded the
$25,000 policy limits. GEICO acknowledged receipt of the Second Offer to Settle but
requested further medical documentation in the form of MRI films that Hollenbeck’s counsel
stated he did not have. See Second Offer to Settle; Exhibit 8 to Motion, Exhibit J to
Response (Doc. Nos. 24-12, 28-10; GEICO’s Response to Second Offer to Settle). In
GEICO’s Response to Second Offer to Settle, it made another counteroffer of $11,500.
Hooks contends that this second offer was not in his best interests because it exposed him
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to an excess judgment when GEICO could and should have settled Hollenbeck’s claim
within the policy limits. See Response at 14-15. GEICO does not explain how it reached
the figure of $11,500 or why it completely discounted Hollenbeck’s alleged future medical
expenses.
Hooks also argues that GEICO acted in bad faith in failing to advise him of the
probable outcome of Hollenbeck’s litigation. See Sur-Reply at 4-5. There is evidence that
GEICO notified Hooks that an excess judgment was possible, but the record fails to
establish whether GEICO ever advised Hooks of the likely outcome of Hollenbeck’s claim.
Upon review of the evidence submitted, the Court finds that there are genuine issues of
material fact as to whether GEICO’s settlement offers were reasonable in light of the
information it had at the time, and whether GEICO sufficiently advised Hooks of the probable
outcome of litigation against him that preclude the entry of summary judgment. Therefore,
the Motion is due to be denied.
In light of the foregoing, it is ORDERED:
1.

GEICO General Insurance Company’s Motion for Summary Judgment (Doc.

No. 23) is DENIED.

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2.

In light of the denial of summary judgment, the parties shall confer, agree upon

a mediator, schedule a mediation to be completed no later than March 9, 2015, and file a
notice advising the Court of the mediator and date of mediation.
3.

In order to accommodate the mediation, the final pretrial conference set for

January 20, 2015, at 10:00 a.m. is cancelled, and this case is removed from the February
2, 2015 trial term.
4.

The final pretrial conference is reset for April 20, 2015, at 10:00 a.m. The jury

trial is set for the trial term commencing on May 4, 2015, at 9:30 a.m. The Joint Final
Pretrial Statement shall be filed no later than April 13, 2015.
DONE AND ORDERED in Jacksonville, Florida, this 9th day of January, 2015.

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Copies to:
Counsel of Record

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