Hayas v. Geico General Insurance Company

Filing 116

ORDER: GEICO General Insurance Company's Motion for Summary Judgment 68 is GRANTED. Kenneth Hayas' Motion for Partial Summary Judgment 72 is DENIED. The Clerk is directed to enter judgment in favor of GEICO General Insurance Company and against Kenneth E. Hayas. After judgment is entered, the Clerk is thereafter directed to close the case. Signed by Judge Virginia M. Hernandez Covington on 12/5/2014. (AKH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
KENNETH E. HAYAS,
Plaintiff,
v.

Case No. 8:13-cv-1432-T-33AEP

GEICO GENERAL INSURANCE
COMPANY,
Defendant.
______________________________/
ORDER
This cause is before the Court pursuant to Defendant
GEICO

General

Insurance

Company’s

Motion

for

Summary

Judgment, which was filed on July 28, 2014 (Doc. # 68), and
Plaintiff

Kenneth

E.

Hayas’

Motion

for

Partial

Summary

Judgment, which was filed on July 31, 2014. (Doc. # 72). Hayas
filed

his

response

in

opposition

to

GEICO’s

Motion

on

September 2, 2014. (Doc. # 81). Thereafter, GEICO filed its
response in opposition to Hayas’ Motion on September 5, 2014.
(Doc. # 83). Both parties filed replies to the respective
motions.
Due to ongoing discovery issues and a ruling by the
Magistrate Judge that an additional limited deposition could
take place, this Court entered an Order on October 14, 2014,
directing the deposition to take place no later than November

3, 2014. (Doc. # 104). This Court further stated that “to the
extent the parties wish to use the information gathered from
[the] deposition, the parties have until November 10, 2014,
to file a supplemental memorandum limited to the ninety minute
deposition of Ms. Ryan with the Court.” (Id.). The Court
concluded all other discovery issues on October 22, 2014.
(Doc. # 106). On November 10, 2014, GEICO filed its Memorandum
in

Support

Opposition

of

its

Motion

to

Plaintiff’s

for

Summary

Motion

for

Judgment

and

in

Partial

Summary

Judgment. (Doc. # 108). After review of the record, the Court
grants GEICO’s Motion in its entirety and denies Hayas’
Motion.
I.

Background
Hayas was the owner of a 1999 Ford automobile that was

insured by GEICO. (Doc. # 5 at ¶¶ 5-6). On September 28, 2009,
while

the

insurance

policy

was

in

full

effect,

Hayas

negligently operated the automobile resulting in an accident
with William Ryan. (Id. at ¶¶ 6, 8). As a consequence, Ryan
sustained serious injuries and died due to those injuries.
(Id. at ¶ 6). At the time of the accident, Hayas’ GEICO
insurance policy provided bodily injury limits of $100,000.00
per person and $300,000.00 per occurrence. (Id. at ¶ 7).

2

Ryan’s Estate made a claim against Hayas, and GEICO
undertook to defend Hayas. (Id. at ¶¶ 9-10). Hayas alleges
that a settlement opportunity arose, but GEICO failed to
settle the claim. (Id. at ¶ 11). Instead, Ryan’s Estate
obtained a jury verdict against Hayas, and a final judgment
was entered against Hayas in Polk County, Florida, in the
total amount of $1,610,210.41. (Id. at ¶ 15).
According to GEICO, the accident was reported to GEICO
on September 29, 2009, by Leslie Bellao, and assigned to GEICO
claims examiner James Boley. (Doc. # 68 at 3). Thereafter,
GEICO learned that Ryan’s Estate had retained an attorney,
Richard E. Straughn. (Id.). GEICO spoke to Hayas on October
7, 2009, and “learned that he did not recall the accident and
had

been

prescribed

medication

approximately

six

months

earlier due to dizzy spells.” (Id.). “In correspondence dated
October 8, 2009, GEICO advised Bellao, with a copy to Hayas,
of the possibility of exposure in excess of policy limits.”
(Id.). Due to the fact that Hayas could not remember the
accident, GEICO continued to attempt to acquire the police
report in order to assess liability. (Id.). GEICO obtained
the police report on October 16, 2009, which confirmed the
details of the accident and that Hayas was liable. (Id. at
4).

3

“That same day, which was only seventeen (17) days after
the accident, GEICO made the decision to tender the policy
limits.” (Id.). GEICO’s field representative, Tracy Mills,
was assigned the task of delivering a check in the amount of
policy limits and a proposed release to [Attorney Straughn’s]
office.” (Id.). GEICO visited and attempted to call Attorney
Straughn’s office without success. (Id.). Ultimately, Mills
was able to speak with Attorney Straughn and advised him that
GEICO wished to tender the policy limits and obtain a letter
of representation. (Id.). That afternoon, Mills received a
faxed

demand

letter

from

Attorney

Straughn

stating

relevant part:
To the extent that all terms of this letter are
complied with, my clients will sign a release
releasing only your insured(s) in consideration of
your payment of all applicable policy limits. My
clients will sign a general release and will
satisfy all valid liens out of the proceeds of the
settlement. However, my clients cannot and will not
sign a release containing a hold harmless nor an
indemnity agreement. Nor will my clients accept a
release that purports to state your insured(s) are
denying liability or requesting confidentiality. .
. . Therefore, any attempt to provide us with a
release from this point forward which contains a
hold harmless or indemnity agreement or purports to
release
anyone
or
entity
other
than
your
insured(s), or denies liability or requests
confidentiality will act as a rejection of this
good faith offer.
(Id. at 5).

4

in

The

day

after

receiving

the

demand

letter,

GEICO

tendered the check for policy limits, along with a proposed
release to Attorney Straughn’s office. (Id.). On October 27,
2009, Attorney Straughn faxed correspondence to Mills at
GEICO stating that the demand had not been strictly complied
with and GEICO had instead made a counteroffer. (Id. at 6).
“As support for his position that GEICO had counter-offered,
Straughn implied that GEICO’s release did not comply with his
clients’ requirements.” (Id.).
GEICO responded to Attorney Straughn’s letter by stating
that GEICO was “trying to make every effort to resolve” the
claim. (Id. at 7). GEICO also enclosed a release that did not
contain hold harmless or indemnity language, and advised that
another check in the amount of policy limits would arrive
under

separate

cover.

(Id.).

In

a

letter

from

GEICO

to

Attorney Straughn on November 4, 2009, GEICO stated the
following:
Not all release forms precisely fit the facts and
circumstances of every claim. Should you have any
questions about any aspect of the release terms,
please call me immediately. You may also send me
any suggested changes, additions or deletions with
a short explanation of the basis for any changes
you suggest; or if you have a release that you
desire to use, please forward it to me. . . . If
you feel that there is any aspect of the enclosed
document, which does not reflect our settlement of
your claim(s), please contact me immediately so

5

that we can see that the document is revised to
reflect the exact terms of our agreement.
(Id. at 7-8).
Vickie Ryan, as Personal Representative of the Estate of
William Ryan, filed suit, with assistance of Attorney Lance
Holden, against Hayas in the Circuit Court of the Tenth
Judicial Circuit in and for Polk County, Florida on November
4,

2009.

(Id.

at

8).

Thereafter,

Attorney

Holden

sent

correspondence to GEICO on November 10, 2009. (Id.). In the
correspondence,

Attorney

Holden

acknowledged

Straughn’s

receipt of the reissued policy-limits check and enclosed the
check, which had been marked “VOID,” and a copy of the state
court complaint against Hayas in his letter to GEICO. (Id.).
Attorney Holden sent GEICO another letter and “concluded his
November

16,

[2009]

letter

by

clearly

and

unequivocally

stating that his clients would not settle for the policy
limits.” (Id. at 9). The suit filed by Ryan’s Estate against
Hayas ultimately resulted in a judgment against Hayas for the
total amount of $1,610,210.41 on October 20, 2011. (Id.).
Hayas in turn filed the present action against GEICO for
“bad faith” on May 31, 2013, and filed an Amended Complaint
on June 10, 2013. (Doc. ## 1, 5). Among other allegations,
Hayas alleges that GEICO breached its “duties of good faith

6

in the handling of the claims made against [Hayas] by acting
in bad faith.” (Doc. # 5 at ¶ 19).
GEICO filed the present Motion for Summary Judgment on
July 28, 2014. (Doc. # 68). Hayas filed his Motion for Partial
Summary Judgment on July 31, 2014. (Doc. # 72). As both
parties have filed responses and replies to the respective
Motions, the Motions for Summary Judgment are ripe for the
Court’s review.
II.

Legal Standard
Summary judgment is appropriate “if the movant shows

that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). A factual dispute alone is not enough to
defeat a properly pled motion for summary judgment; only the
existence of a genuine issue of material fact will preclude
a grant of summary judgment. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247-48 (1986).
An issue is genuine if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.

Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742

(11th Cir. 1996) (citing Hairston v. Gainesville Sun Publ’g
Co., 9 F.3d 913, 918 (11th Cir. 1993)). A fact is material if
it may affect the outcome of the suit under the governing

7

law. Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.
1997). The moving party bears the initial burden of showing
the court, by reference to materials on file, that there are
no genuine issues of material fact that should be decided at
trial. Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256,
1260 (11th Cir. 2004)(citing Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986)). “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

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)(citing Celotex, 477 U.S. at 324).
If there is a conflict between the parties’ allegations
or evidence, the non-moving party’s evidence is presumed to
be true and all reasonable inferences must be drawn in the
non-moving party’s favor. Shotz v. City of Plantation, Fla.,
344 F.3d 1161, 1164 (11th Cir. 2003). If a reasonable fact
finder evaluating the evidence could draw more than one
inference from the facts, and if that inference introduces a
genuine issue of material fact, the court should not grant
summary judgment. Samples ex rel. Samples v. City of Atlanta,
846 F.2d 1328, 1330 (11th Cir. 1988) (citing Augusta Iron &

8

Steel Works, Inc. v. Emp’rs Ins. of Wausau, 835 F.2d 855, 856
(11th Cir. 1988)). However, if the non-movant’s response
consists

of

conclusional

nothing

“more

allegations,”

than

summary

a

repetition

judgment

is

of
not

his
only

proper, but required. Morris v. Ross, 663 F.2d 1032, 1034
(11th Cir. 1981), cert. denied, 456 U.S. 1010 (1982).
II.

Analysis
Florida law authorizes an insured party to sue its

insurer for “[n]ot attempting 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.” Fla. Stat. §
624.155(b)(1). “An insurer . . . has a duty to use the same
degree of care and 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). “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.” Id.

9

In determining whether an insurer has acted in bad faith
in

handling

a

claim,

courts

apply

the

totality

of

the

circumstances standard.

Bad faith may be inferred from a delay in settlement
negotiations
which
is
willful
and
without
reasonable cause. Where liability is clear, and
injuries so serious that a judgment in excess of
the policy limits is likely, an insurer has an
affirmative
duty
to
initiate
settlement
negotiations.
Any question about the possible outcome of a
settlement effort should be resolved in favor of
the insured; the insurer has the burden to show not
only that there was no realistic possibility of
settlement within policy limits, but also that the
insured was without the ability to contribute to
whatever settlement figure that the parties could
have reached.
* * *
Finally, the ultimate tender of the policy limits
does not automatically insulate an insurer from
liability for bad faith.
Powell v. Prudential Prop. & Cas. Ins. Co., 584 So. 2d 12,
14–15 (Fla. 3d DCA 1991) (internal citations omitted); see
also Berges, 896 So. 2d at 680 (citation omitted). While the
issue of whether an insurer acted in bad faith is ordinarily
a question for the jury, courts have in certain circumstances
been able to conclude, as a matter of law, that the insurance
company did not act in bad faith. See Berges, 896 So. 2d at
680.

10

A.

Hayas’ Motion for Partial Summary Judgment

Hayas moves for entry of partial summary judgment stating
“that he is entitled to judgment as a matter of law with
regard to the determination that the Defendant’s initial
response

to

the

original

time

limited

settlement

offer

presented to resolve all claims against him was by law a
rejection of and counter-offer to said settlement offer.”
(See Doc. # 72). The October 21, 2009, demand would have
resolved

all

conditions

claims

were

met

against
by

Hayas

GEICO,

as

which

long

as

certain

incorporated

the

inclusion of affidavits of no other coverage and the provision
of a release without certain objectionable language. (Id. at
4). According to Hayas, “GEICO could have and should have
obtained a release of all claims against [] Hayas from [Ryan’s
Estate], since such a release was possible and within the
policy limits, but chose not to do so, contrary to and in
total disregard of [] Hayas’ best interests.” (Id. at 5-6).
Hayas maintains that “[t]he record and facts are clear that
GEICO provided a release to [Ryan’s Estate] that contained
material

settlement

terms

specifically

prohibited

by

the

offer to settle.” (Id. at 6-7).
GEICO maintains that Hayas “has not moved for judgment
on all or any part of the claim, but has merely asked the

11

Court to render an opinion regarding issues of law which would
not limit the proof in this case or dispose of any disputed
issue.” (Id.). GEICO states that it had one “singular duty”
to Hayas with regard to the handling of the underlying claim,
which is at issue in this case: the duty of good faith. (Id.
at 3).
The

October

21, 2009,

“demand letter”

from

Attorney

Straughn to Mills, at GEICO, states in relevant part:
As you can imagine, my clients are very concerned
that there are not sufficient assets to cover this
profound loss. Consequently, my clients have asked
me to investigate and to determine whether there
are assets available and to what extent they are
available in order for them to decide whether they
can resolve this matter amicably with your
insured(s). In order to do my job, I must request
strict compliance with the following. Please
provide me with all of the information required by
F.S. § 627.4137 (a copy of which is attached for
your insured(s)). In addition, I need affidavits
from your insured(s) and his/their insurance agent
that there is no coverage other than the GEICO
coverage which is purported to be $100,000.00. To
the extent that all terms of this letter are
complied with, my clients will sign a release
releasing only your insured(s) in consideration of
your payment of all applicable policy limits. My
clients will sign a general release and will
satisfy all valid liens out of the proceeds of the
settlement. However, my clients cannot and will not
sign a release containing a hold harmless nor an
indemnity agreement. Nor will my clients accept a
release that purports to state your insured(s) are
denying liability or requesting confidentiality.
Further, my clients are only releasing your
insured(s) and no other person or entity as the
only claim they have is against your insured(s).

12

Therefore, any attempt to provide us with a release
from this point forward which contains a hold
harmless or indemnity agreement or purports to
release anyone or any entity other than your
insured(s), or denies liability or requests
confidentiality will act as a rejection of this
good faith offer. This offer is open to your
insured(s) for three (3) weeks from the date of
this letter. . . .
(Doc. # 83-1). GEICO argues that the “demand letter” was not
an offer or contract that could simply be accepted as no
release was provided and the terms and conditions of the offer
remained undefined. (Doc. # 83 at 7).
Furthermore, GEICO asserts that it complied with and
provided all of the materials requested to settle the claim.
(Id. at 11). GEICO’s agent, James Boley, sent correspondence
to Attorney Straughn on November 4, 2009, stating that “Not
all release forms fit the facts and circumstances of every
claim.”

(Id.

at

12).

Boley

further

requested

Attorney

Straughn to immediately call if he had any questions regarding
the release terms and invited suggested changes, additions or
deletions with the basis of such. (Id.). Ryan’s Estate did
not contact GEICO about changes nor did Ryan’s Estate provide
a release it found to be suitable. (Id.). Rather, “[I]nstead
of

working

with

[GEICO]

to

effectuate

the

settlement,

Straughn chose to send a crafted demand letter in which to
create a circumstance in which GEICO’s proactive tender and

13

proposed release could be construed as a ‘counter-offer.’”
(Id. at 15).
Hayas counters that despite GEICO’s attempts to argue
its own Motion for Summary Judgment here, “the bottom line is
that GEICO rejected the offer by tendering a non-conforming
release on October 22, 2009.” (Doc. # 90 at 2). Hayas contends
that “the October 21, 2009 [letter] specifically advised
GEICO that proposing a release containing a hold harmless or
indemnification provision would be deemed a rejection of the
offer; and GEICO specifically did just that the next day.”
(Id.).
The Court notes that Hayas’ Motion seeks a determination
from this Court that GEICO’s initial response to the original
time limited settlement offer was a rejection of and counteroffer to Hayas. (Doc. # 72). While this Court recognizes
Hayas’ arguments to be based in simple contract law, the issue
for determination here is whether GEICO acted in accordance
with its duty of good faith under the Florida standard of the
totality of the circumstances, not merely issues of contract.
See Berges, 896 So.2d at 680.
The crux of a bad faith claim is whether under all the
circumstances, the insurer failed to settle a claim when it
had a reasonable opportunity to do so. See Contreras v. United

14

States Sec. Ins. Co., 927 So. 2d 16, 20 (Fla. 4th DCA 2006).
Hayas has failed to present evidence entitling him to judgment
as a matter of law because this is a bad faith action and not
just a contract dispute as Hayas contends in his motion. For
the reasons stated above, Hayas’ Motion for Partial Summary
Judgment is denied.
B. GEICO’s Motion for Summary Judgment
GEICO

moves

for

summary

judgment

and

asserts

that

“because GEICO was, at all times, trying to settle the claim
within the applicable policy limits it is entitled to judgment
as a matter of law.” (Doc. # 68). “The undisputed material
facts establish that GEICO did not, at any point, put its own
interests above those of its insured.” (Id. at 2). Therefore,
GEICO contends that “no reasonable jury could conclude that
GEICO handled Plaintiff’s claims in bad faith.” (Doc. # 88).
GEICO’s conduct that Hayas avers constitutes bad faith
is the following: (1) GEICO could have accepted the terms of
Ryan’s counsel’s October 21, 2009, demand letter, (2) GEICO
initially included “hold harmless and indemnity” language in
its proposed release, and (3) GEICO failed to enter into a
Cunningham agreement. (Id. at 2).
As

an

initial

matter,

the

Court

addresses

Hayas’

contention that GEICO's failure to enter into a Cunningham

15

agreement constitutes bad faith. In Cunningham v. Standard
Guaranty Insurance Co., 630 So. 2d 179, 181 (Fla. 1994), “the
Florida

Supreme

Court

stated

that

under

ordinary

circumstances, a third party must obtain a judgment against
the insured in excess of the policy limits before prosecuting
a bad-faith claim against the insured's liability carrier.”
Perrien v. Nationwide Mut. Fire Ins. Co., No. 8:08-CV-2586T-30TGW, 2010 WL 2921621, at *4 (M.D. Fla. July 23, 2010);
see Blanchard v. State Farm Mut. Auto. Ins., 575 So. 2d 1289
(Fla.1991)(announcing analogous rule to that of a first-party
bad-faith claim). However, “[i]n Cunningham, the court held
that a trial court would have jurisdiction to decide the issue
of bad-faith handling of an insurance claim prior to the
determination of liability and damages in the underlying tort
claim where the parties so stipulated.” Id. In that case, the
parties had stipulated “to try the bad faith action before
trying the underlying negligence claim . . . and that if no
bad faith was found, the . . . claims would be settled for
the policy limit, and [the plaintiff] would not be exposed to
an excess judgment.” Id.
This

Court

finds

GEICO’s

failure

to

enter

into

a

Cunningham agreement that would have protected Hayas does not
constitute bad faith. See Berges, 896 So. 2d at 671 n. 1

16

(concluding that the insurance company's failure to accept a
Cunningham agreement did not constitute bad faith). Hayas
cites no authority for his proposition that GEICO's failure
to enter into a Cunningham agreement can be considered when
evaluating the totality of the circumstances for determining
whether GEICO acted in bad faith. Furthermore, as explained
more fully below, after considering the totality of the
circumstances, the Court finds that no reasonable jury could
conclude that GEICO acted in bad faith. Moore v. Geico Gen.
Ins. Co., No. 8:13-CV-1569-T-24AEP, 2014 WL 2938430, at *11
(M.D. Fla. June 30, 2014).
GEICO asserts that “the duty of good faith [] obligates
an

insurer

to

initiate

settlement

negotiations

‘where

liability is clear, and [the] injuries so serious that a
judgment in excess of the policy limits is likely. . . .”
(Doc. # 68 at 11)(quoting Powell, 584 So. 2d at 14. “However,
this obligation does not strip an insurer of its duty and
right to fully investigate claims.” Id.; see Johnson v. GEICO
Gen. Ins. Co., 318 F. App’x 827 (11th Cir. 2009)(“An insurer
acting with diligence and due regard for its insured is
allowed

a

reasonable

time

to

investigate

a

claim;

no

obligation exists to accept a settlement offer (or to tender

17

policy limits in advance of a settlement offer) without time
for investigation.”).
Furthermore, bad faith is more than mere negligence. See
Campbell v. Gov’t Emps. Ins. Co., 306 So. 2d 525, 530-31 (Fla.
1974).

“Unlike

ordinary

negligence,

‘the

essence

of

an

insurance bad faith claim is that the insurer acted in its
own best interests, failed to properly and promptly defend
the claim, and thereby exposed the insured to an excess
judgment.’” (Id.)(quoting Novoa v. Geico Indem. Co., No. 12–
80223–CV, 2013 WL 172913, at *4 (S.D. Fla. Jan. 16, 2013)).
GEICO reiterates that Florida law applies a totality of the
circumstances test when evaluating bad faith claims. (Id.).
Namely, GEICO argues that “there is no comprehensive list of
factors that courts must weigh when determining whether an
insurer acted in bad faith . . . it is well established that
the claimant’s unwillingness to settle the claim is relevant
to whether the insurer acted in bad faith under the totality
of the circumstances.” (Id. at 13); see Barry v. Geico Gen.
Ins. Co., 938 So. 2d 613 (Fla. 4th DCA 2006)(stating that the
conduct of the underlying claimant’s attorney is relevant to
an insurer’s defense that there was no realistic opportunity
to

settle,

and

that

introduction

appropriate).

18

of

such

evidence

was

GEICO argues that “a necessary component to settling the
claim was that the Estate and its attorneys were willing to
settle within the available policy limits. The undisputed
material facts demonstrate that they simply were not willing
to do so and, instead, were more interested in pursuing the
full value of the claim, culminating in the present bad faith
action.” (Doc. # 68 at 17). GEICO maintains that Ryan’s
Estate’s choice not to settle does not convert the $100,000.00
into unlimited coverage. (Id.).
In addition, GEICO contends that it was at all times
trying to settle the claim brought by Ryan’s Estate against
Hayas. (Id. at 18). “Without having received any demand from
the Estate’s counsel, GEICO proactively attempted to tender
the policy limits on October 21, 2009, just twenty three days
after it was notified of the loss, and only five days after
GEICO received the police report, which confirmed that Hayas
was liable for the accident.” (Id.).
Hayas

identifies

two

specific

instances

where

he

contends GEICO breached its duty of good faith. First, Hayas
contends

that

on

October

21,

2009,

Attorney

Straughn

presented a letter to settle all claims against Hayas. (Doc.
# 81 at 15). On October 22, 2009, GEICO delivered a check and
release

which

contained

a

hold

19

harmless

and

indemnity

agreement thereby rejecting the offer. (Id.). According to
Hayas,

“GEICO

thereafter,

cites

but

to

those

all

kinds

actions

of

could

actions
not

it

revive

took
the

opportunity that was lost when GEICO did exactly what the
claimant’s

counsel

specifically

required

it

not

to

do.”

(Id.). Second, GEICO was presented an opportunity to settle
by way of a letter dated July 6, 2010, from Mr. Swope, Hayas’
personal counsel, proposing a Cunningham agreement. (Id. at
16). Hayas states that “GEICO’s outright refusal to protect
[] Hayas by agreeing to [the terms] was not only bad faith,
but most clearly evidences how GEICO put its own interests
ahead of the interests of its insured.” (Id. at 17).
In its reply, GEICO states that “it is undisputed that
within the three week time period, GEICO complied with and
satisfied the terms [of the demand letter]. Specifically,
GEICO

tendered

the

$100,000.00

policy

limits,

provided

proposed releases, delivered a certified copy of the policy,
and provided affidavits from the insureds.” (Doc. # 88 at 2).
However, GEICO maintains that Ryan’s Estate was unwilling to
settle the claims against Hayas and therefore GEICO had no
reasonable opportunity to do so. (Doc. # 68). The record
evidence and undisputed material facts demonstrate that GEICO
made every attempt to settle the claim for policy limits and

20

no reasonable jury could conclude that GEICO acted solely in
its own interest in attempting to settle the claim.
The undisputed evidence shows that GEICO tendered the
policy limits and provided proposed releases quickly in an
effort to promptly settle the claim against Hayas in good
faith. The accident was reported to GEICO on September 29,
2009, by Bellao. (Doc. # 68 at 3). On October 8, 2009, GEICO
advised Bellao and Hayas of the possibility of exposure in
excess of policy limits. (Id.). Thereafter, on October 16,
2009, GEICO received the police report and made the decision
to tender the policy limits. (Id. at 4). Five days later, on
October 21, 2009, GEICO attempted to deliver the policy limits
check and proposed release to Attorney Straughn, but was
unable to do so because Attorney was Straughn was “out.”
(Id.).
GEICO then spoke to Attorney Straughn and advised that
GEICO wished to tender the policy limits and obtain a letter
of representation. (Id.). Attorney Straughn responded that he
was not in the office but would be in contact soon. (Id.).
That very afternoon, GEICO received the demand letter from
Attorney Straughn. (Id.). The next day, October 22, 2009,
GEICO delivered the check representing the policy limits and
a proposed release document to Attorney Straughn. (See Doc.

21

# 68-9). Shortly thereafter, on October 27, 2009, Attorney
Straughn sent a letter to GEICO stating that his client’s
offer was clear, unequivocal, non-negotiable and required
strict compliance. (Doc. # 68-12). The letter specifically
states that Attorney Straughn relayed GEICO’s “counteroffer”
to his clients and they respectfully reject it and are no
longer interested in negotiating with GEICO. (Id.). “Once
GEICO

was

notified

that

the

proposed

release

contained

objectionable language, it immediately acted to remove same
and provide [Ryan’s Estate] with another proposed release.”
(Doc. # 88 at 3).
GEICO

responded

to

Attorney

Straughn’s

letter

stating:
The proposed release that Ms. Mills left with your
office was not intended to serve as a counter offer
to your demand. In fact, we were trying to make
every effort to resolve your client’s demand even
before we received any correspondence from you. In
my fax to you dated October 22, 2009, I attached
our affidavit of coverage and advised you that a
copy of our policy would be following shortly.
Enclosed you will find a copy of our policy along
with our insured’s affidavits as you requested. In
addition, I have enclosed a release which does not
contain any hold harmless or indemnity language. I
have issued another check in the amount of
$100,000.00 to your office under separate cover.

22

by

(Doc. # 68-13). In addition, the cover letter enclosing the
above

mentioned

proposed

release

from

GEICO

to

Attorney

Straughn stated:
Not all release forms precisely fit the facts and
circumstances of every claim. Should you have any
questions about any aspect of the release terms,
please call me immediately. You may also send me
any suggested changes, additions or deletions with
a short explanation of the basis for any changes
you suggest; or if you have a release that you
desire to use, please forward it to me.
* * *
If you feel that there is any aspect of the enclosed
documents which does not reflect our settlement of
your claim(s), please contact me immediately so
that we can see that the document is revised to
reflect the exact terms of our agreement.
(Doc. # 68-15). It is apparent that had Ryan’s Estate wanted
to settle the claims against Hayas for policy limits, Attorney
Straughn could have contacted GEICO to address any alleged
the

deficiencies

problems.

Instead

in
of

an

effort

to

communicating

amicably
with

resolve

GEICO,

the

Attorney

Straughn rejected GEICO’s settlement attempt and Attorney
Lance Holden filed suit. (Doc. # 68 at 8).
GEICO has continually asserted that it did not have a
meaningful opportunity to settle the claims against Hayas
because Ryan’s Estate did not want to settle. (See Doc. ##

23

68, 88). To that end, the personal representative of Ryan’s
Estate testified to the following:
Q: Were you upset when you heard someone say that
Geico said your husband had drugs in his system at
the time of the accident?
A: Yes, that was an insult.
A: That was an insult to my husband and to my family
and it still bothers me today.
Q: It’s my understand – did anyone at Geico ever
specifically tell you that your husband had drugs
in his system?
A: No.
Q: And who told you about the statement that your
husband had drugs in his system?
A: I heard Richard Straughn mention it.
* * *
Q: And what did Mr. Straughn tell you in regard to
the alleged drug use?
A: That Geico had told State Farm that there had
been drugs in Bill’s system.
Q: And what was your reaction to being told that
your husband had drugs in his system at the time of
the crash?
A: I was mad.
Q: Did that affect your willingness to settle your
claim against Mr. Hayas for the $100,000.00 policy
limits?
A: I did not want to settle with Geico then, after
that.

24

* * *
Q: And as of October 27[], 2009, were you willing
to settle the claim with Mr. Hayas for the
$100,000[.00] policy limits?
A: No.
Q: And prior to the October 27[], 2009 letter being
sent out, what conversations did you have with your
attorneys about rejecting the $100,000[.00] policy
limit tender?
A: That I would not accept it, would not settle.
Q: Were you aware that Geico sent several letters
to your attorneys dated November 4[], 2009
enclosing certain documents?
A: Yes, but I made up my mind that I was not going
to settle.
* * *
Q: So at that point even if Geico provided every
single thing to you that was requested in the demand
letter, you had already determined that you weren’t
going to settle it for the policy limits ask – after
that October 27[th] date?
A: Yes, that’s correct.
Q: And it’s my understanding that the main reason
you were unwilling to settle was based upon the
allegations of drug use?
A: That’s right.
(Doc. # 108-1 at 24-26, 54-55).
While Hayas seeks to isolate GEICO’s conduct into two
distinct failures to settle the claim, it is the totality of
the circumstances and GEICO’s conduct as a whole that this

25

Court

must

consider.

It

is

clear

from

Ryan’s

Estate’s

testimony that settlement was not an option after October 27,
2009. GEICO maintained a willingness to settle the claims
against

Hayas

after

the

initial

demand;

however,

Ryan’s

Estate did not. As stated in Moore, “[t]his is a tragic case
for the underlying claimants. The underlying tortfeasor[]
[is] to blame for the inadequate insurance, not GEICO, and
the Court refuses to turn GEICO's limited insurance policy
into

an

available

deep

pocket

to

pay

the

bodily

injury

claims.” Moore, 2014 WL 2938430, at *14.
This

Court

finds

that

GEICO

responded

quickly

and

appropriately in investigating the claim against Hayas, kept
Hayas informed, and did everything within its control to
settle the claim. Therefore, the Court concludes that no
reasonable jury could conclude that GEICO acted in bad faith.
Thus, GEICO’s Motion for Summary Judgment is granted.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1)

GEICO General Insurance Company’s Motion for Summary
Judgment (Doc. # 68) is GRANTED.

(2)

Kenneth Hayas’ Motion for Partial Summary Judgment
(Doc. # 72) is DENIED.

26

(3)

The Clerk is directed to enter judgment in favor of
GEICO General Insurance Company and against Kenneth
E. Hayas.

(4)

After judgment is entered, the Clerk is thereafter
directed to close the case.

DONE and ORDERED in Chambers, in Tampa, Florida, this
5th day of December, 2014.

Copies: All Counsel of Record

27