Hayas v. Geico General Insurance Company

Filing 12

ORDER denying 7 motion to dismiss. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 8/21/2013. (KAK)

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 to Dismiss or Motion
for More Definite Statement (Doc. # 7), which was filed on
July 23, 2013.

Plaintiff Kenneth Hayas filed a Response in

Opposition to the Motion to Dismiss on August 6, 2013. (Doc.
# 11).

For the reasons that follow, the Court denies the

Motion.
I.

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

insured by GEICO on September 28, 2009. (Doc. # 5 at ¶¶ 5-6).
On that date, while the insurance policy was in full force and
effect, Hayas negligently operated the automobile and was
involved in an accident with William Ryan. (Id. at ¶¶ 6, 8).
As a result of the accident, Ryan sustained serious injuries
and died as a result of those injuries. (Id. at ¶ 6).

At the

time of the accident, Hayas’s GEICO insurance policy provided

bodily injury limits of $100,000.00 per person and $300,000.00
per occurrence. (Id. at ¶ 7).
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).
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. Among other allegations, Hayas alleges that
GEICO breached its “duties of good faith in the handling of
the claims made against [Hayas] by acting in bad faith” by:
(1) failing to act fairly and honestly and with due regard for
Hayas’s

interests;

negotiations

after

(2)

failing

learning

that

to

initiate

Hayas

was

settlement
exposed

to

liability for damages in excess of his policy limits; (3)
failing to conduct settlement negotiations in good faith; (4)
failing to settle the underlying claims when GEICO could have
done so and should have done so; (5) failing to exercise
reasonable

diligence;

(6)

negligently

adjusting,

investigating, and defending the claims; (7) failing to adopt
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and implement standards for proper claims investigation and
handling; (8) failing to properly train its adjustors and
claims

personnel;

honestly;

failing

failing

(10)

(9)

to

to

communicate

advise

Hayas

of

with

Hayas

settlement

opportunities, the likelihood of a recovery in excess of
policy limits, and the steps that might be taken to avoid the
same; (11) failing to provide Hayas competent assistance; (12)
failing to take all reasonably possible steps necessary to
settle the claims against Hayas that a reasonable person would
have taken; (13) putting GEICO’s own interests ahead of
Hayas’s interests; (14) failing to follow the laws, statutes,
governmental

and

industry

standards

and

regulations

and

GEICO’s own policies that apply to the handling of liability
claims by insurance companies; (15) failing to accept an
agreement

that

would

have

prevented

entry

of

an

excess

judgment against Hayas; (16) failing to identify potential
claimants and take action to settle the claims; (17) failing
to accept an express, written offer to settle the claims
against Hayas for an amount available within policy limits;
and (18) failing to timely advise Hayas of the likelihood of
an excess verdict against him and the steps Hayas could take
the avoid the same or lessen its financial impact upon him.
(Doc. # 5 at ¶ 19).
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On July 23, 2013, GEICO filed its Motion to Dismiss or
Motion for More Definite Statement (Doc. # 7), which is ripe
for the Court’s review.
II.

Legal Standard
On a motion to dismiss, this Court accepts as true all

the allegations in the complaint and construes them in the
light most favorable to the plaintiff.

Jackson v. Bellsouth

Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004).

Further,

this Court favors the plaintiff with all reasonable inferences
from the allegations in the complaint.

Stephens v. Dep’t of

Health & Human Servs., 901 F.2d 1571, 1573 (11th Cir. 1990)
(“On a motion to dismiss, the facts stated in [the] complaint
and all reasonable inferences therefrom are taken as true.”).
However, the Supreme Court explains that:
While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide
the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action
will not do. Factual allegations must be enough to
raise a right to relief above the speculative
level.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(internal
citations omitted).

In addition, courts are not “bound to

accept as true a legal conclusion couched as a factual
allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986).
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Furthermore, “Threadbare recitals of the elements of a cause
of action, supported by mere conclusory statements, do not
suffice.”

Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

III. Analysis
Upon due consideration of the well-pleaded allegations of
Hayas’s Amended Complaint, which the Court must accept as true
at this juncture, the Court determines that it is appropriate
to deny GEICO’s Motion.

In the Court’s view, the Amended

Complaint is more than sufficient to raise a right to relief
above the speculative level and to state a plausible claim for
bad faith claims handling.
As explained in Jaimes v. GEICO General Insurance Co.,
No. 12-14427, 2013 U.S. App. LEXIS 16898 (11th Cir. Aug. 15,
2013):
In Florida, the question of whether an insurer
acted in bad faith in handling claims against the
insured is determined under a totality of the
circumstances standard. The inquiry focuses on the
actions
of
the
insured
in
fulfilling
its
obligations to the insured.
The insurer’s good
faith requirement 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. Thus, an insurance company acts in bad
faith in failing to settle a claim against its
insured within its policy limits when, under all of
the circumstances, it could and should have done
so, had it acted fairly and honestly towards its
insured and with due regard to his interests.
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Furthermore, bad faith may be inferred from a delay
in settlement negotiations which is willful and
without reasonable cause.
Id. at *15 (citations omitted).
The allegations of Hayas’s Amended Complaint, taken as
true for the purpose of addressing the Rule 12(b)(6) Motion to
Dismiss, amply state a claim for bad faith claims handling as
articulated by the Eleventh Circuit in Jaimes. Hayas asserts,
among other allegations, that GEICO failed to advise Hayas of
settlement

opportunities,

failed

to

advise

Hayas

of

the

probable outcome of litigation and to warn Hayas of the
possibility of an excess judgment, and also failed to advise
Hayas of the steps that he might take to avoid such judgment.
In addition, Hayas alleges that GEICO failed to settle the
claim against him within policy limits and failed to act
fairly and honestly.

These allegations are the hallmark of

bad faith.
The Court rejects GEICO’s assertion that dismissal is
warranted because Hayas has not identified a specific offer to
settle that GEICO neglected to accept. Rule 8 is satisfied by
the factual allegations presented.
constitutes

bad

faith

is

whether

“The gravamen of what
under

all

of

the

circumstances an insurer failed to settle a claim against an
insured when it had a reasonable opportunity to do so.”
6

Contreras v. U.S. Sec. Ins. Co., 927 So. 2d 16, 20 (Fla. 4th
DCA 2006).

Although Hayas’s Amended Complaint does not

provide detailed information about a particular offer to
settle, the Court does not find that the Amended Complaint is
a threadbare recital of the required elements.
Furthermore, the Court declines to require Hayas to file
a more definite statement of his claim pursuant to Rule 12(e).
GEICO has not convinced the Court that the Amended Complaint
is “so vague or ambiguous that [GEICO] cannot reasonably
prepare a response.” Fed. R. Civ. P. 12(e).
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
GEICO General Insurance Company’s Motion to Dismiss or
Motion for More Definite Statement

(Doc. # 7) is DENIED.

DONE and ORDERED in Chambers, in Tampa, Florida, this
21st day of August, 2013.

Copies: All Counsel of Record

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