Hines v. Geico Indemnity Company

Filing 139

ORDER denying 117 Motion for summary judgment. Motions in limine are due by January 19, 2016, and responses thereto are due by February 1, 2016. The parties are directed to file their joint pretrial statement by January 29, 2016. Signed by Judge Susan C Bucklew on 11/24/2015. (JD)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

JAMES P. HINES, as Personal
Representative of the Estate of Eva
Cordova-Rodriguez,
Plaintiff,
v.

Case No. 8:14-cv-1062-T-24 TGW

GEICO INDEMNITY COMPANY,
Defendant.
_________________________________/
ORDER
This cause comes before the Court on Defendant’s Motion for Summary Judgment.
(Doc. No. 117). Plaintiff opposes the motion. (Doc. No. S-133). As explained below, the
motion is denied.
I. Standard of Review
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). The Court must draw all inferences from the evidence in the light most favorable to the
non-movant and resolve all reasonable doubts in that party's favor. See Porter v. Ray, 461 F.3d
1315, 1320 (11th Cir. 2006)(citation omitted). 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. See id. (citation omitted). 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 there is a genuine issue for trial. See id. (citation omitted).
II. Background
This is a bad faith insurance case arising out of a car accident. On April 23, 2007, Eva
Cordova-Rodriguez (“Cordova”) was driving a car that was owned by her husband, Peter
Rodriguez (“Rodriguez”). Defendant GEICO Indemnity Company (“GEICO”) issued an
automobile liability policy to Cordova and Rodriguez that had bodily injury limits of $25,000
per person/$50,000 per occurrence, and which was in force at the time of the accident.
Cordova drove her car into a car being driven by Eunice Acosta (“Acosta”). Cordova
was arrested for driving under the influence at the scene. On April 25, 2007, Acosta’s attorney,
Dario Diaz, advised GEICO that he had been retained to represent Acosta.
On October 2, 2007, Diaz sent a demand letter to GEICO, in which he offered to settle
Acosta’s claim against Cordova and Rodriguez in exchange for the bodily injury policy limit of
$25,000. In the demand letter, Diaz stated the following:
Eunice Acosta sought relief for the pain from Dr. Brock Mathieson.
Complaints included low back pain, neck pain, and bilateral elbow
pain. Dr. Mathieson's initial assessment included cervical, thoracic
and lumbar sprain/strain; bilateral elbow contusion; and bilateral
shoulder sprain/strain. Dr. Mathieson placed Ms. Acosta on a
conservative therapy program and limited her activities.
While receiving medical attention Eunice Acosta's physicians ordered
diagnostic tests. The right elbow MRI revealed minimal medial
epicondylitis marrow edema in the medial epicondyle. The cervical
x-rays showed straightening of the cervical spine due to muscle
spasms. Copies of the diagnostic reports are included for your review.
Eunice Acosta completed treatment and on August 15, 2007, a final
report was authored by her treating physician. Dr. Mathieson
reaffirmed the previous impressions and acknowledged that Ms.
Acosta had reached maximum medical improvement. The final
report finds permanent residual injuries as a result of the accident of
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April 23, 2007. These permanent injuries were sustained by chronic
post traumatic cervical thoracic and lumbar sprain/strain; chronic post
traumatic bilateral elbow medial epicondylitis; and chronic post
traumatic sciatica.
As a result of receiving medical treatment for the injuries, Eunice
Acosta incurred substantial medical bills [totaling $13,478.78]. . . .
Future liability for treatment is yet to be determined. However, it is
safe to assume that additional visits will be required to control
exacerbations that will occur from time to time.
It is clear based on the information provided that Eunice Acosta has
sustained a serious injury as a result of your insured’s negligence in
this case. Thus our reasonable demand for the policy limits based on
our client’s life expectancy, and age of only 29 years at the time of
the accident, as well as everything else made reference to in this
letter, is reasonable and conservative.
This offer is made in good faith in the quest for a fair and amicable
settlement. It will remain open for a period of thirty (30) days . . . .
(Doc. No. 117-9). Diaz included Acosta’s medical records with the demand letter. While the
medical records described Acosta’s injuries as being “chronic post traumatic” injuries, the
records do not specifically describe Acosta’s injuries as being “permanent.” (Doc. No. 117-9).
On October 31, 2007, GEICO responded to the offer by stating the following:
Based on the documentation submitted, your client’s injuries appear
primarily soft tissue in nature. We are willing to offer $3500.00 to
resolve your client’s bodily injury claim.
(Doc. No. 117-12). The amount GEICO offered was based on the fact that Acosta’s PIP
coverage had already paid almost $10,000 towards her $13,478.78 in medical bills.1 Acosta did

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In determining the value of Acosta’s claim, Florida Statute § 627.737(2) provides that a
claimant can only recover damages for pain and suffering if one of four conditions are met. The
parties agree that the only applicable condition would be if Acosta had suffered a “permanent”
injury within a reasonable degree of medical probability. GEICO’s $3,500 counteroffer was
based on its conclusion that Acosta’s injuries were not permanent.
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not accept GEICO’s counteroffer.
Almost four months later, on February 22, 2008, Acosta (through her new attorney,
Robert Joyce) filed suit against Cordova and Rodriguez. In June of 2008, Cordova and
Rodriguez were served with the complaint.
In October of 2008, discovery was underway in the underlying car accident lawsuit. On
October 13, 2008, Acosta responded to Cordova and Rodriguez’s Interrogatories and Requests to
Produce and provided the following three relevant pieces of information. (Doc. No. 135-4, 1355). First, Acosta admitted to having two other car accidents in 2007—one on April 11, 2007 and
one on December 26, 2007. (Doc. No. 135-4). Acosta contended that she was not injured in
those other two car accidents.2 (Doc. No. 135-4).
Second, Acosta disclosed that she had seen another doctor on March 17, 2008—Dr.
Martinez. (Doc. No. 135-5). Acosta produced his medical records, in which he concluded that
she had “suffered a permanent injury” from the car accident with Cordova and that she had “an
overall 23% permanent impairment rating to the body as a whole.” (Doc. No. 135-5). Dr.
Martinez also opined that continued medical care costs would be approximately $3,000 per year
(which included doctor visits, medication, physical therapy, a TENS unit, epidural blocks, and
home therapy). (Doc. No. 135-5). Finally, he opined that Acosta might consider surgery for her
elbows, which would cost approximately $5,000 each. (Doc. No. 135-5).
Third, Acosta described how her life had been limited by her injuries from the car

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However, when Acosta was deposed in the underlying car accident case on January 19,
2009, it appears that she testified that in the December car accident, her car received a t-bone
impact and that she had bruising in her buttocks and left hip. (Doc. No. 135-7). Acosta’s entire
January 19, 2009 deposition was not filed with the Court.
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accident. Those limitations included that she was limited in giving her special needs daughter
therapy on her legs and feet and picking her up when needed. (Doc. No. 135-4).
On January 19, 2009, Acosta served proposals for settlement on Cordova and Rodriguez.
Specifically, she offered to settle her claim against Cordova for $50,000 and to settle her claim
against Rodriguez for $25,000. On February 9, 2009, Rodriguez countered with a settlement
offer of $3,500 to settle the claim against him only. Acosta accepted Rodriguez’s $3,500
counteroffer.
By March 24, 2009, Acosta had decided to undergo cervical spine surgery for her
injuries. In her March 31, 2015 deposition, Acosta states that she was willing to settle her bodily
injury claim against Cordova for the remaining bodily injury policy limit up until the time that
she decided to have surgery. (Doc. No. 125, p. 35-36, 53-54).
On March 24, 2009, Joyce helped Acosta to schedule the surgery for April 22, 2009.3
(Doc. No. 117-35). Thereafter, Joyce repeatedly told his staff not to let GEICO and Cordova
know about the surgery, and he commented that GEICO and Cordova were “in deep ‘stuff’
now.” (Doc. No. 117-37, Doc. No. 117-38, Doc. No. 117-40).
On July 14, 2009, Joyce finally revealed to GEICO and Cordova that Acosta had
undergone cervical spine surgery. (Doc. No. 117-41). On July 17, 2009, GEICO attempted to
tender the remaining $21,5004 bodily injury policy limit to Acosta to settle her claim against

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It is curious to this Court why Joyce stated in his March 31, 2015 deposition that he did
not recall Acosta telling him that she was going to have surgery prior to the surgery (Doc. No.
117-30), given that Joyce helped her to schedule the surgery.
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The insurance policy had a $25,000 bodily injury limit, and Acosta had already received
$3,500 under the policy to settle her claim against Rodriguez. Thus, the remaining available
bodily injury limit was $21,500.
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Cordova, but Acosta rejected the settlement attempt. The case went to trial, and on December 4,
2009, the jury awarded Acosta $539,850.00 in damages.
In May of 2010, Cordova died. Plaintiff James Hines, Jr. was appointed as Cordova’s
personal representative. On December 12, 2013, Hines filed this bad faith lawsuit against
GEICO, and GEICO removed the case to this Court on May 5, 2014. GEICO now moves for
summary judgment on the bad faith claim that Hines has asserted against it.
III. Law Regarding Bad Faith Claims Handling
In Berges v. Infinity Insurance Company, the Florida Supreme Court explained the
purpose of bad faith insurance law:
Bad faith law was designed to protect insureds who have paid their
premiums and who have fulfilled their contractual obligations by
cooperating fully with the insurer in the resolution of claims. The
insurance contract requires that the insured surrender to the insurance
company control over whether the claim is settled. In exchange for
this relinquishment of control over settlement and the conduct of the
litigation, the insurer obligates itself to act in good faith in the
investigation, handling, and settling of claims brought against the
insured. Indeed, this is what the insured expects when paying
premiums. Bad faith jurisprudence merely holds insurers accountable
for failing to fulfill their obligations . . . .
896 So. 2d 665, 682-83 (Fla. 2005).
Twenty-five years earlier, the Florida Supreme Court set forth the standard to be applied
in bad faith litigation:
An insurer, in handling the defense of claims against its insured, 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. 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. . . . The insurer
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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.
Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla. 1980)(internal citations
omitted). Thus, “[a]n insurer cannot escape liability for breach of the duty of good faith by
acting upon what it considers to be its interest alone.” Id. at 786.
In determining whether an insurer has acted in bad faith in handling a claim, the totality
of the circumstances standard is applied. See Berges, 896 So. 2d at 680 (citation omitted).
“[T]he focus in a bad faith case is not on the actions of the claimant but rather on those of the
insurer in fulfilling its obligations to the insured.” Id. at 677. The insurer owes a fiduciary duty
to act in the insured’s best interests. See id. (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, concluded as a matter of law that the insurance company did not act in bad faith.
See id. at 680 (citation omitted).
IV. Motion for Summary Judgment
GEICO moves for summary judgment on the bad faith claim asserted against it. The
evidence before the Court, viewed in the light most favorable to Hines, shows that Acosta was
willing to settle her claim against Cordova for the remaining bodily injury policy limit up until
the time that she decided to have surgery (and she had decided to have surgery by March 24,
2009).
Whether GEICO’s failure to accept Acosta’s October 2, 2007 offer to settle her claim for
the bodily injury limit equates to bad faith is a question for the jury to determine. The evidence
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before the Court is that Acosta’s medical records (which GEICO had at the time of the October
2007 offer) indicated that Acosta’s injuries were chronic. Acosta has provided the testimony of
Susan Kaufmann, a claims practices expert, who has opined that a reasonable claims adjuster
would have concluded that Acosta’s injuries were permanent based on the medical records
describing Acosta’s injuries as being chronic. (Doc. No. 128, p. 144-45). Furthermore, Acosta
argues that common sense dictates that a chronic condition would result in the need for future
medical care to treat any flare-ups that Acosta experienced.
However, even if the jury agrees with GEICO that there was not sufficient evidence in
October of 2007 for it to determine that Acosta’s injuries were permanent in nature and/or would
result in at least $25,000 of damages, there is still a jury question regarding whether GEICO
should have attempted to settle Acosta’s claim for the bodily injury limit prior to March 2009
based on the additional information GEICO received regarding Acosta’s injuries. For example,
in October of 2008, GEICO learned that Dr. Martinez had characterized Acosta’s injuries as
permanent, and he opined that medical care costs would be approximately $3,000 per year and
that surgery was a possibility. GEICO also knew that Cordova was driving under the influence
at the time of the accident and that Acosta’s injuries interfered with her ability to take care of her
special needs child.
On the other hand, the Court is cognizant that GEICO is not required to simply accept
Acosta’s doctor’s opinion and could conduct its own review of Acosta’s medical records and
medical opinions. Furthermore, GEICO also learned that Acosta had also been involved in two
other car accidents in 2007. Given all of this information, the jury will have to determine
whether a reasonably prudent person, faced with the prospect of paying the total recovery, would

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have paid the $25,000 policy limit (or the remaining $21,500 policy limit after Acosta accepted
Rodriguez’s offer to settle the claim against him for $3,500) to settle this claim prior to March
24, 2009.
Finally, while it appears that Acosta was willing to settle for the $25,000 policy limit in
October of 2007, the jury could find that GEICO did not act in bad faith in rejecting her
settlement offer at that time. Additionally, the jury could choose to disbelieve Acosta’s assertion
that she would have settled for the $25,000 policy limit after her October 2, 2007 settlement
offer was rejected, given Joyce’s behavior of purposefully withholding relevant information
about Acosta’s surgery from GEICO. Thus, the jury could find that there was no reasonable
opportunity to settle for the policy limit once GEICO had the information necessary to properly
evaluate Acosta’s claim.
Based on the above, fact issues remain for the jury to determine. For these reasons, the
Court denies GEICO’s motion for summary judgment.
V. Conclusion
Accordingly it is ORDERED AND ADJUDGED that:
(1)

Defendant’s Motion for Summary Judgment (Doc. No. 117) is DENIED.

(2)

The parties are directed to each file their motions in limine (in a single document
that does not exceed 25 pages) by January 19, 2016, and they are directed to file
their responses thereto by February 1, 2016.

(3)

The parties are directed to file their joint pretrial statement by January 29, 2016 .

DONE AND ORDERED at Tampa, Florida, this 24th day of November, 2015.

Copies to:
Counsel of Record
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