Levesque et al v. Government Employees Insurance Company
Filing
28
OPINION AND ORDER denying 13 Motion to Dismiss; denying 13 Motion to Stay; denying 26 Motion to Continue; denying 26 Motion to Stay. Signed by Judge Kenneth A. Marra on 10/20/2015. (ir)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 15-14005-CIV-MARRA
DEIRDRE LEVESQUE and TIMOTHY
LEVESQUE,
Plaintiffs,
vs.
GOVERNMENT EMPLOYEES INSURANCE
COMPANY,
Defendant,
___________________________________/
OPINION AND ORDER DENYING GEICO’S MOTION TO DISMISS OR IN THE
ALTERNATIVE MOTION TO STAY AND GEICO’S MOTION TO CONTINUE TRIAL
AND STAY REMAINING PRETRIAL DEADLINES
This matter is before the Court on Defendant Government Employees Insurance Company’s
(“GEICO”) Motion to Dismiss or in the Alternative Motion to Stay (DE 13) and GEICO’s Motion
to Continue Trial and Stay Remaining Pretrial Deadlines (DE 26). For the following reasons, the
Court denies both motions.
I. Background and Procedural History
On August 2, 2011, Plaintiff Deirdre Levesque was involved in an automobile accident with
an uninsured motorist, leaving Levesque with significant injuries. (DE 1-2 ¶¶ 4–6, 8.) Defendant
GEICO insured Levesque under a policy that provided $100,000 in uninsured motorist (“UM”)
coverage. (DE 1-2 ¶¶ 9, 11.) Because GEICO allegedly failed to tender its applicable UM coverage
limits within 60 days of being served with a Civil Remedy Notice of Insurer Violation, Levesque and
her husband, Plaintiff Timothy Levesque, sued GEICO in a state court proceeding for damages under
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the policy (the “coverage action”). (DE 1-2 ¶¶ 12–16.) A trial was scheduled in the coverage action,
which would have determined the full extent of Plaintiffs’ damages caused by the uninsured
motorist’s alleged negligence. Before the scheduled trial, GEICO moved the court for entry of a final
judgment. (DE1-2 ¶ 40.)
In its motion, GEICO argued that because it “admitted that Plaintiffs are entitled to judgment
in the amount of the UM policy limits, there is no further justiciable controversy between the parties
and final judgment must be entered.” (DE 17-1 at 4.)1 In support of its motion for entry of a
judgment, and in order to assuage any concerns the court might have about prejudicing a future claim
for such damages, GEICO assured the court that under Florida law such a result “would in no way
impede [an insured] from pursuing a bad faith claim against [a UM insurer], as a confessed judgment
in the UM action would provide a sufficient basis for [an insured] to sue [its UM insurer] for bad
faith.” (DE 17-1 at 7.) GEICO explained that “the finder of fact in the subsequent lawsuit for bad
faith” would be “entitled to determine the amount of the damages in that action.” (DE 17-1 at 8.)
Based on GEICO’s motion, the court entered a final judgment against GEICO in the amount of the
$100,000 policy limits. (DE 1-2 ¶¶ 40–41.) Thus, GEICO deprived Plaintiffs of the ability to have
the amount of damages they sustained in excess of the policy limits determined in the coverage
action.
After obtaining the final judgment against GEICO in the coverage action, Plaintiffs filed this
1
When deciding a motion to dismiss for failure to state a claim, a court may consider judicially
noticed matters without converting the motion to one for summary judgment. See Lozman v. City
of Riviera Beach, Fla., 713 F.3d 1066, 1075 n.9 (11th Cir. 2013); see also Tellabs, Inc. v. Makor
Issues & Rights, Ltd., 551 U.S. 308, 322,(2007). A court may take judicial notice of orders and other
documents filed in another court, but not of the truth of the matters asserted therein. See United
States v. Jones, 29 F.3d 1549, 1553 (11th Cir. 1994). Accordingly, the Court takes judicial notice
of GEICO’s arguments in its motion for entry of final judgment in the state-court coverage action.
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statutory “bad faith” action against GEICO under section 624.155, Florida statutes. (DE 1-2.) Among
other damages, Plaintiffs seek the total amount of damages sustained as a result of the August 2,
2011 car accident, including any amount in excess of the policy limits. (DE 1-2 at 17–18.) Plaintiffs
assert that the full value of their claims “greatly exceeded” the $100,000 policy limits. (DE 1-2 ¶ 11.)
In response, GEICO filed the present motion to dismiss or in the alternative to stay. (DE 13.)
GEICO’s motion to dismiss argues that Plaintiffs’ section 624.155 action cannot be
maintained because, according to GEICO, as a condition precedent to such an action “Plaintiffs are
required to establish the total amount of damages in the underlying suit for UM benefits.” (DE 13
at 2.) Though GEICO moves to dismiss “without prejudice,” it is clear that GEICO seeks a result that
would forever bar Plaintiffs from prosecuting their section 624.155 claim. GEICO succeeded in
arguing that Plaintiffs could not obtain a determination of their total damages in the coverage action
because “no further justiciable controversy” existed once GEICO admitted it was liable for the policy
limits, and that instead Plaintiffs had to prove their damages in a subsequent section 624.155 action.
Now that the coverage case is closed, GEICO argues that Plaintiffs cannot bring their section
624.155 claim because they should have obtained a determination of their damages in the prior
coverage action. As explained below, GEICO contention must be rejected.
II. Legal Standard
Rule 8(a) of the Federal Rules of Civil Procedure requires “a short and plain statement of the
claim” that will give the defendant fair notice of what the plaintiff’s claim is and the ground on
which it rests. Fed. R. Civ. P. 8(a). The Supreme Court has held that “[w]hile 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
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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, 545 (2007) (internal citation and alteration omitted).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citation omitted). “A claim has facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id. Thus, “only a complaint that states a plausible claim for relief survives a motion to
dismiss.” Id. at 679. The Court must accept all of the plaintiff’s factual allegations as true in
determining whether a plaintiff has stated a claim for which relief could be granted. Hishon v. King
& Spalding, 467 U.S. 69, 73 (1984).
III. Discussion
A. GEICO’s Motion to Dismiss
Florida’s civil remedy statute provides a cause of action, often referred to as a “bad faith”
action, for any person who is damaged by an insurer’s violation of certain enumerated duties. Fla.
Stat. § 624.155 (2015). In turn, Florida’s UM statute, which governs UM claims against insurers,
provides that in a section 624.155 action against a UM insurer a plaintiff may recover her full
amount of damages, including those caused by the uninsured motorist rather than the insurer, and
even in excess of the policy limits:
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
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an insurer or by a third-party tortfeasor.
Fla. Stat. § 627.727(10) (2015) (emphasis added).
Under Florida law, an injured insured may pursue a coverage claim against her UM carrier
without having to first resolve the tort claim against the uninsured motorist. Neff v. Prop. & Cas. Ins.
Co. of Hartford, 133 So. 3d 530, 532 (Fla. Dist. Ct. App. 2013). As part of proving coverage, the
insured must prove the liability of the uninsured tortfeasor. In such a case, the UM carrier “stands
in the shoes” of the uninsured motorist. Diaz-Hernandez v. State Farm Fire & Cas. Co., 19 So. 3d
996, 999 (Fla. Dist. Ct. App. 2009). Thus, at trial in a UM coverage action, if the jury returns a
verdict for the plaintiff, it is for the full amount of the plaintiff’s damages arising from the car
accident. If the verdict is in excess of the policy limits, then the trial court must grant the UM
insurer’s motion to limit the judgment to the policy limits because the only claim is for coverage
under the policy. Nationwide Mut. Fire Ins. Co. v. Voigt, 971 So. 2d 239, 242 (Fla. Dist. Ct. App.
2008).
A section 624.155 action against an insurer for its bad fath failure to settle a claim cannot
proceed simultaneously with a coverage action. That is so because an insurer cannot be found liable
for such bad faith conduct unless it is first established that the insured was entitled to benefits under
the UM policy. See Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So. 2d 1289, 1291 (Fla. 1991).
A UM insurer cannot be faulted for failing to settle a claim where the uninsured motorist is not liable
to the insured for damages arising from the car accident. Id. Therefore, a section 624.155 action for
bad faith failure to settle a UM claim does not accrue until there has been “a determination of the
existence of liability on the part of the uninsured tortfeasor and the extent of the plaintiff’s damages.”
Id.
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Though a plaintiff asserting a section 624.155 claim must plead that she has obtained a
determination of the extent of her damages, the plaintiff is not required to allege a specific amount
of damages. Imhof v. Nationwide Mut. Ins. Co., 643 So. 2d 617, 617–18 (Fla. 1994), receded from
in part on other grounds, State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So. 2d 55, 63 (Fla. 1995).
There is also “no need to allege an award exceeding the policy limits to bring an action for insurer
bad faith.” Id. at 618. This is because “it is the establishment of the fact that such damages were
incurred and not their precise amount which forms the basis for a subsequent first party cause of
action for bad faith.” Clough v. Gov’t Emps. Ins. Co., 636 So. 2d 127, 130 (Fla. Dist. Ct. App. 1994),
disapproved of in part on other grounds, Laforet, 658 So. 2d at 62.
Accordingly, it is well established that a plaintiff may bring a section 624.155 action against
a UM insurer without obtaining a precise determination of damages in the prior coverage action, and
the amount of damages may be determined in the section 624.155 action. Brookins v. Goodson, 640
So. 2d 110, 113–15 (Fla. Dist. Ct. App. 1994), disapproved of in part on other grounds, Laforet, 658
So. 2d at 62;2 Clough, 636 So. 2d at 130. Obtaining a verdict on the plaintiff’s total damages in the
underlying coverage action is only one of several methods of establishing the “extent of the
plaintiff’s damages” prerequisite.
Brookins controls this case. In Brookins, as here, the UM insurer tendered its policy limits
before trial in the underlying coverage action, thus ending the coverage litigation. See 640 So. 2d at
112. In the subsequent section 624.155 failure-to-settle action, the trial court dismissed the case
because the underlying coverage case was settled without a trial establishing the extent of the
2
In Laforet, the Florida Supreme Court disapproved of Brookins only “to the extent [it] can be read
as approving the retroactive application of section 627.727(10).” 658 So. 2d at 62. Brookins
otherwise remains good law.
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insured’s damages. Id. at 111. The Fourth District Court of Appeal, in a decision authored by nowJustice Pariente of the Florida Supreme Court, reversed and held that “the resolution of the
underlying underinsured motorist claim by payment of the policy limits does not preclude the insured
from pursuing a first party bad faith claim against his insurer.” Id.
The court explained that the purpose of the Blanchard requirements is to ensure that the
insured has a valid claim against the insurer. Id. at 112. The amount of damages does not determine
whether the insured has a section 624.155 claim, and the extent of damages need not be determined
by litigation. Id. Thus, the UM insurer’s payment of the policy limits “is the functional equivalent
of an allegation that there has been a determination of the insured’s damages” because it satisfies the
requirement that the insured has a valid claim. Id. Thus, all that is required as a prerequisite for a
section 624.155 failure-to-settle claim is that there was “a resolution of some kind in favor of the
insured” on the coverage issue. Id. at 113. “By settling for the policy limits, the insurer has in effect
conceded that the insured had a valid claim and the insured’s damages have a minimum value set
at the amount of the policy limits.” Id. at 114. Such a settlement “resolves the underlying litigation
for contractual uninsured motorist insurance benefits,” but it “does not foreclose the bad faith claim.”
Id.
The Florida Supreme later extensively quoted Brookins with approval in Vest v. Travelers
Insurance Co., 753 So. 2d 1270, 1273 (Fla. 2000). “While the ultimate holding in Vest is not relevant
for purposes of the instant motion, the fact that the Court reaffirmed the Fourth District’s decision
in Brookins suggests that payment of an insurance claim satisfies the prerequisite for a bad faith
suit.” Plante v. USF&G Specialty Ins. Co., No. 03-23157CIV, 2004 WL 741382, at *4 (S.D. Fla.
Mar. 2, 2004).
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In Vest, the Florida Supreme Court also emphasized that the reason for the Blanchard
requirements is that a section 624.155 failure-to-settle claim “is founded upon the obligation of the
insurer to pay when all conditions under the policy would require an insurer exercising good faith
and fair dealing towards its insured to pay.” Id. at 1275. Thus, the Blanchard prerequisites are
properly read as a condition that the plaintiff establish entitlement to benefits under the policy before
asserting a section 624.155 claim. This is evidenced by the Vest court’s clarification of the
Blanchard prerequisites in terms of liability for damages under the policy rather than the full amount
of the plaintiff’s damages caused by the uninsured tortfeasor. See id. at 1276 (“We continue to hold
in accord with Blanchard that bringing a cause of action in court for violation of section
624.155(1)(b)1 is premature until there is a determination of liability and extent of damages owed
on the first-party insurance contract.” (emphasis added)).3
In this case, Plaintiffs have pled that GEICO tendered its policy limits. (DE 1-2 ¶¶ 16,
40–41.) Under Brookins, this suffices as meeting the elements of a determination of the existence
of liability and the extent of the plaintiff’s damages. This also strictly satisfies the Blanchard
elements as stated in Vest. GEICO has admitted that it is liable for the full amount of “damages owed
on the first-party insurance contract.” Vest, 753 So. 2d at 1276. Plaintiffs need allege nothing more
to satisfy Blanchard. Having sufficiently pled a section 624.155 claim, Plaintiffs may prove the full
3
Vest did not change the Blanchard requirements. Blanchard itself must have referred to only
damages recoverable under the policy because, at the time Blanchard was decided, insured’s were
not entitled to damages caused by the uninsured motorist in excess of the policy limits. See McLeod
v. Cont’l Ins. Co., 591 So. 2d 621, 625–26 (Fla. 1992). It was only after Blanchard and McLeod that,
in direct response to McLeod, the Florida Legislature enacted section 627.727(10) to allow for
recovery of excess judgments in section 624.155 actions in the UM context. See Laforet, 685 So. 2d.
at 60–61 (describing development of section 627.727(10)). As such damages could not have been
contemplated in Blanchard, it would be improper to read Blanchard as requiring that the damages
in excess of UM policy limits be determined as a condition precedent to a section 624.155 claim.
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amount of their damages in this case, including those exceeding the policy limits.
GEICO contends that when it moved for entry of judgment in the coverage action it never
intended to “mislead or prejudice Plaintiffs.” Rather, GEICO asserts the law changed after the entry
of the judgment and its actions are “simply a reflection of the ever changing landscape of bad faith
jurisprudence in Florida.” (DE 20 at 2.) GEICO claims that in the coverage action it relied on Safeco
Insurance Co. of Illinois v. Fridman, 117 So. 3d 16, 20 (Fla. Dist. Ct. App. 2013), rev. granted, 145
So. 3d 823 (Fla. 2014), when it maintained that entry of judgment would not bar a subsequent
section 624.155 claim, but then two days after judgment the Fourth District Court of Appeal issued
GEICO General Insurance Co. v. Paton, 150 So. 3d 804 (Fla. Dist. Ct. App. 2014), which GEICO
claims changed the law. The Court rejects GEICO’s argument.
In Fridman, the Fifth District Court of Appeal held that an insurer’s tender of the policy
limits and confession of judgment in a UM coverage action renders the issues in the case moot, thus
prohibiting a court from allowing the case to proceed to trial on the full amount of the plaintiff’s
damages. 117 So. 3d at 18–20. In such a situation, Fridman holds, the trial court must enter the
confessed judgment in favor of the insured and reserve jurisdiction only to award costs, prejudgment
interest, and reasonable attorneys’ fees if authorized by law. Id. at 20. Citing Brookins, the court
explained that its holding did not create a procedure that would allow insurer’s to bar section
624.155 claims. Id. at 20–21. Because “an insured is not required to obtain a jury verdict in excess
of the applicable UM coverage as a condition precedent to bringing a first party bad faith action
against the insurer,” an insured “can seek the full measure of damages afforded by [section
627.727(10)] in a subsequent bad faith action.” Id. (citing Brookins, 640 So. 2d 110; Clough, 636
So. 2d 127).
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Paton addresses an entirely separate issue that is irrelevant to this case. In Paton, the Fourth
District Court of Appeal held that a verdict in excess of the policy limits obtained in a UM coverage
trial is conclusive evidence of the plaintiff’s damages in a subsequent section 624.155 action. 150
So. 3d at 806. Paton does not state that such an excess verdict is the only way to satisfy the
Blanchard prerequisites. It merely holds that a plaintiff is not required to prove her damages twice,
once in the UM coverage action and again in the section 624.155 action. Id. at 807 (“Forcing retrial
of a plaintiff’s damages at a first party bad faith trial, as Geico urges, is such bad policy that we do
not glean even a hint of its existence in any case the Supreme Court has decided in this area.”). Paton
simply has no applicability where no trial was held in the UM coverage action because the insurer
confessed judgment prior to trial.
GEICO incorrectly reads Paton as conflicting with Fridman and holding that an insured must
always prove the full amount of damages caused by the uninsured motorist in the underlying
coverage action. But Paton is about the effect of a prior excess verdict once obtained, not whether
such a verdict is required as an element of every section 624.155 action. Just because such a verdict,
if obtained, is conclusive as to damages in the subsequent section 624.155 action, it does not follow
that the absence of such a verdict bars the section 624.155 action. Obtaining a verdict on damages
in the UM coverage action is sufficient to satisfy Blanchard, but it is not necessary where the “extent
of damages” prerequisite is otherwise satisfied. See, e.g., Brookins, 640 So. 2d at 112.
For the Paton court to have held otherwise, it would have had to overrule Brookins, another
Fourth District Court of Appeal decision (which it could not do unless sitting en banc). Paton does
not even mention Brookins. In fact, two weeks before Paton, the Fourth District Court of Appeal
issued a unanimous, en banc decision relying heavily on Brookins and noting the Florida Supreme
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Court’s approval of that decision in Vest. See Cammarata v. State Farm Florida Ins. Co., 152 So.
3d 606, 611–12 (Fla. Dist. Ct. App. 2014) (en banc) (per curiam). The Paton court was bound by
Brookins and Cammarata. And regardless, it is doubtful that the judges who joined the Cammarata
opinion, which relied on Brookins, would two weeks later issue a decision overruling Brookins
without even mentioning it. Also, though the Paton court was not bound by the decision of a sister
court of appeal, it is noteworthy that Paton does not mention Fridman either (which also relies on
Brookins).
In sum, Fridman and Paton do not conflict. Fridman addresses the situation where a UM
insurer tenders its limits in the coverage action prior to trial. Paton addresses the situation where,
unlike here, a UM insurer does not tender its limits and instead proceeds to trial in the coverage
action. Because there was no trial in the underlying coverage action in this case, Paton is inapposite
here. Brookins is controlling. A section 624.155 claim ripens in satisfaction of Blanchard where, as
here, the insurer tendered its limits in the prior coverage action.
B. GEICO’s Motion to Stay Pending Result in Fridman
In the alternative, GEICO moves to stay this action until the Florida Supreme Court issues
a decision in Fridman, which it accepted jurisdiction to review. 145 So. 3d 823. While in Fridman
the Florida Supreme Court may indeed discuss the elements of a section 624.155 failure-to-settle
claim, controlling precedent exists on the issue before this Court. See Brookins, 640 So. 2d at 112.
Where controlling circuit precedent exits on an issue before a district court, a grant of certiorari on
the same issue by the United States Supreme Court does not justify a stay because certiorari grants
do not change the law. Speer v. Whole Food Mkt. Grp., Inc., No. 8:14-CV-3035-T-26TBM, 2015
WL 2061665, at *1 (M.D. Fla. Apr. 29, 2015); Nicholas v. Nationwide Credit, Inc., No.
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09-60736-CIV, 2010 WL 503071, at *4 (S.D. Fla. Feb. 8, 2010). There is no reason why the same
principle does not apply in an analogous state-law context. Cf. Stanfill v. State, 384 So. 2d 141, 143
(Fla. 1980) (“The decisions of the district courts of appeal represent the law of Florida unless and
until they are overruled by this Court . . . .”).
Regardless, the outcome of Fridman will likely have no effect on this case. The issue in
Fridman is whether a plaintiff is entitled to proceed to trial in a coverage action after a defendant
UM carrier makes a pretrial confession of judgment. That issue is not before this Court.4
C. GEICO’s Motion to Continue Trial and Stay Pretrial Deadlines
GEICO recently filed an additional motion seeking a continuance of the trial and a stay of
remaining pretrial deadlines “pending the Court’s issuance of an Order on GEICO’s Motion to
Dismiss or Stay.” (DE 26 at 3.) As the Court has now ruled on GEICO’s motion to dismiss or stay,
GEICO’s motion to stay pretrial deadlines pending such a ruling is moot. Furthermore, GEICO has
not established good cause to continue the trial date. The Court appreciates, however, that certain
discovery issues depended on how the Court would rule on GEICO’s motion to dismiss. (See DE
23.) Therefore, while the Court denies the motion to stay pretrial deadlines and continue the trial
date, it is willing to entertain a future motion to extend certain pretrial deadlines.
4
Brookins also held that where, as here, an insurer agrees to pay the policy limits in the underlying
coverage action and allow the insured to pursue the section 624.155 claim, “this would amount to
an agreement or stipulation that the insurer waived the requirement that the extent of the insured’s
damages be determined by litigation as a prerequisite to a first party bad faith case.” 640 So. 2d at
115. Therefore, even if the Florida Supreme Court goes beyond the question presented in Fridman
and holds, contrary to Vest and Brookins, that an insured in a UM coverage action must obtain a
verdict fixing all the damages caused by the uninsured motorist as a condition precedent to a section
624.155 claim, the outcome of this case would not change. Instead, the additional holding in
Brookins as to waiver would control and lead to the same result.
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IV. Conclusion
Accordingly, it is hereby ORDERED AND ADJUDGED that GEICO’s Motion to Dismiss
or in the Alternative Motion to Stay (DE 13) is DENIED. It is further ORDERED AND
ADJUDGED that GEICO’s Motion to Continue Trial and Stay Remaining Pretrial Deadlines (DE
26) is DENIED as to the motion to continue trial and is DENIED AS MOOT as to the motion for
a stay of pretrial deadlines.
DONE AND ORDERED in chambers at West Palm Beach, Palm Beach County, Florida,
this 20th day of October, 2015.
____________________________________
KENNETH A. MARRA
United States District Judge
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