Sometimes there are possible Bad Faith issues where there is no Bad Faith litigation. The story of young Eric Brody presents such a case; there is no Bad Faith litigation, at least not yet. There may never be and if not, it would not be because of a decision on the merits. It would be because the Florida Legislature decides in favor of not deciding, ever, so that Mr. Brody would give up on pursuing any Bad Faith claim, ever. See Lucy Morgan, "When Government is at Fault But Doesn't Pay Up" (Tampa Bay Times Online, posted January 6, 2012).
Fourteen years ago, when he was 18, Mr. Brody was involved in an intersectional collision. He was on his way home from work. His car was demolished by a Sheriff's cruiser driven by a Deputy who reportedly was late getting to work. Mr. Brody was and is in a wheelchair. His parents care for him because he is "partially paralyzed" and "brain-injured". Id.
Mr. Brody was incapacitated, and proved it. He sued the Broward County Sheriff's Office. In 2005, he won a verdict of some $30,600,000.00 in damages. The award specifically included "$11 million for his future care." Id.
To date, Eric Brody has reportedly not collected a penny on the Jury's verdict and the Court Judgment that was entered confirming it. Lobbyists in record numbers have traveled to the Florida Legislature to argue whether he should or not.
The Broward County Sheriff's Office apparently raised the Affirmative Defense of Sovereign Immunity, although it used Taxpayer Money to pay the Premiums for a $3,000,000.00 Liability Insurance Policy. In order to collect more than the $200,000.00 statutory waiver of Sovereign Immunity in Florida, Mr. Brody has had to pursue a claims bill in the Florida Legislature so that more funds than that can be appropriated in order to pay part or all of the amount awarded to him by the Jury because of what the Jury decided was caused by the Deputy.
The hold-up has been whether Brody will be allowed to pursue a Bad Faith Claim against the Sheriff's Liability Insurance Company. Allegedly, during Mr. Brody's underlying lawsuit, the Sheriff's Liability Carrier could have settled the case for the $3 million Policy Limits. Id.
"Fairmont Specialty Insurance Co., the company that took over for a now-defunct insurer, now has offered the Brodys $8.5 million to settle all claims." Id. Eric Brody and his parents would still have to successfully lobby the Florida Legislature to pass a claims bill to appropriate that amount. However, there would be no Bad Faith Claim here, ever, because the Brodys would give that up. See id.
Lobbyists, lawyers, and the Legislature are lining up on both sides. Mr. Brody's lawyers and lobbyists are countered by the many lobbyists and lawyers on the other side, most if not all of whom are highly rated professionals it appears.
For its part, Fairmont Specialty Insurance Company has been given a stable rating, not outstanding, but stable, according to the insurance industry. It is a member of the well-known TIG Insurance Group.
Lobbying and the Florida Legislature to one side for the moment -- as if they could ever really escape our full attention even for a moment (shh, don't tell them, their feelings would be hurt to hear that they had escaped from the center ring) -- there are some very interesting Bad Faith issues in this situation. They include:
- Can a Liability Insurance Company defend against a Bad Faith Claim on the ground that its Insured could never be liable above a certain amount, here above the amount of $200,000.00, when liability above that amount depends on more than the amount of a Jury Verdict or a Court's Judgment?
- Would such a Company have a valid defense that it acted in Good Faith and dealt fairly by not offering any part of its Policy Limits above that threshold, here up to $3 million in Policy Limits, because even if the Injured Claimant recovered a Verdict and Judgment above the threshold, the Claimant would still have to successfully lobby for a claims bill appropriation, as here?
- If the answer to the second question is "yes," is a Bad Faith claim or cause of action available if the claims bill appropriation is within the Policy Limits -- and ordinarily there cannot be a Bad Faith claim or cause of action if the Injured Claimant's recovery is less than Policy Limits?
The answers to such questions may not be readily apparent.
Separate from the answers to these questions, there is another question here: Is the Insured's Affirmative Defense of Sovereign Immunity always and everywhere a good defense, too, to a Bad Faith Claim? In other words, can a Liability Insurance Company in such a situation take into account in refusing to offer Policy Limits to settle an underlying claim, that the Insured will not be exposed to 'personally' paying that part of the underlying claim which is in excess of the waiver of Sovereign Immunity?
There do not appear to be any cases yet on point, as we lawyers say, which directly address this last question. However, in the absence of a reported judicial decision by a Court of competent jurisdiction, the answer given by decisions on similar issues appears to be clear. "The cases are in conflict concerning whether insolvency of the insured is a good defense to an action for bad faith, but the overwhelming majority view is that it is not." Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith § 3:18, "Taking account of personal characteristics of the insured: Permitted or required" (Third Edition 2011 West Publishing Co.).
Similarly: "An insured's good financial status is also important to the liability insurer. The modern view is to impose a duty of good faith and fair dealing in settlement, even in response to demands made for sums over the policy limits, whenever the insured has an excess policy or may otherwise be financially able to contribute toward an excess sum." Id. [Emphasis added.] In the case of a claims bill in, for example, the Florida Legislature, the Insured which asserted the Affirmative Defense of Sovereign Immunity "may otherwise be financially able to contribute toward an excess sum" as soon as the claims bill is passed. That possibility is every bit as real as the rule fashioned by the Courts that allows for Bad Faith Claims to be litigated based upon a possibility that the Insured's Excess Carrier will pay on its Excess Liability Policy, and every bit as real as the sovereign-immunized Insured being financially able -- if not politically expedient -- to seek higher Taxes to contribute toward an excess sum.
Whether and when if ever Eric Brody and his family are compensated for the tragic accident that happened 14 years ago, remain to be seen. Whether and when the fear of facing a Bad Faith claim will prevent that compensation being appropriated in the Florida Legislature, will also be seen.
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