In a lengthy opinion, a federal District Court in Georgia dealt with several big issues in a third-party-bad-faith-failure-to-settle case, including several issues reminiscent of Florida cases. Indeed, the plaintiff's attorneys in the Georgia case were involved in some of the same issues in Florida cases.
For example, the Georgia federal court dealt with:
- the issue of settlement with a party who presents claims that would ordinarily belong to an estate, except that no estate has yet been established at the time, thereby raising purported issues of whether the insurance company could make a settlement offer to a party who does not have the legal authority to settle at that time (this court, like the Florida Supreme Court, held that an offer should be made anyway where the circumstances otherwise warrant an offer to protect the insured);
- the ramifications of an "equal consideration" test of bad faith, whereby a liability insurance carrier is held to account for settlement decisions that tend to prefer its own interests to the interests of its policyholder-insured (as a jury found and the court determined was so on the evidence presented in this case), and
- the ultimate issue treated the same way in Florida and Georgia bad faith law, that ultimately bad faith by a liability insurance company is a jury question, i.e., a question of fact for the trier of fact. Camacho v. Nationwide Mut. Ins. Co., ___ F. Supp. 3d ___, 2016 WL 3059833 (N.D. Ga. May 25, 2016).
For my money, the most significant feature of this decision flew under the radar, so to speak. The federal court itself mentioned it in passing at the beginning of its long opinion:
Following the jury's verdict in the state court wrongful death suit, Park assigned his right to bring a claim for negligent and bad faith failure to settle against Nationwide to Plaintiffs Jesus Camacho and LaJean Nichols. Plaintiffs filed suit against Nationwide in this court on September 14, 2011, alleging that Nationwide acted negligently and in bad faith in failing to accept their demand for settlement of all claims against its insured within the policy limits and exposing Park to a $5.83 million excess jury verdict. This case was tried before a jury from August 31, 2015 to September 8, 2015. On September 8, 2015, the jury returned a verdict in favor of Plaintiffs finding that Nationwide “acted negligently or in bad faith in failing to settle the claims made by the Plaintiffs against Nationwide's insured, Seung Park.” (Doc. 168.) The Parties had agreed that the jury would determine liability only and the Court would determine the amount of the verdict as a matter of law, including attorney's fees.
Camacho v. Nationwide Mut. Ins. Co., ___ F. Supp. 3d ___, 2016 WL 3059833, at *1 (N.D. Ga. May 25, 2016). [Emphasis added.]
The emphasized language illustrates the federal court's complete acceptance of what in Florida is called a "Cunningham agreement," by which the issue of a liability carrier's bad faith in settlement or not, is tried first by a jury, and either the agreement itself sets the compensatory damages award or a court later determines the issue of damages including attorney's fees.
Now apparently Cunningham agreements are prospering in Georgia, too, whether they were used there before or not.
Please Read The Disclaimer. ©2016 by Dennis J. Wall, author of Litigation and Prevention of Insurer Bad Faith (3d ed. Thomson Reuters West in 2 Volumes, with Supplements). You are invited to visit the author's website here. All rights reserved.