In Moultrop v. GEICO General Insurance Co., ___ So. 3d ___, Nos. 4D19-225 & 4D19-1580, 2020 WL 5372296 (Fla. 4th DCA Sept. 9, 2020) (STATED NOT FINAL), a UM insurance carrier introduced evidence of settlement negotiations in a bad faith trial. As the saying goes, "It seemed like a good idea at the time." The carrier got a bad faith judgment in its favor in the trial court.
The results on appeal, however, were not a good idea at least for the carrier. The judgment in the carrier's favor was reversed because the carrier introduced the settlement evidence in the bad faith trial. The evidence was contained in the carrier's action log in its claim file and included demands and offers made at mediation. Although the carrier argued that this wasn't really evidence of settlement negotiations or of privileged mediation communications, the appellate court did not buy the argument.
The case was remanded for a new trial because of the same thing, namely, the carrier introduced evidence of settlement negotiations in the case in which it obtained a judgment in its favor. That judgment is gone now.
There are three reasons that the appellate court ruled the way it did. First, the settlement evidence was irrelevant to the focus of a bad faith trial, the appellate court ruled:
It is well established that “the 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.” [Citations omitted.] The introduction of the plaintiffs’ offer had nothing to do with whether the UM carrier acted in bad faith when it failed to tender its policy limits until June 2, more than three months after the CRN expired.
The UM carrier’s introduction of the plaintiffs’ settlement offer was solely to demonstrate that the plaintiffs, not the UM carrier, acted in bad faith. Because the activity log note was irrelevant, the court erred in admitting it into evidence. § 90.401, Fla. Stat. (2019).
Moultrop v. GEICO General Ins. Co., 2020 WL 5372296, at *4.
The second reason that the judgment in favor of GEICO General was reversed on appeal is that when the insurance company introduced evidence of settlement negotiations in the trial court, it did something prohibited by Florida evidence rules embodied in a Florida Statute, Section 90.408: It introduced evidence of settlement negotiations. Moultrop v. GEICO General Ins. Co., 2020 WL 5372296, at *5.
Third and finally, the appellate court reversed the judgment and remanded for a new bad faith trial because the settlement evidence was also prohibited evidence of privileged communications made at a mediation, in violation of Sections 44.403 and 44.405 of the Florida Statutes. Moultrop v. GEICO General Ins. Co., 2020 WL 5372296, at *5-*6.
Under the circumstances, the judgment of no bad faith did not last very long in this bad faith case.
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