ONE FOR THE FIRST OF DECEMBER.
In Ellison v. Willoughby, 326 So. 3d 214 (Fla. 2d DCA 2021), one Willoughby asserted claims for Uninsured Motorist coverage and for bad faith against his UM carrier. Mr. Willoughby settled all his claims for a single undivided amount. In other words, Willoughby's settlement with his UM carrier did not state how much would go to coverage and how much was paid on account of the alleged bad faith.
Florida's Second District Court of Appeal held that under these circumstances, and perhaps in any case involving settlements of bad faith claims, not a penny of Mr. Willoughby's settlement was a "collateral source" under Florida law here:
Moving on to whatever portion of the settlement is allocable to Mr. Willoughby's claim for bad faith damages, the above-cited cases (upon which the trial court relied to deny setoff) involved settlements for UM benefits within the applicable policy limits. We have uncovered no case law addressing the question of whether extracontractual damages paid to a first-party claimant on a UM bad faith claim are subject to setoff. By statutory definition, “collateral sources” means “payments made to the claimant ... pursuant to ... automobile accident insurance that provides health benefits or income disability coverage; and any other similar insurance benefits.” § 768.76(2)(a) 2 (emphasis added). An extracontractual payment on a bad faith claim does not appear to meet this definition because it is not a payment of “benefits.”
Ellison v. Willoughby, 326 So. 3d at text following Headnote 10 (page numbers not available from Westlaw at the time of this blog article).
The appellate court had previously affirmed the trial court's holding that UM coverage payments were not "collateral sources" under Florida law, either.
The appellate court certified its decision on the UM settlement of "Mr. Willoughby's claim for bad faith damages" to the Supreme Court of Florida as a question of great public importance, in the following words:
IS A SETTLEMENT PAYMENT MADE BY AN UNINSURED MOTORIST INSURER TO SETTLE A FIRST-PARTY BAD FAITH CLAIM SUBJECT TO SETOFF UNDER SECTION 768.041(2) OR A COLLATERAL SOURCE WITHIN THE MEANING OF SECTION 768.76?
Ellison v. Willoughby, 326 So. 3d at text following Conclusion.
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