PERSONAL INJURY CORNER
Bad Faith Jury Instruction
TED BABBITT
A recent decision of the 11th Circuit applying Florida law makes it absolutely clear that in a bad faith insurance suit the jury must be instructed both on the issue of whether the insurer failed to settle a claim , but also whether the insurer failed to advise the insured about settlement offers and likely litigation outcomes .
Brink v . Direct Gen . Ins . Co ., WL 2310039 , USCA , No . 21-11070 ( 11th Cir . June 28 , 2022 ), was a suit brought to recover the full amount of a $ 12,000,000 verdict under the theory of bad faith against an insurer who had a $ 10,000 policy .
The facts made it clear that the insurer had made great efforts to contact the Plaintiff and his counsel in order to try to settle the case for the $ 10,000 limits . To say that Plaintiff ’ s counsel was not responsive is to be more than kind . The insurer did everything within its power to contact Plaintiff ’ s counsel to offer the policy limits and Plaintiff ’ s counsel simply did not return the calls or respond to the written requests , including a written offer that included a check for the full policy limits .
Not surprisingly , a jury found on behalf of the insurer on the issue of bad faith failure to settle . However , it was equally clear that the insurer failed to properly keep its insured in the loop and to advise its insured when Plaintiff ’ s counsel finally made an offer to accept the full amount of the policy limit in settlement provided that it was offered within a relatively short time period . When the time period elapsed the insurer woke up and again offered the policy limits , but was told that the offer came too late .
During the trial that resulted in a defense verdict , the Plaintiff ’ s attorney requested a jury instruction both on bad faith failure to settle and on bad faith failure to advise its insured about the settlement offer . The trial Judge denied the Plaintiff ’ s request for an extensive jury instruction , and instead , gave the standard jury instruction which addressed only liability for failure to settle and not for failure to advise its insured of the settlement offer . The instruction that was given stated “ bad faith on the part of the insurance company is failing to settle a claim when , under all the circumstances , it could and should have done so , had it acted fairly and honestly towards its insured and with due regard for their interests .” While the 11th Circuit found that that instruction correctly stated the law , it failed to include the law on an insurer ’ s duty to advise its insured of the settlement offer and the steps that could be taken to protect the insured .
On the other hand , Plaintiff offered the following instruction :
“ Juan Ruiz Pereles and Juan Ruiz De Los Santos were insured against the claim made by Dustin Brink arising from the April 5 , 2008 accident under a policy of insurance issued by Direct General Insurance Company .
Direct General ’ s insureds surrendered to Direct General control over the handling of the claim and settlement decisions . Direct General owed a fiduciary duty of good faith to act in its insureds ’ best interests and protect its insureds from judgments in excess of their policy limits . In handling the claim against its insureds , Direct General had a duty to use the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business .
* 3 The duty of good faith required Direct General to advise its insureds of settlement opportunities , to advise as to the probable outcome of the litigation , to warn of the possibility of an excess judgment , and to advise the insureds of any steps they might take to avoid an excess judgment . Direct General was further required to investigate the facts , give fair consideration to the settlement offer that was not unreasonable under the facts , and settle , if possible , where a reasonably prudent person , faced with the prospect of paying the total recovery , would do so . The focus in this bad faith case is not
on the actions of Dustin Brink or his attorneys , but rather on the actions of Direct General and its obligation to act in good faith toward its insureds . The critical inquiry is whether Direct General diligently , and with the same haste and precision as if it were in its insureds ’ shoes , worked on the insureds ’ behalf to avoid an excess judgment . The absence of good faith constitutes bad faith .”
The 11th Circuit found as a matter of law that Plaintiff ’ s requested instruction correctly stated applicable Florida law and that each statement of law in the proposed instruction was supported by binding Florida precedent .
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