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Florida Supreme Court Holds an Insurer is Bound by the Determination of Liability and the “Full Extent of Damages” in a UM Trial, and the Trial Court may Reserve Jurisdiction to Allow Plaintiff to Amend to Add a Claim for Bad Faith

Holding.  An insured seeking uninsured motorist benefits is entitled to a determination of liability and the full extent of the insured’s damages in the UM action before filing a first-party bad faith action.  (Emphasis Supplied.) The determination of damages is then binding, as an element of damages, in a subsequent first-party bad faith action against the same insurer so long as the parties have the right to appeal any properly preserved errors in the verdict. The Trial Court may retain retaining jurisdiction to determine the insured right to add a claim for Bad Faith.

Facts.   Safeco Insured, Adrian Fridman, suffered injuries as a result of an automobile accident with an underinsured motorist. Fridman filed a claim with Safeco Insurance, his insurer, for the $50,000 limits of his UM policy.  Safeco refused to pay, and Fridman filed a Civil Remedy Notice pursuant to Fla. Stat. § 624.155(1)(b) alleging that Safeco failed to attempt to settle his UM Claim in good faith in violation of the statute.  Fridman filed a UM Complaint against Safeco seeking to determine liability under the UM policy and the “full extent of the damages” suffered by the insured alleging that Fridman was “entitled to recover damages from the Defendant, Safeco Insurance Company of Illinois, in accordance with the provisions of § 627.727.”

Trial was originally set in March 2011, over four years after the automobile accident, and Safeco tendered a check for $50,000.00 representing the policy limits.  Fridman rejected the tender. Safeco then filed a “confession of judgment” and a separate motion for entry of confession of judgment. Fridman opposed the entry of a confessed judgment, arguing, among other things, that a jury verdict would determine the upper limits of Safeco’s potential liability under a future bad faith claim.  The Trial Court denied Safeco’s motion, and ordered trial.  The case proceeded to trial, and the jury found that the underinsured driver involved in the accident was negligent and one hundred percent responsible for Fridman’s damages, which the jury determined to be $1,000,000.00.

The trial court denied the post-trial motions and entered a final judgment, which included the following language:

  1. That the Plaintiff, ADRIAN FRIDMAN, recovers from Defendant, SAFECO INSURANCE COMPANY OF ILLINOIS, the sum of $50,000.00, that shall bear interest, pursuant to Florida Statute § 55.03 for which let execution issue, notwithstanding the excess jury verdict rendered in this matter.
  2. The Court reserves jurisdiction to determine the Plaintiff’s right to Amend his Complaint to seek and litigate bad faith damages from the Defendant as a result of such jury verdict in excess of policy limits. If the Plaintiff should ultimately prevail in his action for bad faith damages against Defendant, then the Plaintiff will be entitled to a judgment, in accordance with the jury’s verdict, for his damages in the amount of $980,072.91 plus interest, fees and costs.
  3. The Court hereby also reserves jurisdiction to consider any applicable attorney’s fees and costs incurred in the Plaintiff’s prosecution of this action for the purpose of entering a supplemental judgment in favor of the Plaintiff upon proper motion.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
  • Fifth District Holding & Rationale

The Fifth District vacate the jury’s verdict and directed the trial court to enter an amended final judgment deleting any reference to the jury verdict and declining to reserve jurisdiction to consider a request to amend the complaint to add a claim for bad faith under § 624.155.  The Fifth District reasoned that where no dispute exists as to the policy limits or available coverage, the amount of the judgment in the UM case may not exceed the policy limits.  The “only cause of action” before the trial court was Fridman’s UM claim because “Fridman had appropriately not included a bad faith count in his complaint.”


  • Supreme Court Rational

The Court recognized and discussed the interrelationship between a UM Verdict and a First Party Bad Faith Action.  The Court noted that nothing in precedent suggested that the eventual tendering of the policy rendered the UM case moot.  An excess judgment was a condition precedent whether in a first party or third party context. The Court found that the insured was entitled to a jury determination of the amount of damages in the UM action or otherwise, the Bad Faith Action would be dismissed at the trial court level.

The high Court noted the parallel between a plaintiff who must be allowed to proceed to trial and liquidate damage before bad faith becomes an issue because a trial court cannot compel a plaintiff to accept a tender in a third party context. In first party context, the tender of the policy limits to the insured does not eliminate the UM action or the insurer’s exposure to an excess verdict. (Bad faith would nonetheless need to demonstrated.)

The Court delineated that an insured may fix damages by settlement, stipulation, and/or trial.  None of these avenues, however,  limits or displaces the insured’s entitlement to a determination of liability and damages. Citing to Judge Sawaya’s dissent in the Fourth DCA opinion, the Court observed that  “….utilizing the UM and bad faith statutes as a charade whereby insurers are allowed, through the expedient of a fictional confession of judgment made years into the litigation, to push and pull their insureds from one lawsuit to another only to require the insureds to try the same damage issues all over again” would “def[y] all logic and common sense, contravene[ ] the fundamental principles underlying the UM and bad faith statutes….”  Thus, whether the insured or insurer, there is no “second bite at the apple.”

The Court addressed that a UM trial provided an opportunity for both parties to obtain appellate review of any errors that will need to be preserved.  The UM verdict is always subject to review.  The Court also adroitly pointed out that Safeco’s motion for a new trial demonstrated that insurer understood the ability to secure appellate reviewing by seeking it from the Fourth DCA notwithstanding its efforts to

Lastly, the procedure employed by the Trial Court retaining jurisdiction to determine the insured right to add a claim was found “appropriate” and “consistent” with precedent.  The Supreme Court quashed the Fifth DCA and remanded.

Editor’s Note

The Court remanded to the DCA to address whether the trial court erred in denying Safeco’s motion for remittitur, and whether the trial court erred in denying Safeco’s motions for mistrial and new trial.  These holdings will not address or alter the underlying holdings by the Supreme Court as to the determination of damages.  Also, the opinion was mute on whether the underlying PFS was triggered or not. 



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