By: Ryan Hoyle, Esq.
The Fifth District Court of Appeal ruled that on the notice of a Confession of Judgment by an insurer in an uninsured/underinsured (“UM”) case, the trial court lacks jurisdiction to take any action other than to enter judgment in the amount of the UM policy limits. An action for bad faith is separate and distinct, and may be brought in a separate action.
In GEICO Casualty Co. v. Barber, ___ So. 3d. ____, 2014 WL 3966053, (Fla. 5th DCA, 2014), the Fifth DCA quashed the trial court’s order granting the insured, Barber, the right to amend his complaint for UM benefits to add a bad faith action and a declaratory action to determine liability and the total amount of damages he sustained in the subject accident. The Fifth DCA noted that at the time Barber moved to amend, GEICO had served a policy limits proposal for settlement, and when unaccepted, had filed a Notice of Confession of Judgment and Motion for Entry of Confessed Judgment for the policy limits.
Relying on its decision in Safeco Insurance Co. v. Fridman, 117 So. 3d. 16 (Fla. 5th DCA 2013), the Court ruled that when GEICO filed its Notice of Confession of Judgment, the issues between the parties as framed by the pleadings were moot. The Court distinguished between a claim for UM benefits and a claim for bad faith, noting that a claim for bad faith is a separate claim based on an insurer’s legal duty to act “in good faith,” independent of the insurer’s contractual obligations addressed in the UM claim. Thus, the Court ruled that Barber could proceed with litigating the damages issue in a bad-faith claim.
In a detailed dissenting opinion, Justice Sawaya distinguished the Court’s holding in Fridman, noting that in Fridman the court had not dealt with an attempt to amend for bad faith, as was present in the instant case. Moreover, Sawaya noted that Barber served GEICO with two separate Civil Remedy Notices under Section 624.155(3)(a), Florida Statutes, prior to filing suit, and that after filing suit, GEICO waited four (4) years before Noticing its Confession of Judgment. Given Barber’s fact pattern, Sawaya opined it was factually similar to the First DCA’s ruling in Safeco Insurance Co. of Illinois v. Rader, 132 So. 3d 941 (Fla. 1st DCA 2014), where the court held that a trial court maintains jurisdiction to hear a claim for bad faith even after an insurer tenders the policy limit. More importantly, Sawaya opined that the majority’s ruling was at odds with longstanding Florida law, pointing to the holding in State Farm Mut. Auto Ins. Co. v. Laforet, 658 So.2d 55 (Fla. 1995), in which Florida Supreme Court held that under Section 627.727(10), Florida Statutes, the damages recoverable from an uninsured motorist insurance carrier in a bad faith action brought under Section 624.155 shall include the total amount of a claimant’s damages, including any amount in excess of the claimant’s policy limits awarded in the underlying claim.
—————————————————- In its discussion of Fridman, the Court highlighted that a Confession of Judgment in a UM claim does not preclude the trial court from maintaining jurisdiction to award costs and attorney’s fees, where applicable. Citing to Westgate Miami Beach; LTD. v. Newport Operating Corp., 55 So. 3d 567.575 (Fla. 2010).  Sawaya also highlighted the fact that the trial court had not actually entered or even heard GEICO’s Motion for Confession of Judgment prior to Barber’s filing of his Motion to Amend.