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Geico Insurance Loses Bad Faith Suit

The Eleventh Circuit Court of Appeals recently rejected Geico’s pursuit of a new trial or judgement, upholding a Florida jury’s 2016 verdict that found the insurance company acted in bad faith in its handling of a 2010 auto accident.

Geico argued the Florida jury had based its decision around insufficient evidence. However, Judges Gerald Tjoflat, Charles Wilson, and Kevin Newsom stated the plaintiff’s injuries following the accident likely exceeded Geico’s $250,000 policy limit, yet the insurance company refused to tender its limits until a lawsuit was filed. “Here, the evidence presented was more than enough for a jury to find that Geico acted in bad faith,” the circuit judges confirmed.

The Case

On October 27, 2010, Margaret Randall was severely injured during a car accident with Melissa Servold in Key West, and airlifted to a hospital in Miami with a brain injury. Servold was insured under a Geico policy issued to her mother with limits of $250,000 per person and $500,000 per incident.

After the accident, Geico was quickly notified and a field adjuster was sent to the hospital the following week although Randall was still in the intensive care unit. Soon after, Randall and her husband filed a claim against Geico, as the medical and ambulance bills alone exceeded the $250,000 policy limit. However, Geico refused to tender their limits – in other words, they refused to pay a claim outside their limit, so the Randalls sued Servold and her mother.

The case remained in litigation over the next several years, during which the Randalls made several settlement offers to Servold and Geico. These offers were all rejected, so, in 2015, Randall and her husband proceeded to sue Geico in a Florida District Court, asserting that Geico’s defiance had forced them to “spend tens of thousands of dollars and incur almost five years of delay in pursuing a claim that should have been settled promptly after the crash occurred or at numerous opportunities during the progression of the underlying lawsuit.”

The Verdict

The case first went to trial in 2016, and was heard by Judge Kathleen Williams. Geico argued that among other evidence, the plaintiff’s expert testimony stating the insurance company owed Randall a “duty of good faith” should not be allowed to stand in court. However, Judge Williams allowed all the evidence and testimony to remain, which led the jury to believe Geico had breached Florida law and acted in bad faith by refusing to negotiate multiple settlement offers.

When Geico later filed a motion for a new trial, the appeals panel upheld both Judge Williams’ and the Florida jury’s decision, stating all the evidence supported the fact that Geico knew Randall was in a coma and their insured, Servold, was entirely at fault. Furthermore, the circuit court declared that, under the severe circumstances of the accident, Geico should have raised their policy limit shortly after and settled Randall’s claim. “A reasonable jury could have concluded that by Nov. 5 [2010] the cost of the medical expenses and non-economic damages merited a tender of the $250,000 policy limits.”

The appellate panel’s ruling denying Geico a new trial leaves the insurance company responsible for the previous $2.9 million judgement.

How an Insurance Attorney Can Help You

Situations like Randall’s, where injuries were suffered through no fault of the injured, provide many reasons to consult an experienced insurance attorney. As Geico demonstrated in this case, insurance companies do not always pay claims readily, especially when they exceed the insured’s policy limit. Instead, they may attempt to take advantage of the injured party, or conduct settlement negotiations in what’s known as ‘bad faith.’

A knowledgeable, aggressive personal injury attorney familiar with insurance company strategies can help in these situations, especially when a case goes to trial. When tragedy strikes, the last thing an injured party needs is to deal with a dishonest, difficult insurance company. An insurance attorney can help ensure the case is handled fairly so the amount rightfully deserved is obtained.

Dunnion Law Holds Insurance Companies Accountable

If you’ve been subjected to bad faith tactics, such as delayed responses or intimidation, by an insurance company, trust the dedicated insurance attorneys of Dunnion Law to help handle your case. We have been holding insurance companies accountable for more than 40 years, and are dedicated to defending your rights against big insurance corporations. Call our office today at (831) 373-8035 so we can help take the burden off your shoulders.