November 2, 2023 was a good day for Florida policyholders.  The Florida Supreme Court ruled in favor of a passenger who was tragically injured in a car accident by refusing the at-fault insurer—GEICO's—attempt to claim an unfair offset.  As is common in many car accidents, multiple insurance companies had an obligation to pay for certain damages caused and they both failed to fulfill their obligation. 

• The injured passenger's uninsured/underinsured motorist (UM) carrier wrongfully refused to pay the meager $10,000 owed based on an inapplicable policy condition. This bad faith conduct resulted in the UM carrier eventually paying the passenger a $4 million dollar bad faith settlement. 

• When the injured passenger later obtained a $30 million dollar verdict against the owner of the at-fault vehicle, her insurance company, GEICO, tried to get an unfair break by claiming the UM settlement as a setoff from the amount the jury determined it owed to the passenger.

Thankfully, both the Florida Second District Court of Appeal (“2nd DCA”) and the Florida Supreme Court saw through this tactic and refused GEICO's improper request for a setoff.  GEICO was obligated to pay for the damages its insured caused and its refusal to do so resulted in a $30M verdict that GEICO was obligated to pay, with no setoffs.  We are proud of this policyholder's persistence and the Florida Supreme Court's faithful application of the law to the facts in rendering justice.

The Accident, Damages, and Bad Faith Settlement with the UM Carrier

The passenger, Randy Willoughby, was rendered comatose for a month and suffered a debilitating brain injury from which he has yet to fully recover when the vehicle in which he was riding as a passenger was t-boned by a vehicle co-owned by Alberta Ellison, insured by GEICO.  Willoughby's parents' UM carrier, 21st Century, was obligated to pay the $10,000 policy limit as a result of the accident.  However, 21st Century refused to pay claiming Willoughby did not meet the definition of a resident of his parents' home in order to be entitled to coverage.  Willoughby brought a bad faith actionas a result.  21st Century's argument later proved to be without sufficient merit and prompted the UM carrier's agreement to pay $4M in settlement of Willoughby's claims. 

GEICO's Failed Attempt to Claim the UM Settlement as a Setoff

Willoughby's fight for justice did not end there.  He also pursued the at-fault driver and co-owner of the vehicle that caused his injuries, who were insured by GEICO.  Recognizing the gravity of the damage the driver caused, GEICO agreed to settle Willoughby's claim against the driver for the policy limit of $100,000.  It refused, however, to settle Willoughby's claim against the co-owner of the at-fault vehicle, Alberta Ellison.  GEICO's refusal to settle resulted in a jury rendering a verdict against Ellison for $30M.  GEICO, however, fought its liability to pay this amount by filing a motion with the court, arguing it was entitled toa “setoff” for the $4M Willoughby had received from his UM carrier to avoid Willoughby getting a windfall. 

Florida's 2nd DCA analyzed GEICO's request for an offset under two statutes:

• Stat. § 768.041(2), which enables an injured party to release one at-fault party without releasing all jointly liable parties by allowing a setoff. The 2nd DCA refused the setoff under this statute because Willoughby's claims against his UM carrier were not the same claims he had against the at-fault vehicle owner.  Also, the UM settlement reflected amounts paid not merely to compensate for damages but also to avoid the risk of an unknown outcome or further exposure.

• Stat. § 768.76(2)(a), which allows an offset for any portion of damages recovered from a “collateral source,” like health insurance benefits that paid medical bills. The 2nd DCA declined the setoff under this statute because extra-contractual bad faith damages are not “benefits” that meet the definition of a “collateral source.” 

The 2nd DCA certified these two findings as questions of importance to the Florida Supreme Court.  On November 2, 2023–eleven years to the day from the date of Willoughby's accident—the Florida Supreme Court affirmed the 2nd DCA's determination that bad faith damages do not quality as “benefits” in order to be considered a “collateral source” for a setoff under Fla. Stat. § 768.76.  The Supreme Court declined, however, to comment on the 2nd DCA's determination that bad faith damages could not be offset under Fla. Stat. § 768.041(2), finding this argument was not properly raised on appeal. 

How This Ruling Could Impact You

At TWWH we always counsel clients to obtain as much UM coverage as they can afford because there are many drivers on our roads who are uninsured or underinsured.  If an uninsured or underinsured driver injures you in an accident, having your own UM coverage to cover you in a situation like this will help you to more fully recover for your injuries.  The Florida Supreme Court's ruling enables you to recover fully from both your own UM carrier as well as the carrier for the at-fault driver or vehicle owner and prevents the at-fault insurance company from getting an unfair break for bad faith damages you recover from your UM or another responsible insurer. 

If any of this sounds complicated and confusing, that's because it is.  Navigating the ins and outs of recovering in full from all insurance companies responsible to pay for your damages after a car accident can be incredibly complicated and requires skills and experience the lay driver typically does not possess.  This is why it is imperative—if you have been injured in a car accident—to retain an experienced insurance attorney to help you with both your insurance claim and, if necessary, the bad faith claim, to ensure you recover all the funds to which you are entitled.  At TWWH, we never require any fee, cost, or obligation to review your car accident or bad faith claim and make sure you understand your rights, whether you bring us on board to assist or not.  There is no downside to making a simple phone call that could make all the difference in how much you recover.  If you have questions, contact us.