In GEICO Casualty Co. v. Barber, 2014 WL 3966053 (Fla. 5th DCA August 15, 2014), a majority of a Florida District Court of Appeal panel granted certiorari and quashed a trial court's order. The lower court "Order on Plaintiff's Motion to Amend Pleadings and Defendant's Motion for Entry of Final Judgment" was entered "after [a U.M. carrier] confessed to judgment". That was the only reason that the two judges joining in this view voted to grant certiorari.
Certiorari is granted when lower courts act without jurisdiction. In the view of the two-judge majority, the trial court in this case "lacked jurisdiction to take any action other than to enter judgment in the amount of the UM policy limits in favor of Barber [the person claiming Uninsured/Underinsured Motorist benefits under the GEICO insurance policy]."
Parenthetically, under Florida law, a confession of judgment by an insurance company authorizes Florida courts to exercise jurisdiction over a motion for attorney's fees. It is just not accurate that an insurance company's confession of judgment automatically divests a Florida court of jurisdiction. To the contrary.
Further, as the dissenting judge on the panel observed, judicial action is required after a confession of judgment by any party. A party acting on its own cannot divest a court of jurisdiction to act. Here, for example, according to the dissenting appellate judge, the trial court had to have entered an order granting the confession of judgment first, before it ever attempted to enter other orders in the case in order for those other orders to be invalid for lack of jurisdiction. However, that is not what happened here.
The trial court entered the orders on all motions -- to amend and to enter judgment -- at the same hearing, at the same time in the same order.
Nonetheless, GEICO has precedent in favor of its position. In one earlier case, the same District Court of Appeal held that a confession of judgment by a U.M. carrier "mooted" all issues between them because the trial court could not provide any "substantive relief" once it entered judgment in the amount of the U.M. policy limits against the U.M. carrier.
The full Fifth District Court of Appeal, other District Courts of Appeal and the Supreme Court of Florida have all yet to be heard from on this issue. If a U.M. carrier can confess to judgment in a U.M. case and thereby foreclose any determination of damages in the U.M. case, then there may be questions concerning the U.M. insured's rights to pursue other claims against the confessional U.M. carrier.
The same questions would result if a verdict in the U.M. coverage case determining the damages caused by a U.M. tortfeasor were treated as having no legal effect after an entry of judgment for U.M. policy limits. This argument is also being advanced in Florida U.M. cases. See FLORIDA BAD FAITH ACTION AFTER U.M. VERDICT: DISCOVERY, DAMAGES, DUE.
One result is certain already. The team of lawyers who defend the U.M. carrier in a U.M. case is ordinarily not the same team of lawyers who defend the U.M. carrier in a bad faith case. Compare GEICO Casualty Co. v. Barber, 2014 WL 3966053 (Fla. 5th DCA August 15, 2014), with a U.M. bad faith case posted yesterday on Insurance Claims and Bad Faith Law Blog, Donna Batchelor v. GEICO Casualty Co., 2014 WL 3906312 (M.D. Fla. June 9, 2014).
In the Barber appeal, the majority pointed out at the end of their opinion that foreclosing a determination of damages in the U.M. contract coverage case did not preclude Mr. Barber from "litigating the damages issue on his bad-faith claim".
Presumably so. However, the damages in question in a U.M. coverage action are the damages caused by the uninsured motorist.
The damages at issue in a U.M. bad faith action are the damages caused by the Uninsured Motorist insurance carrier.
In Florida, recoverable damages in a statutory U.M. bad faith case can include the entire amount of damages in a verdict beyond the U.M. policy limits. In the Donna Batchelor case, for example, a jury found that GEICO's insured sustained damages "of approximately $1.8 million" caused by the uninsured motorist tortfeasor. As the dissenting judge in the Barber appeal pointed out, however, in Florida the law presumes that the damages caused by an uninsured motorist tortfeasor are already determined by the time a U.M. bad faith lawsuit is filed.
These are issues which concern the determination of damages necessary to pursue first-party bad faith claims in many jurisdictions besides Florida. Time, the Courts, and the Legislatures will tell us their answers.
© 2014 by Dennis J. Wall. All rights reserved. No claim to original U.S. Government works.
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