In a recently published opinion, the Eleventh Circuit revisited – and departed from – its prior, unpublished decision in Cawthorn v. Auto-Owners Insurance Co., 791 F. App’x 60 (11th Cir. 2019). The Court held that a final judgment that exceeds all available liability policy limits, whether such judgment results from a jury verdict or a consensual settlement, constitutes an “excess judgment” that can be used to satisfy the causation requirement of an insurer bad faith claim in Florida.
In McNamara v. Gov’t Employees Ins. Co., No. 20-13251 (11th Cir. 2021), Erika McNamara was driving Willard Warren’s vehicle when she caused an accident with another driver. Warren was insured under a GEICO policy that provided $100,000.00 in bodily injury coverage. GEICO and the injured party were unable to reach a settlement and Warren and McNamara were sued. During the course of the suit, Warren and McNamara were presented with two proposals for settlement under Fla. Stat. §768.79. The proposals required Warren and McNamara to consent to final judgments in the amount of the proposal and GEICO had to confirm it would not assert that Warren and McNamara had breached the policy by accepting the proposals. GEICO agreed and the proposals were accepted.
Warren and McNamara subsequently sued GEICO for bad faith, seeking to recover the amounts of the final judgments entered against them that exceeded the $100,000.00 policy limit. The District Court granted summary judgment to GEICO based on the ...
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