Bad Faith Insurance: Duty to Settle?

Attorney John Mark Frazier Jr.

By: John M. Frazier Jr.

An insurance company is refusing to settle a claim that has clear liability and damages that exceed policy limits? Bad faith? Duty to settle? How does it all come together?

Insurance companies offer policies to the general public. Those that purchase those policies are called policy holders.

An insurance policy exists to shield the policy holder from judgments and damages resulting from the negligent actions of the policy holder. The insurance company acts as a fiduciary to the policy holder. In exchange, the policy holder must make continued payments in the form of premiums.

An insurance company has a duty to act in good faith to settle all claims within the policy limits when the policy holder’s liability is clear and the judgment would likely be in excess of the policy limits. A policy holder may be personally liable for a judgment that exceeds the policy limits. By failing to adequately protect the policy holder, the insurance company begins acting in bad faith. Bad faith claims are brought forward either as a first-party or third-party claimants. This is ultimately dependent upon the party relationship and type of coverage; BI or UM.

However, if an insurance company acts in bad faith while handling a claim, then the insurance company will be found liable for the excess judgment and damages. This constitutes a breach of the insurance company’s duty to settle a claim within policy limits. When liability is reasonably clear and there wasn’t a good faith attempt for a fair and reasonable settlement based upon the liability and damages; i.e., statutory bad faith, this breach opens the door for the insurance company to be on the hook for the excess judgments (judgments over the policy limits).

In order for this whole process to begin, a demand letter must first be sent out to the insurance company. The demand letter should generally include but not necessarily be to limited to the following; evidence of liability, medical expenses, doctor notes, surgery letters, post treatment costs, and any pain and suffering.

It is important that when drafting a demand letter to have an experienced personal injury attorney do the work.

Consequently, a demand letter will set the tone for the entire claim. The demand letter gives the insurance company an opportunity to fulfill their duty. This allows them to settle a claim and conduct their own investigation. The insurance company must be given the opportunity to tender the policy limits. If the value of the claim clearly exceeds the policy limits and the insurance company refuses to settle the claim then the door becomes open for bad faith.

If you need assistance with a personal injury claim, or any other type of legal matter, feel free to contact me. You can also follow me on Twitter, LinkedIn and Facebook for even more information.

Mediation – An Overview

Attorney John Mark Frazier Jr.

By: John M. Frazier Jr.

Mediation is the process of bringing two parties together to resolve a dispute or conflict. In law, mediation is used as a tool to help settle cases by bringing the two (or more) parties together. Mediation is conducted by a professional called a mediator. Often times, mediators are retired judges or retired lawyers, however, mediators come from all walks of life. A mediator must undergo training and certification prior to being allowed to mediate. Additionally, there are mediators that can only handle county claims and others that can handle circuit court or federal claims. The dividing line between county and circuit court is a sum in conflict of up to $ 15,000.00 or greater. F.S. 34.01(1)(c).

Mediation is a great tool if your attorney knows how to use it because it allows the attorney to negotiate with the other side. A wise man once told me, that if both parties leave neither completely happy or completely upset then a good deal was reached. The entire purpose is a compromise from both sides of the table to resolve a dispute or conflict prior to a case going into a jury trial.

Mediation can also be a wake-up call to personal injury clients who overvalue their case but it can also be a situation where an insurance company purposefully low balls to see if you will cut bait. It is important to have an attorney that has handled mediation before. This is because many personal injury cases will eventually resolve in this manner. It is important to remember that mediation and arbitration are two separate and distinct processes.

If you need assistance with a personal injury or insurance claim, feel free to contact me. You can also follow me on Twitter, LinkedIn and Facebook for even more information.


Discovery – Generally

Attorney John Mark Frazier Jr.

By: John M. Frazier Jr.

Discovery is the legal process of information gathering. This process is fundamental to developing or defending a lawsuit or criminal charge. This process will differ slightly in the framework of how it is conducted between a civil and criminal case. This is because criminal cases are governed under the Florida Rules of Criminal Procedure while civil cases are governed under the Florida Rules of Civil Procedure. There are many differences between the two but for the purposes of discovery the same overarching concept applies – fact finding.

Discovery is a mechanism for obtaining facts that may be relevant to your case. The concept of relevancy has a much wider application in the discovery context than in the context of admissible evidence at trial. This is true for both civil and criminal cases. In criminal cases, the State has the burden of proof and will do the vast majority of fact-finding as they obtain police reports/narratives, any videos or photos, physical evidence, or recorded statements before they make a decision to file a criminal charge but will have to disclose any discovery that they obtain and may use against a citizen accused at trial to the defense. However, an important aspect of defending a criminal case involves taking depositions of all the witnesses in a felony case to check on inconsistencies in testimony or determine the credibility and strength of a witness. The issue of disclosure of confidential informants can also arise. In Florida, you are not permitted to take depositions in misdemeanor cases. For DUI cases (which are misdemeanor unless upgraded to felony under certain circumstances), a formal review hearing can simultaneously work as a deposition of officers involved as it is taken under oath and recorded. Additionally, in certain criminal cases, it can be beneficial to obtain mental examinations during the discovery phase which can assist in the overall outcome of the criminal case.

Civil cases work a bit differently with a handful of overlap. Discovery can be obtained by a number of ways: depositions upon oral examination or written questions; written interrogatories; production of documents or things or permission to enter upon land or other property for inspection and other purposes; physical and mental examinations; and requests for admission as noted in Fla.R.Civ.P. 1.280(a). Parties may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter of the pending action, whether it relates to the claim or defense of the party seeking discStack of filesovery or the claim or defense of any other party, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. Fla.R.Civ.P. 1280(b)(1). It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence. Fla.R.Civ.P. 1280(b)(1).

The discovery process will differ between civil and criminal cases but the theme of discovery remains the exact same for both – fact-finding of information that may reasonably calculated to lead to the discovery of admissible evidence.

If you need assistance with a legal matter, feel free to contact me. You can also follow me on Twitter, LinkedIn and Facebook for even more information.