USCA11 Case: 22-10243 Date Filed: 08/17/2022 Page: 1 of 10
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-10243
Non-Argument Calendar
____________________
DANIEL VOSS,
an individual,
Plaintiff-Appellant,
versus
STATE FARM MUTUAL AUTOMOBILE INSURANCE
COMPANY,
Defendant-Appellee.
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2 Opinion of the Court 22-10243
____________________
Appeal from the United States District Court
for the Northern District of Alabama
D.C. Docket No. 1:17-cv-01465-SGC
____________________
Before WILSON, NEWSOM, and ANDERSON, Circuit Judges.
PER CURIAM:
Donna Smith, an underinsured motorist, hit Daniel Voss
while he was riding his bicycle. Voss turned to State Farm Insur-
ance, his underinsured-motorist insurance carrier. State Farm re-
fused to pay Voss until he won a judgment against Smith—thereby
proving her liability. After the trial, Voss was awarded $1.9 million
in damages. He then sued State Farm for breach of contract, bad
faith, and outrage. A magistrate judge granted State Farm sum-
mary judgment on each claim. 1 Now, Voss appeals that order. For
the reasons that follow, we affirm.
I
Donna Smith struck Daniel Voss with her car while he was
bicycling, severely injuring him. 2 Nationwide Mutual Insurance
1Pursuant to
28 U.S.C. § 636(c)(1), the parties consented to have their case
adjudicated by a magistrate judge.
2 Voss was taken to the University of Alabama at Birmingham hospital where
he underwent four brain surgeries. Despite those surgeries, some of Voss’s
injuries—including impaired cognitive function—will never fully heal.
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22-10243 Opinion of the Court 3
Company, Smith’s auto insurer, offered Voss its policy limits to set-
tle the claim against Smith. Unfortunately for Voss, Smith carried
only $25,000 in liability insurance—far less than his medical ex-
penses. See Smith v. Nationwide Mut. Ins. Co.,
799 F. App'x 768,
770 (11th Cir. 2020) (per curiam). Fortunately for Voss, at the time
of the collision, he was covered by several State Farm policies that
included $100,000 of underinsured motorist coverage—still less
than his medical expenses. Voss informed State Farm that Smith’s
insurance wouldn’t cover his medical costs and requested an un-
derinsured-motorist payment.
As its name implies, underinsured-motorist coverage pays
an insured for his losses caused by a driver that doesn’t have suffi-
cient liability insurance to cover the insured’s damages. Here it
worked essentially like this: Once Voss realized that Nationwide’s
policy-limits settlement offer wouldn’t cover the cost of his inju-
ries, he approached his insurer, State Farm. After receiving notice
that the settlement offer was insufficient to cover Voss’s costs, State
Farm began investigating Voss’s claim against Smith. At that point
the insurance policy gave State Farm two options: (a) consent to
the settlement with Smith/Nationwide or (b) refuse the settle-
ment. If State Farm consented to the settlement, Nationwide
would have paid Voss its $25,000 policy limits—thereby releasing
Smith from any liability—and Voss would then have commenced
a new, contract-based claim against State Farm for the costs of his
injuries (or, more likely, would have settled with State Farm for its
policy limits). If State Farm rejected the settlement, it was required
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4 Opinion of the Court 22-10243
to advance, or “front,” Voss the amount of the settlement, and
leave Voss to pursue a claim against Smith. See
id.
After investigating Voss’s claim, State Farm was uncertain
about Smith’s liability. 3 Accordingly, it chose option (b) and re-
jected Nationwide’s policy-limits settlement so that Voss would
have to prove Smith was, in fact, liable. State Farm “fronted” Voss
the money that Voss would have received from the Smith/Nation-
wide settlement, leaving Voss to continue with a suit against
Smith. Eventually, a jury found Smith liable to Voss for $1.9 mil-
lion. After the suit, State Farm paid Voss the other $75,000 of his
underinsured-motorist insurance coverage, and Nationwide paid
it’s $25,000 policy limit. That left Voss with an excess judgment of
$1.775 million against Smith.
So, Voss sued State Farm. He contended that State Farm
breached its insurance policy in two ways: (1) by failing to conduct
a good-faith investigation into the question of who was liable for
the collision; and (2) by refusing to consent to his settlement with
Smith/Nationwide, thereby forcing him to litigate against Smith
before paying him. He also contended that State Farm acted in bad
faith and committed the tort of outrage.
3 Thisis relevant because under Alabama law, for an insured to receive under-
insured motorist benefits, the insured must be legally entitled to recover from
the driver of the underinsured vehicle. See Ex parte Carlton,
867 So. 2d 332,
334 (Ala. 2003). Here, State Farm contends that there was evidence that Smith
wasn’t liable for the collision and, thus, that it believed Voss may not have
been entitled to payment.
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22-10243 Opinion of the Court 5
State Farm moved for summary judgment, which a magis-
trate judge granted. With respect to the breach-of-contract claim,
the magistrate judge held that, under Alabama law, State Farm had
to pay Voss only after he demonstrated he was entitled to recovery
from Smith, and Voss demonstrated liability only after his trial
against Smith, at which point State Farm paid him. It also held that
forcing Voss to litigate to establish Smith’s liability was permissible
under Alabama Law. Thus, the court held, State Farm did not
breach its contract. The court also held that Voss’s failure to show
a breach of contract was fatal to his bad-faith claim because breach
of an insurance contract is an element of that claim. Lastly, it held
that State Farm’s conduct was not egregious enough to support
Voss’s outrage claim. Voss now appeals the magistrate judge’s or-
der. 4
4 “We review a district court's”—or in this case, the magistrate judge’s—“grant
of summary judgment de novo.” McNamara v. Gov't Emps. Ins. Co.,
30 F.4th
1055, 1058 n.2 (11th Cir. 2022). “Summary judgment is proper if ‘the movant
shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.’”
Id. (quoting Fed. R. Civ. P. 56(a)).
“And a genuine dispute exists if a jury applying the applicable evidentiary
standard could reasonably find for either the plaintiff or the defendant as to
the material fact.” Brady v. Carnival Corp.,
33 F.4th 1278, 1281 (11th Cir. 2022)
(cleaned up). “[W]e view all evidence in the light most favorable to the non-
moving party and draw all justifiable inferences in that party's favor.” Afford-
able Bio Feedstock, Inc. v. United States, __ F. 4th __, No. 21-11850,
2022 WL
2920058, at *2 (11th Cir. July 26, 2022) (quotation omitted).
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6 Opinion of the Court 22-10243
II
For the reasons explained below, we hold that the magis-
trate judge correctly granted State Farm summary judgment on
each of Voss’s claims.
A
We start with breach of contract. Voss contends that State
Farm breached its insurance contract by failing to conduct a good-
faith investigation and by requiring him to sue Smith to recover
before paying him.
State Farm’s policy permitted it to “preserve [its] right of
subrogation against the . . . driver of the uninsured motor vehicle”
by paying Voss “an amount equal to” Nationwide’s settlement of-
fer. Doc. 73-22 at 8 (emphasis omitted). State Farm paid Voss
$25,000 to protect its subrogation right.
But Voss argues that State Farm shouldn’t have made him
pursue litigation against Smith. Under Alabama Supreme Court
precedent, an uninsured-motorist insurance carrier must conduct
a “good faith investigation” or otherwise “waive any right to sub-
rogation against the tort-feasor.” Lambert v. State Farm Mut.
Auto. Ins. Co.,
576 So. 2d 160, 167 (Ala. 1991). Voss seemingly con-
tends (1) that State Farm did not conduct a “good faith investiga-
tion” and thereby waived its right to subrogation and, accordingly,
(2) that it then breached the contract by requiring him to litigate
against Smith before being willing to pay him. Problematically for
Voss, Alabama considers a bad-faith failure to investigate a tort
claim, not a breach-of-contract claim. See State Farm Fire & Cas.
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22-10243 Opinion of the Court 7
Co. v. Brechbill,
144 So. 3d 248, 258 (Ala. 2013). And State Farm
did not breach any promise that it made in the insurance contract.
Moreover, Voss cannot prevail on a breach-of-contract
claim by arguing that State Farm should have paid him sooner.
The Alabama Supreme Court has held that an insurance company
can’t be held liable for breach before the insured shows he is “le-
gally entitled to recover” payment from the underinsured motor-
ist. Quick v. State Farm Mut. Auto. Ins. Co.,
429 So. 2d 1033, 1035
(Ala. 1983) (holding that State Farm wasn’t liable for failure to pay
on an uninsured motorist policy because the plaintiffs had not yet
demonstrated the uninsured driver’s liability); see also Broadway
v. State Farm Mut. Auto. Ins. Co.,
364 F. Supp. 3d 1329, 1332, 1335–
36 (M.D. Ala. 2019) (explaining that, to recover from an insurance
company, an insured must (1) prove that he is entitled to recovery
against the tortfeasor and (2) show his damages). In other words,
“[t]here can be no breach of an uninsured motorist contract . . . un-
til the insured proves that he is legally entitled to recover.” Quick,
429 So. 2d at 1035.
Voss did not prove that he was legally entitled to recover
from Smith until after trial—at which point State Farm paid him. 5
5 Trialis not the only method an insured has of showing that he is legally enti-
tled to recover. An insured can also present the insurance company with “sub-
stantial evidence” that the uninsured driver was liable. Ex Parte Safeway Ins.
Co. of Ala., Inc.,
148 So. 3d 39, 43 (2013) (quotation omitted); Broadway,
364
F. Supp. 3d at 1338–39 (M.D. Ala. 2019). But here, Voss did not do so. Alt-
hough Voss alleged to State Farm that Smith was negligent, he didn’t present
State Farm with substantial evidence showing that to be the case.
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8 Opinion of the Court 22-10243
Accordingly, State Farm did not breach its insurance contract by
refusing to pay Voss until after he was awarded damages from
Smith. Because Voss cannot prevail on a breach of contract claim,
the magistrate judge correctly granted summary judgment.
B
Next, Voss’s bad-faith claim. The Alabama Supreme Court
has held that “[r]egardless of whether the claim is a bad-faith refusal
to pay or a bad-faith refusal to investigate, the tort of bad faith re-
quires proof of the . . . absence of legitimate reason for denial.”
Brechbill, 144 So. 3d at 258 (emphasis added). Here, even if a jury
could find that State Farm’s investigation was sloppy, 6 it couldn’t
find that State Farm had no “legitimate reason” for its decision re-
quiring Voss to litigate. The accident report, State Farm’s photo-
graphs of the scene, and State Farm’s investigator’s conclusions all
reasonably led it to believe that Voss might have been contributo-
rily negligent—and therefore not “entitled to recover.” And State
Farm was within its rights to “insist that a jury determine liability
and damages.” Ex parte Allstate Prop. & Cas. Ins. Co.,
300 So. 3d
1124, 1126 (Ala. 2020). Because the facts, even viewed in favor of
Voss, cannot demonstrate that State Farm lacked a legitimate
6 And, to be sure, it was. State Farm did not speak to any of several available
witness who might have been able to explain what led to the collision. Nor
did it consult photographs of the scene taken by Nationwide just seven days
after the collision. Instead, State Farm relied primarily on a police report—the
information in which was derived solely from Smith (who had an obvious in-
terest in avoiding liability)—as well as photographs taken four months after
the collision.
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reason to insist on subrogation, Voss cannot succeed on his tor-
tious bad-faith claim and the court correctly granted summary
judgment.
C
Finally, “for a plaintiff to recover under [the tort of outrage],
he must demonstrate that the defendant's conduct (1) was inten-
tional or reckless; (2) was extreme and outrageous; and (3) caused
emotional distress so severe that no reasonable person could be ex-
pected to endure it.” Green Tree Acceptance, Inc. v. Standridge,
565 So. 2d 38, 44 (Ala. 1990). For essentially the same reasons that
we conclude that State Farm didn’t act in bad faith, we hold that a
reasonable jury could not find that State Farm’s conduct was “ex-
treme and outrageous.” Thus, Voss could not prevail on his out-
rage claim, and the magistrate judge correctly granted summary
judgment for State Farm.
* * *
In sum, the magistrate judge appropriately granted sum-
mary judgment. 7
7 Voss separately argues that the magistrate judge erred by “refusing to con-
sider any evidence presented by Voss’ expert in ruling on summary judgment
without making any affirmative ruling on State Farm’s motion to exclude.”
Br. of Appellant at 20. The magistrate judge didn’t “de facto” exclude Voss’s
evidence. Rather, as we read her opinion, the magistrate judge simply found
that Voss’s proposed evidence didn’t change the result and, accordingly, ruled
that the evidentiary motion was moot. Doc. 91 at 12, 29. Nowhere in her
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10 Opinion of the Court 22-10243
AFFIRMED.
opinion does the magistrate judge indicate that she refused to consider the
presented evidence.
