Jonathan Ellis v. Geico General Insurance Company

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[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-12159
Non-Argument Calendar
____________________
JONATHAN ELLIS,
Plaintiff-Appellant,
JOYCE BROBECK,
as Personal Representative of the Estate of Timothy Brobeck,
Plaintiff,
versus
GEICO GENERAL INSURANCE COMPANY,
Defendant-Appellee.
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2 Opinion of the Court 21-12159
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 0:19-cv-61611-WPD
____________________
Before JORDAN, NEWSOM, and BLACK, Circuit Judges.
PER CURIAM:
Jonathan Ellis appeals the district court’s grant of summary
judgment to GEICO General Insurance Company in Ellis’s bad
faith action against GEICO. Ellis filed an action for declaratory re-
lief in Florida state court asking the court to determine whether
GEICO should be held responsible for an excess judgment against
Ellis in a wrongful death case brought by Joyce Brobeck, the per-
sonal representative of the Estate of Timothy Brobeck. Upon re-
moval to federal district court, the court found that under the un-
disputed facts of the case, no reasonable jury could conclude that
GEICO operated in bad faith in its handling of Ellis’s claim. After
review, 1 we affirm.
1 “We review the district court’s grant of summary judgment de novo, viewing
all facts and drawing all inferences in the light most favorable” to Ellis. Eres
v. Progressive Am. Ins. Co., 998 F.3d 1273, 1278 n.3 (11th Cir. 2021). In diver-
sity cases, we apply the substantive law of the forum state, which in this case
is Florida law. See Palaez v. GEICO, 13 F.4th 1243, 1249 (11th Cir. 2021). “Alt-
hough bad faith is ordinarily a question for the jury, both this Court and Flor-
ida courts have granted summary judgment where there is no sufficient
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I. BACKGROUND
This case arises out of a car accident involving Ellis and Tim-
othy Brobeck, resulting in Brobeck’s death. On September 7, 2014,
Ellis struck the rear of Brobeck’s bicycle and fled. At the time of
the accident, Ellis was insured by GEICO under an automobile lia-
bility insurance policy which provided bodily injury liability cover-
age in the amount of $10,000 per person and $20,000 per accident.
Subsequent to the accident, Joyce Brobeck, as personal representa-
tive of Timothy Brobeck, filed suit against Ellis. Brobeck’s estate
ultimately received a final judgment against Ellis for $479,280.56.
On May 21, 2019, Ellis filed this declaratory action against GEICO,
seeking a declaration that GEICO had handled the Estate of Bro-
beck’s claim against Ellis in bad faith. 2
After fleeing the scene of the accident, Ellis hired a lawyer
on September 8, and he was arrested on September 10. Ellis re-
mained in jail until September 22, and upon release, obtained a new
cellphone with a different number because the police did not re-
turn his previous cellphone. Ellis also stayed in the homes of a
friend or his uncle because he did not want to be alone and did not
have the mail forwarded from his apartment. Ellis was advised by
evidence from which any reasonable jury could have concluded that there was
bad faith on the part of the insurer.” Eres, 998 F.3d at 1278 (quotation marks
and citation omitted).
2 This suit was originally filed by Ellis against Joyce Brobeck as personal repre-
sentative of the Estate of Brobeck and GEICO; however, the district court re-
aligned the parties in an Order entered on December 2, 2019.
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his criminal defense attorney not to talk with anyone about the ac-
cident, which Ellis believed included GEICO.
Brobeck was survived by his mother, Joyce, his wife Laura,
and their 16-year-old daughter, Barbara, who has cerebral palsy.
Laura hired Fort Lauderdale lawyer Hyram Montero to represent
Timothy’s estate, but Joyce served as personal representative be-
cause Laura lived in Argentina.3 Montero was unable to obtain a
copy of the Florida Traffic Crash Report because the Fort Lauder-
dale Police Department (FLPD) was conducting a Traffic Homi-
cide Investigation, but his team found a news article about the ac-
cident. Montero went to the FLPD and was provided with the hit
and run driver’s name, his insurance company, and policy number.
On September 16, 2014, Montero instructed his receptionist,
Rosemary Gomez, to send a letter of representation to GEICO. On
October 9, 2014, Montero asked Gomez to call GEICO because it
had not responded to the letter. Gomez complied and provided
GEICO with the information in the news article. GEICO’s claim
activity log for October 9 shows Gomez told GEICO that Brobeck
was a bicyclist who died of his injuries, Ellis fled from the scene of
the accident, Ellis was arrested a few days later when he went to
the police department to claim his car, and a document referred to
as a “complain[t] affidavit” showed when Ellis was arrested.
Gomez informed Montero that GEICO claimed it had not received
3Laura and Barbara had moved to Argentina before the accident occurred so
that Laura could take care of her parents after her mother had a heart attack.
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21-12159 Opinion of the Court 5
the September 16 letter of representation, and Gomez sent GEICO
a new letter of representation by fax.
On October 9, GEICO assigned the case to adjuster Bobbie
Harney, who attempted to contact Ellis and Montero on October
9, and was unable to reach either. Harney, however, left a
voicemail for Ellis and mailed a first contact letter and a reservation
of rights letter that day. On October 10, Montero’s office told Har-
ney that Brobeck was thrown from his bike when Ellis struck it
from the rear. Because Harney was unable to reach Ellis by tele-
phone, she met with her supervisor, John Smith, and they decided
to enlist the assistance of a field adjuster to locate Ellis.
On October 12, Harney again unsuccessfully tried to contact
Ellis and left a voicemail. On October 13, Ann Sholar was assigned
as the field investigator to locate Ellis. Sholar performed a Google
search and found a news article about the accident. On October
13, Harney again tried to contact Ellis but could not reach him.
Harney left a voicemail with Ellis and tried to locate updated con-
tact information for Ellis.
On October 15, Sholar attempted to visit Ellis’s place of em-
ployment, Stache’s, but did not enter the building due to safety
concerns as it was a windowless building named “Himmie Health
Club.” Sholar also attempted to visit Ellis’s residence, but the
apartment was empty. Sholar left a GEICOgram at Ellis’s residence
requesting he contact GEICO. Sholar also received a return call
from FLPD that day with Ellis’s case number, a confirmation that
Ellis was out on bail, and the phone number the FLPD had for Ellis.
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On October 16, Harney unsuccessfully attempted to contact
Ellis at two phone numbers and left voicemails at both. On Octo-
ber 17, Sholar called the FLPD and discovered it had Ellis’s traffic
citation, but not the Florida Traffic Crash Report. Sholar did not
request or follow up on Ellis’s traffic citation at that time.
On October 20, Harney again tried to contact Ellis on both
numbers she had for him, but she was unable to reach him and left
voicemails. On October 21, Sholar contacted the FLPD to obtain
the Florida Traffic Crash Report but was informed the officer re-
sponsible for the report was not in that day. That same day GEICO
received a voicemail advising that Officer Jill Hirsch was handling
the investigation. GEICO returned the call and left a voicemail re-
garding the Florida Traffic Crash Report.
On October 22, Harney asked Montero for a copy of the
Florida Traffic Crash Report. On that same day, GEICO again sent
a reservation of rights letter to Ellis, noting his delay in reporting
the loss may prejudice GEICO’s investigation of the claim. On Oc-
tober 23, Sholar again contacted FLPD to request a copy of the
Florida Traffic Crash Report and was once again told that the re-
port was not available.
On October 27, Sholar received notice that the Florida Traf-
fic Crash report was available at the FLPD. On October 29, at 9:35
a.m., GEICO finally obtained a copy of the Florida Traffic Crash
Report. Within minutes of the receiving the report, Smith and
Harney met and decided to tender Ellis’s full bodily injury limits to
Brobeck based on confirmation that Ellis’s vehicle was involved in
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21-12159 Opinion of the Court 7
the loss, and following the meeting, Harney immediately updated
the claim to list Ellis as 100% at fault. At the same time, GEICO
dispatched Sholar to hand deliver a check for the policy limits and
an accompanying release to Montero’s office. GEICO also sent a
letter to Ellis advising him of the possibility of a judgment in excess
of his policy limits, his right to hire his own counsel, that GEICO
would provide him a defense if suit were filed, and of Ellis’s right
to contribute toward the settlement of the claim.
On November 11, 2014, GEICO received a letter from Mon-
tero rejecting the tender of the policy limits as untimely. Montero
considered any tender after October 16, 2014 untimely, but would
have provided GEICO a grace period through October 22, 2014,
when GEICO provided him a verification of coverage. Montero’s
opinion is that GEICO did not act in good faith towards Ellis and
did not treat this case with the urgency it required because it failed
to follow up on leads that would have enabled it to make a timely
tender of policy limits. Montero faulted GEICO for failing to obtain
the VIN and tag numbers from the wrecker company that towed
the accident vehicle, failing to obtain the Complaint Affidavit, fail-
ing to obtain the traffic citation, failing to enter Ellis’s place of em-
ployment because of the unjustified fear that it was unsafe, failing
to act on leads because of scheduling conflicts, and failing to go to
the police department in person.
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II. DISCUSSION
A. Florida bad faith law
Florida courts have long recognized “the good faith duty in-
surers owe to their insureds in handling their claims.” Harvey v.
GEICO Gen. Ins. Co., 259 So. 3d 1, 6 (Fla. 2018); Boston Old Col-
ony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla. 1980).
“[B]ecause the insured ‘has surrendered to the insurer all control
over the handling of the claim, including all decisions with regard
to litigation and settlement, . . . the insurer must assume a duty to
exercise such control and make such decisions in good faith and
with due regard for the interests of the insured.’” Harvey, 259 So.
3d at 6 (quoting Boston Old Colony, 386 So. 2d at 785). “An in-
surer, in handling the defense of claims against its insured, has a
duty to use the same degree of care and diligence as a person of
ordinary care and prudence should exercise in the management of
his own business.” Boston Old Colony, 386 So. 2d at 785.
This good faith duty obligates the insurer to advise
the insured of settlement opportunities, to advise as
to the probable outcome of the litigation, to warn of
the possibility of an excess judgment, and to advise
the insured of any steps he might take to avoid same.
The insurer must investigate the facts, give fair con-
sideration to a settlement offer that is not unreasona-
ble under the facts, and settle, if possible, where a rea-
sonably prudent person, faced with the prospect of
paying the total recovery, would do so.
Id. (citations omitted).
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“Breach of this duty may give rise to a cause of action for
bad faith against the insurer.” Perera v. U.S. Fid. & Guar. Co., 35
So. 3d 893, 898 (Fla. 2010). Where “liability is clear, and injuries so
serious that a judgment in excess of the policy limits is likely, an
insurer has an affirmative duty to initiate settlement negotiations.”
Harvey, 259 So. 3d at 7 (quotation marks omitted). “In such a case,
where the financial exposure to the insured is a ticking financial
time bomb and suit can be filed at any time, any delay in making
an offer . . . even where there was no assurance that the claim could
be settled could be viewed by a fact finder as evidence of bad faith.”
Id. (quotation marks and alterations omitted).
“[T]he question of whether an insurer has acted in bad faith
in handling claims against the insured is determined under the ‘to-
tality of the circumstances’ standard.” Berges v. Infinity Ins. Co.,
896 So. 2d 665, 680 (Fla. 2004). “[T]he critical inquiry in a bad faith
action is whether the insurer diligently, and with the same haste
and precision as if it were in the insured’s shoes, worked on the
insured’s behalf to avoid an excess judgment.” Harvey, 259 So. 3d
at 7. While “negligence is not the standard” for evaluating bad faith
actions, id. at 9, “[b]ecause the duty of good faith involves diligence
and care in the investigation and evaluation of the claim against the
insured, negligence is relevant to the question of good faith,” Bos-
ton Old Colony, 386 So. 2d at 785. The focus of the bad faith case
is on the actions of the insurer, not those of the claimant. Berges,
896 So. 2d at 677. For that reason, a claimant’s “actions can[not]
let the insurer off the hook when the evidence clearly establishes
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that the insurer acted in bad faith in handling the insured’s claim.”
Harvey, 259 So. 3d at 11.
B. GEICO did not operate in bad faith
Ellis contends the district court erred in granting summary
judgment to GEICO because the record contains sufficient evi-
dence from which a reasonable jury could conclude GEICO acted
in bad faith in the handling of the Estate of Brobeck’s wrongful
death claim against Ellis. Because the case was a ticking financial
time bomb with aggravated liability, big damages, and low insur-
ance policy limits, GEICO was required to take a proactive role to
settle the case within policy limits. Ellis asserts with the infor-
mation GEICO had—Ellis’s arrest and traffic citation, a news arti-
cle, a telephone conversation with FLPD, and the location of the
towing company where Ellis’s vehicle was towed—coverage could
have been verified within days after notice of the Brobeck claim.
Instead, GEICO needlessly prolonged its investigation by waiting
until it could obtain a copy of the Florida Traffic Crash Report
when GEICO knew the release of police reports are delayed when
a fatality occurs. Ellis contends under these circumstances, a rea-
sonable jury could find that GEICO did not act with the same de-
gree of care and diligence as a person of ordinary care and prudence
should exercise with the management of his own business, or that
GEICO diligently, and with the same haste and precision as if it
were in Ellis’s shoes, worked on his behalf to avoid an excess judg-
ment.
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While Ellis points to speculative, alternative investigatory
avenues that GEICO’s adjusters could have explored in the time
period between October 9 and October 29, Ellis overlooks the ef-
forts GEICO did take to investigate the claim and confirm cover-
age. Given the undisputed facts of this case, we agree with the dis-
trict court that no reasonable jury could conclude that GEICO op-
erated in bad faith under the totality of the circumstances. Upon
receiving late notice of the accident on October 9, 2014, GEICO
immediately began its investigation and was diligent in its investi-
gation. However, despite its efforts to investigate the loss, GEICO
was unable to determine to what extent Ellis and his vehicle were
involved in the loss until GEICO obtained the Florida Traffic Crash
Report on October 29, 2014. The Florida Traffic Crash Report con-
tained Ellis’s vehicle identification number, which allowed GEICO
to confirm Ellis’s vehicle was involved in the loss. Once GEICO
knew there was coverage upon receiving the Florida Traffic Crash
Report on October 29, 2014, it immediately extended coverage for
the loss, apportioned 100% liability on Ellis, and immediately ten-
dered the policy limits.
GEICO’s efforts in timely confirming coverage were frus-
trated by Ellis’s lack of communication. While GEICO’s actions,
not Ellis’s, are the focus of the bad faith case, Ellis’s lack of commu-
nication with GEICO can be considered when determining the to-
tality of the circumstances. See Berges, 896 So. 2d at 677, 680. The
same day it received notice of the accident, GEICO attempted to
discuss the loss with Ellis and left a voicemail. Ellis did not respond
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or return GEICO’s call. GEICO attempted to contact Ellis repeat-
edly during the next 20 days and left multiple voicemail messages
for Ellis to confirm his involvement. GEICO also sent Ellis multi-
ple letters. None of GEICO’s attempts to communicate received a
response.
GEICO also made other attempts to verify coverage. On
October 13, GEICO assigned a field representative to assist in lo-
cating Ellis and obtaining a copy of the police report. Over the next
16 days, Sholar communicated with FLPD on many occasions.
Sholar also visited Ellis’s alleged place of employment, although
she did not enter for safety concerns. She then attempted to visit
Ellis’s residence, and Ellis’s apartment was empty. Sholar left a
GEICOgram at Ellis’s residence requesting he contact GEICO as
“there has been a report of an accident involving an injury to an-
other.”
An insurer—acting with diligence and due regard for its in-
sured—is allowed a reasonable time to investigate a claim; no obli-
gation exists to tender policy limits in advance of a settlement offer
without time for investigation. See Boston Old Colony, 386 So. 2d
at 785 (explaining part of good faith duty is obligation of insurer to
investigate the facts); De Laune v. Liberty Mut. Ins. Co., 314 So. 2d
601, 603 (Fla. 4th DCA 1975) (recognizing the right to first make an
inquiry and evaluate merits of a claim before obligation to settle is
triggered). Even if one of Ellis’s alternate avenues of confirming
coverage would have done so more quickly, under the totality of
the circumstances, a reasonable jury could not say GEICO was not
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21-12159 Opinion of the Court 13
acting diligently and with the same haste and precision as if they
were in the insured’s shoes.
III. CONCLUSION
On the undisputed facts, Ellis has raised no possible infer-
ence of bad faith. See Eres, 998 F.3d at 1281. We affirm the district
court.
AFFIRMED.