Joshua Kincaid v. Allstate Property and Casualty Insurance Company

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-10465
Non-Argument Calendar
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D.C. Docket No. 2:13-cv-14030-DLG
JOSHUA KINCAID,
Plaintiff - Appellant,
versus
ALLSTATE INSURNACE COMPANY,
Defendant,
ALLSTATE PROPERTY AND CASUALTY
INSURANCE COMPANY,
Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(July 30, 2014)
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Before HULL, FAY and COX, Circuit Judges.
PER CURIAM:
This case arises from an automobile accident caused by the Plaintiff, Joshua
Kincaid. While driving under the influence of alcohol, Kincaid severely injured
Deon Vanzyl. Kincaid’s insurer, Allstate Property and Casualty Insurance
Company (“Allstate”), aggressively sought to settle with Vanzyl for Kincaid’s full
policy limits. However, Vanzyl’s attorney rejected the terms of the release Allstate
prepared, refused to consider additional settlement offers, and filed suit in a Florida
state court. Vanzyl ultimately received a $16 million dollar judgment. With this
judgment secured, Vanzyl made Kincaid agree to bring this bad-faith claim against
Allstate in exchange for a delay and possible satisfaction of the judgment. The
district court granted Allstate’s summary judgment motion. Kincaid appeals.
Because we find no error in the district court’s reasoning, we affirm.
I. Facts and Procedural History
In April 2006, Kincaid drove his automobile out of a parking lot and into the
path of Vanzyl’s motorcycle. At the time of the accident, Kincaid was 17 years old
and insured under a policy issued by Allstate to his parents with $100,000 in bodily
injury liability coverage. Kincaid was legally impaired by alcohol and received a
DUI charge for the accident. Kincaid admits that the accident was his fault. As a
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result of the accident, Vanzyl was placed in an intensive care unit, and he remains
partially paralyzed.
On April 10, 2006, Allstate received notification of the accident and began
investigating. By April 24, 2006, Allstate’s adjuster learned of Vanzyl’s identity
and injuries. Three days later, Allstate mailed Vanzyl a check and release for the
full $100,000 bodily injury policy limits. At the same time, Allstate contacted
Kincaid’s family and attorney to tell them that Allstate would try to settle Vanzyl’s
claim, but that the claim may exceed the policy limits.
Attorney Brand Peters of the firm Morgan & Morgan, P.A. sent Allstate a
letter saying that he was representing Vanzyl. Over the next four months, Allstate
contacted Peters thirty-one times attempting to negotiate a settlement. Peters only
responded three times and refused to discuss settlement each time.
On October 13, 2006, Allstate’s adjuster received a letter from Peters dated
October 6, 2006, proposing a settlement that must be concluded within fifteen
days—that is October, 20, 2006. The letter was delayed because Peters sent it to
the wrong Allstate office. The letter proposed a settlement of $6,764.45 for
Vanzyl’s property injury. The letter also proposed that Vanzyl would purchase the
salvage of Kincaid’s jeep if Allstate would reduce its offer from $1,293.00 to
$1,000.00. And, the letter demanded $195.00 for damage caused to Vanzyl’s
helmet. Notably, the letter did not mention any settlement for personal injury. In
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fact, Peters specifically noted that he had returned Allstate’s $100,000.00 check for
Vanzyl’s bodily injuries, and Peters did not request a replacement. The terms of
the demand letter were vague. The letter provided that,
As for the release, Mr. Vanzyl will sign it if you get me your basic mutual general
release, executed and prepared for my client's signature with provisions releasing
all civil claims, including property damage, between my client and Allstate, Mr.
Kincaid and the owner(s), along with the complete disclosures requested in my
May 12 letter and the checks within fifteen days of the date on this letter.
Otherwise, if we cannot agree to these release terms, I have enclosed a release
document that we will agree to. If the latter, we just need to agree to an amount
so we can insert it in . . .
Despite requesting a “basic mutual general release,” the release Peters attached that
“Vanzyl will agree to” only released Allstate and its insureds from property
damage claims. It did not release Vanzyl from any claims or release anyone from
bodily injury claims. The release provided that,
In exchange for consideration of $______________, DEON SMUTS VANZYL
(“Releasor”) hereby release and forever discharges DANIEL FAIN, CHRISTINE
FAIN, JOSHUA KINCAID, and ALLSTATE PROPERTY AND CASUALTY
INSURANCE COMPANY (“Releasees”) from all claims and causes of action
which Releasor now has or may hereafter accrue for property damage as a result
of the automobile accident which occurred on April 7, 2006 in Martin County,
Florida (“accident”).
Allstate’s insurance adjuster was confused about the terms of the letter, especially
because Allstate had no “basic mutual general release.” Because of her confusion,
she hired an outside attorney, David DeArmas, the same day. The adjuster
requested that DeArmas help her comply with the offer and explained that Allstate
wanted to do whatever was necessary so long as its insureds were released from all
claims. Although the letter was ambiguous, Allstate understood it as also
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contemplating settlement of Vanzyl’s personal injury claims for the $100,000.00
bodily injury policy limit.
DeArmas also found the request for the release confusing and thought it was
impossible to ascertain exactly what Peters was requesting. The next business day,
October 16, 2006, he called Peters, but did not receive an answer. DeArmas left a
voicemail informing Peters that Allstate wished to settle but could not comprehend
what type of release or disclosures Peters desired. DeArmas left both his home and
cell phone numbers and asked Peters to call him back whenever convenient. Peters
returned the call by calling DeArmas’s office at 9:26 PM—when it was closed.
The next day, October 17, 2006, DeArmas again attempted to contact Peters, was
unable to reach him, and left the same message with both his home and cell phone
numbers. Again, Peters returned the phone call by calling DeArmas’s office the
next day, October 18, 2006, at 7:22 AM—when it was closed. DeArmas returned
the call and—upon once again receiving no answer—sent Peters a fax asking
Peters to “specifically describe[e] each additional item you need from Allstate in
order to accept the policy.” (R. 63-15.) DeArmas never received a response that
day or the next day, October 19, 2006.
By the following day, October 20, 2006, the deadline for the settlement had
been reached, and DeArmas still had not received any clarification. So, DeArmas
sent two releases that he believed complied with Peters’s request and included a
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note stating that the releases were not a material part of the settlement. He
requested that Peters fax any proposed changes if he believed there had not been
full compliance. Neither Allstate nor DeArmas received any response from Peters.
On October 23, 2006, DeArmas received a letter from Peters dated October
20, 2006, returning the settlement checks and advising that Vanzyl would be filing
suit because a satisfactory release had not been provided. For the first time Peters
explained that he wanted a release which was first signed by Allstate and all the
insured parties that also released Vanzyl from any claims—even though no claims
were made against Vanzyl and the release Peters proposed did not include such a
provision. Upon receiving this clarification, DeArmas drafted the requested
release and delivered it to Peters. Peters once again rejected the settlement even
though it complied with his requests.
As stated in the letter, Vanzyl filed a personal injury suit against Kincaid.
Throughout the suit and on appeal in state court Allstate unsuccessfully argued that
it had reached a binding settlement with Vanzyl. Ultimately, a final judgment of
$16,299,163.88 was entered in favor of Vanzyl. After the verdict, Vanzyl entered
an agreement with Kincaid whereby Kincaid would bring this bad faith suit in
exchange for a stay of the execution of the judgment and a possible satisfaction if
Kincaid succeeded in this suit. In this agreement, Vanzyl was represented by
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Morgan & Morgan, P.A.—the same firm that failed to provide the details
necessary for Allstate to settle the case.
Kincaid filed the complaint in this suit, alleging that Allstate acted in bad
faith by failing to settle Vanzyl’s claim. Allstate moved for summary judgment
contending that no reasonable jury could find that it acted in bad faith. The district
court granted Allstate’s motion and Kincaid appeals.
II. Issue on Appeal
Whether the district court erred by granting Allstate’s summary judgment
motion.
III. Standard of Review
We review a district court’s grant or denial of summary judgment de novo,
viewing all evidence in the light most favorable to the non-moving party. Dolphin
LLC v. WCI Cmtys., Inc., 715 F.3d 1243, 1247 (11th Cir. 2013). The moving party
bears the burden of establishing the absence of a genuine issue of material fact and
that it is entitled to judgment as a matter of law. Id. Once the moving party meets
this burden, the non-moving party bears the burden of presenting evidence on each
essential element of its claim, such that a reasonable jury could rule in its favor.
As this case is based on diversity jurisdiction, we apply the law of the forum state,
Florida. McMahan v. Toto, 256 F.3d 1120, 1131 (11th Cir. 2001).
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IV. Discussion
A. The district court correctly applied Florida law as stated by the Florida
Supreme Court.
Kincaid contends that the district court erred by applying law from the
decisions of the Florida Supreme Court instead of applying the law from Florida
jury instructions. While we find no conflict or difference between these two
statements of law, our precedent is clear that we apply state law as determined by
the highest court in a state, in this case the Florida Supreme Court. Riley v.
Kennedy, 553 U.S. 406, 425, 128 S. Ct. 1970, 1985 (2008). Accordingly, the
district court did not err by looking to decisions of the Florida Supreme Court to
determine Florida law.
B. The district court correctly granted summary judgment because there was
no evidence of bad faith.
Kincaid contends that a reasonable jury could find Allstate was negligent
because Allstate did not provide the precise release that Peters desired. According
to Kincaid, this possibility of negligence also means that a reasonable jury could
find that Allstate acted in bad faith.
Kincaid equates negligence and bad faith and assumes that because there
may be evidence of negligence, there is sufficient evidence for a reasonable jury to
find that Allstate acted in bad faith. Florida law does not support such an
assumption. In contrast, the Florida Supreme Court has specifically stated that the
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standard for liability in an excess judgment case under Florida law “is bad faith
rather than negligence.” Campbell v. Government Employees Ins. Co., 306 So. 2d
525, 531 (1974) (emphasis added).
Although Kincaid is incorrect that evidence of negligence is evidence of bad
faith, this is not the end of our inquiry. Under Florida law, an insurer commits bad
faith when it fails to act in “good faith and with due regard for the interests of the
insured.” Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla.
1980). Florida has recognized that negligence is relevant to determining whether
an insurer acted in bad faith because negligent claim handling may indicate an
insurer who is acting without due regard for the insured. Id. Thus, to decide
whether summary judgment is correct we must examine all of the evidence—
including any evidence of negligence—and determine whether a reasonable jury
could find that Allstate acted in bad faith.
In this case, Allstate almost immediately offered to tender its full policy
limits to settle the claims against Kincaid. Allstate aggressively sought to settle the
case and repeatedly contacted Peters to attempt settlement. When presented with
Peters’s inexplicably rushed and demanding settlement offer, Allstate did not balk
or negotiate, but rather immediately sought to comply with the terms. Because
Allstate was not confident it could comply with Peters’s demands, it went so far as
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to hire DeArmas, an outside attorney, for the sole purpose of meeting Peters’
demands.
When DeArmas was also perplexed about Peters’s demands, he attempted to
contact Peters through phone calls, faxes, and hand deliveries. DeArmas even
provided his home and cell phone numbers so that Peters could reach him at any
time. After all these attempts failed, DeArmas prepared two different releases for
Peters to choose between. DeArmas noted that the terms of the release were not
material to Allstate and that they would be glad to make any requested changes.
Peters rejected Allstate’s releases, declined Allstate’s invitations to revise the
language or use an alternate release, and filed suit. Undaunted, Allstate sent a third
release to Peters and proceeded to argue in Florida state court that the parties had
reached a binding settlement.
Ultimately, Peters claims Allstate did not draft the release he desired. But,
all the evidence shows this was at most a negligent mistake, and not bad faith.1
Allstate’s conduct in this case is not the behavior of an insurer avoiding settlement
or acting carelessly. The evidence clearly establishes that Allstate consistently
acted with due regard for Kincaid’s interest. We find it hard to imagine how
1
We say this is “at most a negligent mistake” because it is not clear from the evidence
that it was a mistake at all. In the letter rejecting the settlement, Peters claimed to reject the
release because it did not contain a provision where Allstate and its insured release all claims
against Kincaid. But, the sample release that Peters said Vanzyl would agree to did not release
any claims against Vanzyl either. So, the release language Peters ultimately claims he desired
conflicts with the language he proposed and said his client would accept.
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Allstate could be acting in bad faith when it had already offered the full policy
limits, aggressively sought to settle the case at every turn, and even continued to
argue at all points that it had reached a binding settlement with Vanzyl. Based on
this evidence, the district court correctly concluded that no reasonable jury could
find that Allstate acted in bad faith.
V. Conclusion
Accordingly, the district court did not err by granting Allstate’s summary
judgment motion.
AFFIRMED.
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