Waldemar Baranowski v. GEICO General Insurance Company

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 17-12122
Non-Argument Calendar
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D.C. Docket No. 8:17-cv-00301-JDW-TGW
WALDEMAR BARANOWSKI,
Plaintiff-Appellant,
versus
GEICO GENERAL INSURANCE COMPANY,
a foreign insurance corporation,
Defendant-Appellee.
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Appeal from the United States District Court
for the Middle District of Florida
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(January 9, 2018)
Before TJOFLAT, WILLIAM PRYOR and NEWSOM, Circuit Judges.
PER CURIAM:
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Waldemar Baranowski appeals the dismissal of his complaint against his
automobile liability insurance provider, Geico General Insurance Company, for its
alleged bad faith in failing to settle a personal injury action by Jiri Renotierova for
the limits of Baranowski’s insurance policy. The district court dismissed the
complaint as barred by the four-year statute of limitation that governs actions for
intentional torts. See Fla. Stat. § 95.11(3)(o). But Florida law provides that an
action for the bad faith refusal of an insurer to settle a covered claim arises in
contract, Allstate Ins. Co. v. Kelley, 481 So. 2d 989, 990 (Fla. 1986); Gov’t Emps.
Ins. Co. v. Grounds, 332 So. 2d 13, 14 (Fla. 1976), which is subject to a five-year
statute of limitation, Fla. Stat. § 95.11(2)(b). Because Baranowski filed his
complaint within five years after the entry of an excess judgment against him, we
vacate the order of dismissal and remand for the district court to reinstate
Baranowski’s complaint.
Renotierova and his wife sued Baranowski for serious injuries that
Renotierova suffered after being ejected from the passenger seat of Baranowski’s
vehicle. Baranowski, who had a liability insurance policy with coverage of
$10,000 per person and $20,000 per occurrence, notified Geico of the lawsuit.
Geico failed to settle the dispute, and a jury returned a verdict in favor of the
Renotierovas on their claims of negligence and loss of consortium. On June 29,
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2012, the state court entered a second amended final judgment for more than $2.6
million against Baranowski.
On February 7, 2017, Baranowski filed a complaint in the district court
against Geico for failing to negotiate and settle with the Renotierovas in good faith.
Baranowski alleged that Geico “acted in bad faith” by failing “to accept a
reasonable offer and opportunity to settle [the] case within its policy limits when it
could and should have done so”; failing “to exercise reasonable care and good faith
in the investigation, negotiation, and attempted settlement of the claim”; and
failing “to advise [him] of settlement opportunities” and warn him “of the
possibility of an excess judgment.” Baranowski also alleged that Geico acted in
bad faith by failing “to adopt and implement standards for the proper investigation
and handling of claims”; failing “to properly train [its] adjusters and claims
personnel”; and failing “to comply with its own policies and procedures . . . in the
handling of the claim.”
Geico moved to dismiss the complaint as untimely under the four-year
statute of limitation applicable to actions for negligence, Fla. Stat. § 95.11(3)(a), or
alternatively, to actions not specifically mentioned in the statute, id. § 95.11(3)(p).
See Fed. R. Civ. P. 12(b)(6). Baranowski responded that the applicable statute of
limitation was five years because, under Grounds, 332 So. 2d 13, and Nationwide
Mut. Ins. Co. v. McNulty, 229 So. 2d 585 (Fla. 1969), his complaint of bad faith
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refusal to settle arose in contract, Fla. Stat. § 95.11(2)(b). The district court
dismissed Baranowski’s action as being for the breach of fiduciary duties, which is
“‘considered a tort[,]’ Doe v. Evans, 814 So. 2d 370, 374 (Fla. 2002),” and
“‘subject to a four-year statute of limitations[,]’ Woodward v. Woodward, 192 So.
3d 528, 531 (Fla. Dist. Ct. App. 2016),” under section 95.11(3)(o) of the Florida
Statutes.
We review de novo the dismissal of a complaint as untimely. See Berman v.
Blount Parrish & Co., Inc., 525 F.3d 1057, 1058 (11th Cir. 2008). The timeliness
of Baranowski’s action depends on a “determination[] of state law,” which we
review de novo. See Venn v. St. Paul Fire and Marine Ins. Co., 99 F.3d 1058, 1062
(11th Cir. 1996). “The district court [was] required to follow the Florida Supreme
Court’s decision[s] on [the] issue of Florida law.” Id. at 1063.
Baranowski’s complaint of bad faith was an action arising out of a contract
instead of an action in tort. In 1938, when the Supreme Court of Florida held that
an “insurer must act in good faith toward [its] assured in its effort to negotiate a
settlement,” it concluded that “duty[ arose] not under the terms of the contract
strictly speaking, but because of and flowing from” the right of the insurer by
contract “to take charge of the defense of [the] claim.” Auto Mut. Indem. Co. v.
Shaw, 184 So. 852, 859 (Fla. 1938). Although “most states treat [an action for bad
faith] as a tort claim or as a combination of tort and contract,” Florida treats bad
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faith as a matter of contract. Swamy v. Caduceus Self Ins. Fund, Inc., 648 So. 2d
758, 760 (Fla. Dist. Ct. App. 1994); Venn, 99 F.3d at 1065. See McNulty, 229 So.
2d at 586; Travelers Indem. Co. v. Butchikas, 313 So. 2d 101, 104 (Fla. 1975);
Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla. 1980); Kelley,
481 So. 2d at 990; Am. Vehicle Ins. Co. v. Goheagan, 35 So. 3d 1001, 1003 (Fla.
Dist. Ct. App. 2010). It does not matter “that the proofs offered to establish an
insurer’s bad faith . . . may include or consist of showing an act of negligence
[because that] does not take the cause of action out of the contract category.”
Grounds, 332 So. 2d at 14 (quoting McNulty, 229 So. 2d at 586); see Lumbermens
Mut. Cas. Co. v. August, 530 So. 2d 293, 295 (Fla. 1988) (“Although . . . an action
to recover uninsured motorist benefits . . . involves some aspects of a tort action,
. . . the rights and obligations of the parties under an insurance policy are governed
by contract law because they arose out of an insurance contract.”). Baranowski’s
complaint against Geico was in “the nature of an action . . . ex contractu rather than
in tort.” Grounds, 332 So. 2d at 14 (quoting McNulty).
Baranowski timely filed his complaint within the limitation period for an
action on a contract. In Florida, “[a] legal or equitable action on a contract . . .
founded on a written instrument” has a statute of limitation of five years. Fla. Stat.
§ 95.11(2)(b). The five-year limitation period applies to a complaint against an
insurer for refusing in bad faith to settle a claim. Woodall v. Travelers Indem. Co.,
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699 So. 2d 1361, 1362 n.2 (Fla. 1997); Burnett v. Fireman’s Fund Ins. Co., 408
So. 2d 838, 838 (Fla. Dist. Ct. App. 1982). The potential action against Geico
accrued when the state court entered the final excess judgment against Baranowski.
See Vest v. Travelers Ins. Co., 753 So. 2d 1270, 1275 (Fla. 2000). As Geico alleged
in its motion to dismiss, Baranowski filed his complaint “four years, seven months,
and nine days after the Second Amended Final Judgment was entered” against him.
Because Baranowski’s complaint was timely, the district court erred by dismissing
his action as barred by the statute of limitation.
We VACATE the order that dismissed Baranowski’s complaint as untimely
and REMAND for the district court to reinstate his complaint.
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