Bad Faith Insurance Claim Attorney Seeks Damages for Denial of Insurance Coverage*

This is a review of an Appellate Court decision which arose from a previous ruling entered by a Florida Circuit Court. The lower court's ruling was entered after the trial of a lawsuit filed by a bad faith insurance claim attorney.

The lawsuit was originally filed after an injured woman claimed her insurance company wrongfully denied a substantial portion of her claim for compensation after she was involved in an automobile collision. As a result, she sought the legal services of a bad faith insurance claim attorney.

She filed suit against her insurance company contending Breach of the Insurance Contract and Tortious Breach of an Insurance Contract. The insurance company's attorney answered the suit denying both causes of action.

The trial was held in Florida's Circuit Court. After all the admitted evidence was heard and attorneys for both sides rested, the lower court held partially in favor of the woman. The court ruled the insurance company did breach their contract with the woman and ordered the insurance company to compensate her for therapy bills they earlier refused to pay. 

The court though held against the woman on her tortious bad faith claim against the insurance company, and dismissed that part of her claim

Statement of Facts...

On February 12th, 2011, the plaintiff Elizabeth Alex was driving her car home from work. It was about 6:30 p.m. She was traveling southbound on a local two lane highway. Up ahead the traffic light turned yellow. Instead of attempting to make it through the light, Alex applied her brakes and stopped.

At about the same time another vehicle traveling behind her apparently believed Alex was going to drive through the yellow light, and with that belief he sped up to follow her. When he realized Alex wasn't going to go through the light it was too late. Although he applied his brakes, he ran into the rear of Alex's car.

As a result of the collision, Alex suffered a fractured tibia, whiplash, and other contusions, lacerations, and abrasions. She was taken by ambulance to Flagler Memorial Hospital where she was treated. She spent two days in the hospital recovering and required 120 days of therapy upon her release.

Because the State of Florida is a "No Fault" insurance state, Alex turned to her own insurance company, Gaiger Insurance, Inc, for compensation. She submitted medical bills in the amount of $4,000, and therapy bills in the amount of $3,800. Gaiger agreed to pay the $4,000 in medical bills, but only agreed to pay $1,200 for the therapy bills.

Alex made numerous attempts to convince Gaiger to pay the balance of $2,600 for her therapy bills. When Gaiger continued to refuse, Alex retained a bad faith insurance claim attorney and filed her lawsuit.

The Lawsuit...

In the lawsuit Alex contended Gaiger breached the insurance contract to pay the balance of the therapy bills, and that this breach was in fact "tortious."

A simple breach of an insurance contract can occur if the insurance company receives a claim from the insured and refuses to pay all or part of that claim,

When that happens, the insured normally has legal remedies available to either force the insurance company to abide by the terms of the insurance contract, or to pay damages for bad faith refusal to pay the claim.

The breach of an insurance contract can also be a "tort." If the breach is a tort or tortious, the insured person can be entitled to damages beyond their original insurance claim.

A tortious breach of the insurance contract normally arises when the insurance company breaches the contract purposely. It is up to the court to decide if a breach is tortious based on the evidence presented at trial.

That evidence has to convince the court by its preponderance that the insurance company purposely, willfully, maliciously, recklessly or in a another legally inappropriate manner attempted to wrongfully deny an insured their rightful claim.

Alex and her attorney intended to show that Gaiger's refusal to pay all her claim was in their words "purposeful, willful, and malicious."

To that end, Alex testified she made numerous contacts with Gaiger and had also produced her therapy bills multiple times. She called to the stand her physical therapist. The therapist was licensed in the State of Florida and was the only therapist who worked with Alex during her recovery. He testified in his opinion the therapy was necessary for Alex's full recovery.

Gaiger then called to testify their own licensed physical therapist. The court earlier permitted Gaiger's therapist to examine Alex. The therapist testified although it was true Alex was injured and therapy was appropriate, in his opinion 120 days of therapy was excessive.

Outcome...

After hearing the admitted evidence, including the arguments of the plaintiff's bad faith insurance claim attorney and the attorney for the defendant, the court concluded:

We find the plaintiff's evidence of her injuries to be credible. As to the differences of opinion in the length and need for therapy we find the plaintiff's evidence supports her need for physical therapy for the period of 120 days. 

In that regard we find the defendant breached their contract to Alex. We therefore order the defendant to pay for the remainder of the plaintiff's therapy in the amount of $2,600.

We also find the plaintiff failed to present sufficient evidence to show the defendant acted in a manner which would have been tortious. Their actions, although incorrect, were made based on the standards the defendant relied upon for many years. Those standards were uniform and applied to almost all of the types of injuries sustained by the plaintiff. 

We therefore find the defendant did not commit a tortious breach of the insurance contract. On that ground we uphold the decision of the Circuit Court. As to her claim for tortious breach of contract the plaintiff takes nothing.