FIRST OF GEORGIA INSURANCE COMPANY, APPELLANT,
v.
LEO DUBE, JR., APPELLEE
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First of Georgia Insurance Company appealed a $400,000 judgment for breach of contract after refusing to defend its insured, Dube, in an underlying personal injury case. The appellate court reversed, holding that an insurer's liability for wrongful refusal to defend is limited to policy limits ($25,000) absent either bad faith or a settlement offer made after judgment against the insured.
An insurer's liability for wrongful refusal to defend is limited to the policy limits unless either bad faith is involved or the insurer refuses a settlement offer made after the original plaintiff obtains judgment against the insured. Since neither circumstance existed here, First of Georgia's liability is limited to $25,000.
[1] An insurer is liable for policy limits only when it wrongfully refuses to defend its insured, absent a finding of bad faith or an offer to settle within policy limits aft…
[2] A trial court errs in entering a judgment against an insurer for an amount exceeding policy limits when the insurer wrongfully refused to defend, and neither bad faith no…
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Join FLexlaw to unlock all legal intelligence“where there is a refusal to defend, the insurer owes no more than policy limits unless: (1) bad faith is involved, or (2) the insurer refuses an offer to settle made after the original plaintiff has obtained a judgment against its insured.”
Establishes the legal standard for insurer liability when refusing to defend; limits damages to policy limits absent bad faith or refusal of a post-judgment settlement offer.
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Join FLexlaw to unlock all legal intelligenceDube was allegedly negligent in an accident that caused Barnes to lose an eye. Dube's parents held a homeowner's insurance policy with First of Georgi…
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PER CURIAM.
By this appeal we address the question of whether the trial court erred in entering a final judgment against appellant, First of Georgia, in the amount of $400,000 where there was no finding of bad faith and where there was no offer made by the plaintiff to settle within the policy limits after it secured judgment against appellee, Dube. We have determined that it did so err, and, consequently, reverse and remand the cause to the trial court with directions.
The occurrence upon which the action is based involved the appellee, Dube, and another young man, Barnes, who through the alleged negligence of Dube suffered the loss of an eye. Initially it was an issue as to whether Dube was an insured under a homeowner’s policy of insurance issued to Dube’s parents by appellant, First of Georgia. Appellant stood firm on the question regarding certain exclusionary language used in the policy dealing with denial of liability on the basis that the accident was incident to a “business pursuit”, and, thus, outside the realm of coverage. First of Georgia declined to defend Dube prior to and after the time when Barnes filed suit. The action proceeded to trial against Dube only, and judgment was entered for the plaintiff Barnes;1 subsequently, Dube filed against appellant for breach of contract, the trial court found against appellant and entered judgment for Dube in the amount of $400,000.
Appellant herein contends that its liability is limited to the amount recited in the policy, $25,000, and that where there is a refusal to defend, the insurer owes no more than policy limits unless: (1) bad faith is involved, or (2) the insurer refuses an offer to settle made after the original plaintiff has obtained a judgment against its insured. Since it is unrefutably agreed that neither of these situations has been asserted by appellee, we agree with appellant that it is liable for the policy limits only. See, Central National Insurance Company v. Gonzalez, 295 So. 2d 694 (Fla. 3d DCA 1974) and St. Paul Fire and Marine Insurance Company v. Thomas, 273 So. 2d 117 (Fla. 4th DCA 1973).
Reversed and remanded to the trial court with directions to vacate the final judgment and enter an amended final judgment.
. Incidentally, no demand for settlement was ever made upon appellant after entry of the judgment in favor of Barnes. Policy limits had been demanded of appellant by counsel for Barnes prior to the first suit.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Robinson v. State Farm Fire & Cas. Co., 583 So. 2d 1063 (Fla. 5th DCA 1991)…cases because the insurer “exercised no faith at all.”15 The Third District Court of Appeal has held there can be no excess judgment in the absence of bad faith even where there was a breach of the duty to defend. First of Georgia Ins. Co. v. Dube, 376 So. 2d 910 (Fla. 3d DCA 1979); Central Nat’l Ins. Co. v. Gonzalez, 295 So. 2d 694 (Fla. 3d DCA 1974). The question that arises in light of the ruling below is whether, in an “excess” case, the merits of the coverage defense and the insurer’s conduct after den…
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Green v. The J.C. Penney Auto Ins. Co., Inc., 806 F.2d 759 (7th Cir. 1986)…old that, wholly apart from bad faith, if an insurer refuses to accept a settlement offer within the policy limits and wrongfully refuses to defend the insured, then damages may exceed the policy limits. See, e.g., First of Georgia Ins. Co. v. Dube, 376 So. 2d 910, 911 (Fla.Dist.Ct.App.1979); George R. Winchell, Inc. v. Norris, 6 Kan.App.2d 725, 633 P. 2d 1174, 1177 (1981). Some courts, notably those in California, follow this causation approach but add that the settlement offer rejected by the insurer must b…
Authorities Cited
- ST. Paul Fire & Marine Ins. Co. v. Thomas, 273 So. 2d 117 (Fla. 4th DCA 1973)
- Bennie F. Graham v. State, 295 So. 2d 694 (Fla. 3d DCA 1974)