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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 16-14054
Non-Argument Calendar
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D.C. Docket No. 3:15-cv-00333-RV-CJK
GREGORY CHARLES WELFORD,
Plaintiff - Appellant,
versus
LIBERTY MUTUAL INSURANCE COMPANY,
Defendant,
LIBERTY INSURANCE CORPORATION,
Defendant - Appellee.
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Appeal from the United States District Court
for the Northern District of Florida
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(November 29, 2017)
Before JORDAN, ROSENBAUM, and BLACK, Circuit Judges.
PER CURIAM:
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Gregory Welford, as personal representative for the estate of Rachel
Welford, appeals the district court’s grant of summary judgment in favor of Liberty
Insurance Corporation (Liberty) as to his third-party claim that Liberty acted in bad
faith during the litigation of his wrongful-death claim against one of Liberty’s
insureds. On appeal, Welford argues that the district court failed to consider the
totality of the circumstances and misapplied Florida law in concluding that Liberty
was entitled to summary judgment. After review, 1 we affirm.
I. BACKGROUND
This case arises from a fatal car accident on February 26, 2009.2 At the time
of the accident, Liberty insured Lisa Mottsey and her daughter, Cassie Mayhair,
under an automobile insurance policy. The policy provided for bodily injury
liability coverage of $10,000 per person and $20,000 per accident. One of the
vehicles covered under the policy was a 1992 Mercury Sable, which was owned
either by Mayhair alone or Mottsey and Mayhair jointly.
On the night of February 26, John Middleton was driving the Mercury Sable
north on a two-lane road in Florida, going around or under the posted speed limit
of forty-five miles per hour. Mayhair was a passenger in the vehicle and let
1
“We review a district court’s grant of summary judgment de novo. . . .” Stephens v.
Mid-Continent Cas. Co., 749 F.3d 1318, 1321 (11th Cir. 2014).
2
We recount the facts in the light most favorable to Welford. See Stephens, 749 F.3d at
1321 (stating that we view the facts in the light most favorable to the nonmoving party when
reviewing the grant of a motion for summary judgment).
2
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Middleton drive because she had a headache. Matthew Zisa drove up behind
Middleton and attempted to pass him by crossing into the southbound lane in a
marked passing zone. Middleton sped up to block Zisa from passing him, so Zisa
slowed down and returned to the northbound lane. Middleton then slowed down,
and Zisa changed lanes a second time in order to pass him. Middleton again sped
up to make Zisa slow down. While attempting to pass Middleton, Zisa’s vehicle
struck three pedestrians, all of whom were wearing dark clothing and walking near
the middle of the southbound lane. Two of the pedestrians—Rachel Welford
(Rachel) and Jeremy Shipley—died as a result of the accident, and the third
pedestrian—Jonathan Kane—was injured.
On March 5, 2009, Rachel’s uncle contacted a law firm. Rickey Cook, Sr.,
an investigator for the firm, determined that each of the parties involved in the
accident might have been at fault: Zisa (for passing), Middleton (for speeding up),
and the pedestrians (for walking in the road at night). As of March 23, 2009,
however, it was unclear to Cook whether there was a viable claim against
Middleton. According to Cook, a police officer who investigated the accident also
stated that he “had ha[d] nothing to implicate Middleton in the accident.”
On May 7, 2009, Cook spoke with Mottsey, who stated that the Mercury
Sable had “minimal coverage”—“the basic what they had to have to keep a tag and
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be legal.”3 Mottsey refused to give Cook her insurance policy number or the name
of the insurance company.
After getting off the phone with Cook, Mottsey called Liberty and told it
Mayhair was a witness to an accident in which two pedestrians had died. She told
Liberty she would not give Cook any information and expressed incredulity at the
fact that he had contacted her, telling Liberty she did not “understand how a
witness to an accident that gives a statement . . . can be under investigation.” She
further stated that the Mercury Sable had not been involved in the crash.
According to Mottsey, Liberty told her that it would “flag [her] account in case
something came up” and that it would give her a call. Mottsey did not call Liberty
again until after August 21, 2009.
On August 21, 2009, Welford’s wife filed a complaint on behalf of Rachel’s
estate in state court against Zisa, Mottsey, Middleton, Mayhair, and one other
person.4 Although Welford would have settled for the policy limit before August
21, he never attempted to contact Liberty before August 21 or make any settlement
demands or offers to Liberty for an amount at or below the policy’s bodily injury
3
Although Mottsey testified—and we accept as true—that she did not tell Cook she
lacked bodily injury liability coverage, minimal coverage in Florida does not include bodily
injury liability coverage. See Fla. Stat. § 324.022(1) (requiring owners and operators of motor
vehicles to self-insure or obtain insurance covering liability for damage to property); Fla. Stat. §§
627.733, 627.736(1) (requiring owners or registrants of motor vehicles to obtain personal injury
protection).
4
At the time, Welford’s wife was the personal representative of Rachel’s estate. It
appears, however, that Welford had some control over the administration of the estate.
4
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liability limit. As of the time he filed the complaint, Welford was no longer
willing to settle for the insurance policy limit. Liberty did not begin investigating a
potential wrongful-death claim against Mottsey prior to August 21.
Mottsey was served with a copy of the complaint on October 3, 2009. On
October 5, she called Liberty and stated that she had been served. She faxed a
copy of the complaint to Liberty two days later. On October 8, Liberty sent
Mottsey a letter stating that its investigation into the accident indicated that
Mottsey’s exposure exceeded her bodily injury liability policy limit. The
following day, Liberty sent a letter to Shipley’s estate, Welford, and Kane, offering
to settle for the per-accident policy limit of $20,000, to be divided between the
victims. Liberty scheduled a mediation session, but Welford did not attend. On
November 2, 2010, Liberty sent checks for $6,666.66 to each of the victims.
Welford refused to accept the check. On July 21, 2011, Liberty offered to settle
Welford’s claim for the per-victim policy limit of $10,000.5 Welford rejected the
offer.
Welford’s lawsuit went to trial. The jury awarded Welford $1,320,000 and
found that Zisa was seven percent at fault, Middleton was thirty-eight percent at
fault, and Rachel was fifty-five percent at fault. The state court entered a judgment
5
By this point, Shipley’s estate had not filed suit, and the statute of limitations had
expired. With only two claimants left (Rachel’s estate and Kane), the $10,000 per-victim
liability limit applied, rather than the $20,000 per-accident limit.
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against Middleton, Mayhair, and Mottsey for $501,600, though Mayhair and
Mottsey were only held jointly and severally liable for the first $100,000, pursuant
to Florida law. After the judgment was affirmed on appeal, Liberty paid Welford
the bodily injury liability limit of $10,000 plus post-judgment interest. Mottsey
assigned to Welford her right to bring a bad-faith claim against Liberty.
Welford subsequently filed a complaint against Liberty in the circuit court
for Escambia County, Florida, alleging that Liberty acted in bad faith by failing to
investigate and make a timely offer to settle Welford’s wrongful-death claim.
Liberty removed the case to federal court. Following discovery, Liberty filed a
motion for summary judgment, which the district court granted. The district court
entered judgment in favor of Liberty. This appeal followed.
II. DISCUSSION
Under Florida law, “an insurer owes a duty of good faith to its insured.”6
Berges v. Infinity Ins. Co., 896 So. 2d 665, 672 (Fla. 2004). The insurer must “act
in good faith in the investigation, handling, and settling of claims brought against
the insured.” Id. at 682–83. The Supreme Court of Florida has explained an
insurer’s duty as follows:
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
6
Federal courts sitting in diversity apply the substantive law of the forum state.
Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427 (1996).
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advise the insured of any steps he might take to avoid same. The
insurer must investigate the facts, give fair consideration to a
settlement offer that is not unreasonable under the facts, and settle, if
possible, where a reasonably prudent person, faced with the prospect
of paying the total recovery, would do so.
Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla. 1980) (citation
omitted). Courts consider the totality of the circumstances in determining whether
an insurer acted in bad faith. Berges, 896 So. 2d at 680. Thus, the failure to meet
one of the obligations specified in Gutierrez does not automatically establish bad
faith; instead, it is simply one factor to consider. Id. While the question of
whether an insurer acted in bad faith is generally reserved for the jury, the Supreme
Court of Florida has concluded, in certain circumstances, that an insurance
company could not be held liable for bad faith as a matter of law. Id.
Here, the district court properly granted summary judgment in favor of
Liberty. The evidence demonstrates that Mottsey notified Liberty of the accident
on May 7, 2009. Mottsey told Liberty that Mayhair was a witness to a fatal
accident and the Mercury Sable was not involved. Later, Liberty initiated
settlement negotiations by attempting to settle Welford’s wrongful-death claim
almost immediately after being notified of the complaint. Prior to filing his
complaint, Welford did not contact Liberty or give Liberty notice that he intended
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to file suit. 7 Instead, Liberty was notified of Welford’s lawsuit on October 5, 2009,
two days after Mottsey was served and forty-five days after Welford filed his
complaint. At the latest, Liberty began its investigation two or three days after
being informed that Welford had filed suit. It notified Mottsey of her potential
exposure on October 8 and offered to settle for the per-accident policy limit on
October 9, only four days after receiving notice of the lawsuit and two days after
receiving a copy of the complaint.
Under the totality of the circumstances, a reasonable jury could not find that
Liberty acted in bad faith. It is true that Mottsey notified Liberty that Mayhair was
being investigated. Nevertheless, Liberty’s failure to initiate its own investigation
at this point was, at worst, negligent, given that Mottsey referred to Mayhair as a
witness and stated that the Mercury Sable was not involved in the accident.
Although Liberty’s potential negligence in this regard is relevant, negligence is
insufficient, standing alone, to establish bad faith. See Gutierrez, 386 So. 2d at 785
(“[N]egligence is relevant to the question of good faith.”); Campbell v. Gov’t
Emps. Ins. Co., 306 So. 2d 525, 530 (Fla. 1974) (“[The] standard[ ] for determining
liability in an excess judgment case is bad faith rather than negligence.”). We do
7
There is no evidence indicating that Welford was aware Mottsey had bodily injury
liability coverage. Thus, it appears that Welford did not intentionally fail to contact Liberty prior
to filing suit. The fact that he did not contact Liberty is nevertheless relevant because Liberty did
not have notice that Welford was willing to settle or that he intended to file suit if Liberty did not
settle. This fact weighs in favor of finding that Liberty did violate its duty of good faith by
failing to settle prior to the filing of the complaint.
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not believe the record supports a finding that Liberty was negligent for failing to
investigate the accident following the May 7 call, but even if it was negligent in
that instance, Liberty acted diligently in (1) investigating the accident after being
notified of the complaint, (2) informing Mottsey of her potential exposure to a
judgment in excess of the liability limit, and (3) attempting to settle Welford’s
claim for the per-accident liability limit after it received notice that he had filed
suit. After Welford declined its first settlement offer, Liberty again tried to settle,
but Welford refused. While Liberty did not make a pre-suit settlement offer, there
was no affirmative duty under applicable Florida law to do so, and even if there
was, such a duty would have been inapplicable because Middleton was not clearly
liable for the accident. See Powell v. Prudential Prop. & Cas. Ins. Co., 584 So. 2d
12, 13–14 (Fla. 3d DCA 1991). 8 Given Liberty’s otherwise diligent efforts and the
circumstances surrounding the accident, Liberty’s initial failure to investigate the
case and make a pre-suit settlement offer are insufficient to establish bad faith.
8
“[B]ecause we are bound to decide the issue the way the Florida courts would have, we
look to the decisions of the Florida appellate court that would have had jurisdiction over an
appeal in this case . . . .” Bravo v. United States, 532 F.3d 1154, 1164 (11th Cir. 2008).
Welford’s third-party bad-faith claim was filed in Escambia County. Thus, the First District
Court of Appeal would have had jurisdiction over any appeal in state court. The First District
Court of Appeal has not applied the holding in Powell. Nevertheless, we assume here for the
sake of argument that it would have interpreted an insurer’s duty of good faith to include an
affirmative duty to initiate pre-suit settlement negotiations when liability is clear and the injuries
are so serious that a judgment in excess of the policy limit is likely.
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III. CONCLUSION
The district court properly granted summary judgment because a reasonable
jury could not find that Liberty acted in bad faith in light of the circumstances.
Accordingly, the judgment of the district court is
AFFIRMED.
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