[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 04-10436 FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
D. C. Docket No. 02-01675-CV-T-26-MAP JUNE 6, 2005
THOMAS K. KAHN
CLERK
MICHELLE MACOLA,
Plaintiff-Appellant,
INGE QUIGLEY,
Consolidated Plaintiff-Appellant,
versus
GOVERNMENT EMPLOYEES INSURANCE COMPANY,
Defendant-Appellee.
________________________
Appeals from the United States District Court
for the Middle District of Florida
_________________________
(June 6, 2005)
Before ANDERSON and WILSON, Circuit Judges, and OWENS*, District Judge.
PER CURIAM:
*
Honorable Wilbur D. Owens, Jr., United States District Judge for the Middle District of
Georgia, sitting by designation.
This appeal arises out of a state law bad faith claim against Government
Employees Insurance Company ("GEICO") and is before this court under diversity
jurisdiction. After one of its insureds, Mr. Frances Quigley,1 caused a car wreck,
GEICO failed to reach a settlement with Michelle Macola, an injured third party.
Macola subsequently filed suit against Quigley and eventually won a judgment in
excess of the GEICO policy limits. After Macola filed suit against Quigley, but
before the verdict was returned, Quigley filed a statutory Civil Remedy Notice
("CRN") with the Florida Department of Insurance alleging that GEICO had acted
in bad faith in failing to settle with Macola for the policy limits when it had the
opportunity to do so. After the verdict was returned, Macola and Quigley filed
similar common law bad faith actions against GEICO.
Florida law allows an insurer to "cure" alleged bad faith by paying the
damages or correcting the circumstances giving rise to the violation within sixty
days of the filing of a CRN. Fla. Stat. § 624.155(3)(d) (2004). During that sixty
day period (and before the verdict in the underlying case), GEICO attempted to
cure its alleged bad faith by tendering the personal injury policy limits to Quigley.
1
Mr. Quigley caused the wreck and then died during the course of the underlying
litigation. His wife, Inge Quigley, was named the personal representative of his estate, and in
that capacity was substituted for Mr. Quigley in all related litigation. For the sake of simplicity,
we will use “Quigley” to refer to Mr. Quigley or his estate.
2
The district court held that this tender cured any bad faith on the part of GEICO
and granted GEICO’s motion for summary judgment on Quigley’s and Macola’s
claims. Quigley and Macola appealed, arguing that (1) GEICO's tender of the
policy limits did not constitute an adequate cure under the circumstances of this
case and (2) even if GEICO's tender did cure the statutory bad faith claim, it did not
bar a common law bad faith action.
I. Background
On May 18, 1999, Quigley negligently caused a car wreck in which Macola
was injured. At the time of the accident, Quigley was insured under a policy issued
by GEICO with a bodily injury liability limit of $300,000 and a property damage
liability limit of $100,000. The day after the accident, Quigley’s wife notified
GEICO of the accident and of the fact that Quigley and Macola had suffered
serious injuries. GEICO assigned Dale Junco to manage the claim.
On May 24, 1999, GEICO received a fax notifying it that Macola had
retained an attorney, Michael Roe, and requesting Quigley’s insurance information.
Junco mailed the requested information to Roe on June 7, 1999.
On September 2, 1999, Junco talked to Roe, who told her that Macola had
already undergone multiple surgeries, would require more, and was still out of
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work. Roe promised to send Junco whatever medical information he had in the
hopes of entering a settlement negotiation. He also told Junco that he believed this
was a “policy limits” case.
On October 19, 1999, Roe sent GEICO a settlement offer seeking payment of
the full personal injury policy limit as well as numerous items of property damages
totaling $1,377.81. The letter included a traffic crash report and numerous medical
records, and it stated that the settlement offer would expire in 21 days. In order to
comply with its terms, the letter stated, GEICO would have to tender the requested
sums at Roe’s office and provide a copy of Quigley’s insurance policy and an
affidavit stating that no other insurance coverage was available.
On November 8, 1999, within the 21 day period laid out in the settlement
offer, GEICO tendered the $300,000 bodily injury policy at Roe’s office. In
addition to the $300,000, GEICO sent a note requesting further clarification of the
property damage claims as well as a release that was explicitly inapplicable to any
claims for property damage. Roe did not respond for 120 days despite GEICO’s
repeated attempts to contact him during that time. He also never deposited the
$300,000 draft that GEICO tendered.
On February 15, 2000, Macola returned GEICO’s $300,000 check (along
4
with a letter rejecting GEICO’s “counteroffer” of November 8) and filed suit
against Quigley in Florida state court. In that suit, Macola asserted a claim for
personal injuries, but no claim for property damages.2 Prior to filing an answer in
that case, Quigley offered to pay all of Macola’s claimed property damages and
tendered payment in the amount of $1,377.81. Macola rejected that tender and
proceeded with the underlying litigation.3
In July 2000, five months after Macola filed the underlying action against
Quigley and two years before the entry of judgment, Quigley, through her personal
counsel ("Cardillo"), served GEICO with a statutory CRN. Therein, she alleged
that GEICO violated § 624.155(1)(b)(1), Florida Statutes (2004), by failing to settle
with Macola for the policy limits when it had the opportunity to do so. Under that
statute, “no action shall lie” if the violator cures its bad faith by paying “the
damages” or correcting “the circumstances giving rise to the violation” within 60
days of receiving the CRN. See Fla. Stat. § 624.155(3)(d); Talat Enters., Inc. v.
Aetna Cas. & Sur. Co., 753 So. 2d 1278, 1281-84 (Fla. 2000).
2
Because Macola failed to assert a claim for property damages in the underlying action,
the district court deemed this claim waived; we agree.
3
After Quigley filed her answer but prior to the entry of judgment against her, GEICO
filed a declaratory judgment action asking the Florida trial court to declare that Macola’s claims
had been settled. On January 5, 2002, the trial court granted Macola’s motion for summary
judgment in GEICO’s declaratory judgment action, and the Second District Court of Appeal
affirmed. See GEICO General Ins. Co. v. Macola, 816 So. 2d 618 (2002).
5
On August 25, 2000, within 60 days of the CRN, GEICO sent Cardillo a
check for $300,000, the limit of Quigley’s personal injury policy. Cardillo
acknowledged receipt of the check but never deposited it. GEICO did not tender a
check for the property damages that Macola claimed in the original settlement
negotiations (but abandoned in the underlying action).
On July 9, 2002, the trial court entered a final judgment against Quigley in
the amount of $1,541,941.61. On August 23, 2002, Macola filed a common law
bad faith suit against GEICO. Macola’s suit alleged that GEICO breached its duty
of good faith to Quigley by failing to settle with Macola when the opportunity
arose, by failing to timely inform Quigley of Macola’s settlement offer, and by
failing to timely advise Quigley of the likelihood of an excess judgment and how to
avoid it. GEICO removed Macola’s suit to federal court and filed an answer
denying liability.
On June 27, 2003, Quigley filed a separate common law bad faith action
against GEICO in federal district court. Because this suit was based on the same
underlying facts as Macola’s, the district court consolidated the two cases. As its
fifth affirmative defense to Macola and Quigley’s claims, GEICO argued that it had
cured any bad faith by tendering the personal injury policy limits to Quigley within
the 60 day post-CRN cure period provided for in § 624.155.
6
On December 15, 2003, both Macola and Quigley filed motions for partial
summary judgment alleging that GEICO’s cure theory was legally insufficient.
That same day, GEICO filed a consolidated motion for summary judgment against
Macola and Quigley, citing its cure theory as legally controlling. The district court
denied Macola and Quigley’s motions for partial summary judgment and granted
GEICO’s motion for summary judgment based on the cure theory.
II. Discussion
It is clear that Florida law controls all issues in this appeal, and none of the
relevant facts are disputed. The only questions before this court involve the
interpretation and application of § 624.155, which provides as follows:
(1)(b) Any person may bring a civil action against an insurer when
such person is damaged . . . [b]y the commission of any of the
following acts by the insurer:
1. Not attempting in good faith to settle claims when, under all
the circumstances, it could and should have done so, had it acted
fairly and honestly toward its insured and with due regard for her or
his interests.
(3)(a) As a condition precedent to bringing an action under this
section, the department and the authorized insurer must have been
given 60 days’ written notice of the violation. If the department
returns a notice for lack of specificity, the 60-day time period shall
not begin until a proper notice is filed.
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(d) No action shall lie if, within 60 days after filing notice, the
damages are paid or the circumstances giving rise to the violation are
corrected.
GEICO urges this court to hold that, under § 624.155, its post-CRN tender of the
policy limits cured any bad faith and absolved it of any liability for the subsequent
excess judgment. Macola and Quigley take the opposite position and alternatively
argue that Florida law allows them to pursue a common law bad faith claim even if
GEICO's tender did effect a cure of the statutory claim.
A. The Cure Issue
In Talat, this Court asked the Florida Supreme Court to determine whether
payment of all contractual damages within 60 days of a CRN precluded a statutory
first party bad faith claim for extra-contractual damages suffered prior to the CRN.
753 So. 2d at 1280. The Florida Supreme Court held that "an insurer need not
immediately pay 100% of the damages claimed to flow from bad faith conduct" in
order to effect a cure under § 624.155. Id. at 1282. However, Talat is
distinguishable from the present case because it involved a first party bad faith
claim in which there was no danger of an excess judgment. This distinction is
suggested by the Talat court's statement that "[t]o cure an alleged violation and to
avoid a civil action, an insurer must pay the claim (sometimes in excess of policy
limits in the third-party context) before the sixty days expire." Id. (emphasis
8
added). While this statement is dicta, it leaves open the possibility that an insurer
may not be able to effect a cure by simply tendering the policy limits in the third
party context.
Opinions from Florida's intermediate appellate courts do little to clarify the
issue. The Fifth District Court of Appeal has stated that an insurer effects a cure
under § 624.255 when it tenders the policy limits after learning of a third party's
intent to file suit for bad-faith failure to settle. See Clauss v. Fortune Ins. Co., 523
So. 2d 1177, 1179 (1988). However, the primary holding in Clauss was that the
insurer was entitled to summary judgment because it had not violated its duty of
good faith. Id. Even if the alternative holding in Clauss rested squarely on the cure
issue, it would be in tension with a subsequent case from the Third District Court
of Appeal. In Hollar v. International Bankers Insurance Company, 572 So. 2d 937,
939 (1990), the Third District rejected an insurer's "self-serving reading of the term
'damages' as being confined to policy limits." The court went on to state that,
because the "function of the bad-faith claim is to provide the insured with an extra
contractual remedy[,] . . . a tender of policy limits will not ordinarily satisfy the
insured's full claim of damages for a bad-faith claim." Id. at 939-40. When read in
conjunction, Clauss and Hollar offer no clear guidance on the questions currently
before this court.
9
The only potentially relevant federal court opinion is Francois v. Illinois
National Insurance Company, No. 01-8070 (S.D. Fla. Mar. 28, 2002), aff'd without
opinion, 49 Fed. Appx. 290 (11th Cir. 2002). The facts in Francois were virtually
indistinguishable from those in Clauss, and the district court followed Clauss in
holding that the insurer had effected a cure pursuant to § 624.155. Id. at *6-7.
However, as in Clauss, the Francois court alternately held that the insurer was
entitled to summary judgment because it had not acted in bad faith. Id. at *8.
Given its status as an alternative holding in an unpublished district court opinion,4
Francois is of little persuasive value in this case. Because we are left with only the
conflicting statements in Clauss and Hollar, we conclude that it is appropriate to
certify the issue to the Florida Supreme Court.
B. The Election of Remedies/Satisfaction Issue
In the event that GEICO's tender of the policy limits did constitute a cure of
Macola and Quigley's statutory bad faith claim, we must next consider whether that
cure extinguished any common law claims. The district court held that Quigley
elected the statutory remedy when she filed the CRN and therefore was estopped
from pursuing a common law claim. It alternately held that, should the doctrine of
4
It is unclear whether the unpublished affirmance was based on the relevant alternative
ground.
10
election of remedies not apply, GEICO's tender had fully satisfied any bad faith
claim. We address these alternate holdings in turn.
1. Election of Remedies
"Under Florida law . . . the election of remedies doctrine applies only where
the remedies in question are coexistent and inconsistent." Barbe v. Villenueve, 505
So. 2d 1331, 1332 (Fla. 1987). Remedies are only inconsistent where "the
allegations of facts necessary to support one remedy are substantially inconsistent
with those necessary to support the other . . .." Id. at 1333 (internal quotation
omitted). Since the statutory and common law bad faith claims in this case depend
upon substantially similar factual allegations, they appear to be consistent under
Florida law.
We also note that the statutory remedy at issue in this case "does not preempt
any other remedy or cause of action provided for pursuant to any other statute or
pursuant to the common law of this state." Fla. Stat. § 624.155(8) (2004). That
distinguishes the instant litigation from cases like Mandico v. Taos Construction,
Inc., 605 So. 2d 850, 853 (Fla. 1992), wherein the Florida Supreme Court held that
an employee who had received workers' compensation benefits had elected an
exclusive remedy and was estopped from bringing a common law claim against his
employer. See Fla. Stat. §440.11(1) (2002) (providing that workers' compensation
11
benefits are "exclusive and in place of all other liability"); Thornber v. Fort Walton
Beach, 568 So. 2d 914, 918 (Fla. 1990) ("Whether a statutory remedy is exclusive
or merely cumulative depends upon the legislative intent as manifested in the
language of the statute."). Because the statutory and common law remedies depend
upon the same nucleus of facts and are cumulative rather than exclusive, the district
court erred in holding that they are inconsistent as a matter of Florida law.
Therefore, under Barbe, the district court erred in holding that Quigley's CRN
constituted an election of remedy that estopped her from pursuing a common law
bad faith claim.
2. Satisfaction
While we are confident that Quigley's decision to file a CRN did not estop
her common law bad faith claim, we are less certain about the effect of GEICO's
tender. As noted above, the statute provides that its remedy does not preempt a
common law cause of action. Fla. Stat. § 624.155(8). However, that same
statutory provision also provides that “[a]ny person may obtain a judgment under
either a common-law remedy of bad faith or this statutory remedy, but shall not be
entitled to a judgment under both remedies.” Id. This would seem to be consistent
with general Florida law, which provides that "only a full satisfaction of the right
asserted will estop the plaintiff from pursuing other consistent remedies. All
12
consistent remedies may in general be pursued concurrently even to final
adjudication; but the satisfaction of the claim by one remedy puts an end to other
remedies." Barbe, 505 So. 2d at 1333 (quoting Am. Process Co. v. Florida White
Pressed Brick Co., 47 So. 942, 944 (Fla. 1908)); see also Sec. & Inv. Corp. v.
Droege, 529 So. 2d 799, 802 (Fla. 4th DCA 1988) ("[I]f the remedies are
concurrent or cumulative, and logically can coexist on the same facts, the doctrine
of election does not apply until the injured party has received full satisfaction for
his injuries.").
The district court held that GEICO's tender constituted a full satisfaction of
Quigley's bad faith claim. If this holding is correct, then Quigley is estopped from
pursuing a common law claim.5 In other words, the district court believed that a
full and valid cure6 – i.e., the payment of the full policy limits within the required
sixty days – also constituted a full satisfaction of the bad faith claim. On the other
hand, Appellants argue that payment of the policy limits does not fully satisfy their
bad faith claim, which they argue includes not only the contractual policy limits,
but also damages resulting from GEICO’s actions that left Quigley exposed to an
5
Because Macola's bad faith claim is derivative of Quigley's, satisfaction of Quigley's
claim would necessarily extinguish Macola's as well. See Fid. & Cas. Co. of New York v. Cope,
462 So. 2d 459, 461 (Fla. 1995).
6
Of course, our discussion of the satisfaction issue assumes, arguendo, that there has
been a full and valid cure. Otherwise, the satisfaction issue is moot.
13
excess judgment. We have found no controlling Florida cases, and there seem to
be conflicting policy arguments. We are already certifying the cure issue to the
Florida Supreme Court, and we conclude that it is appropriate to certify this issue
as well.
III. Certification
"Where there is doubt in the interpretation of state law, a federal court may
certify the question to the state supreme court to avoid making unnecessary Erie
guesses and to offer the state court the opportunity to interpret or change existing
law." Tobin v. Mich. Mut. Ins. Co., 398 F.3d 1267, 1274 (11th Cir. 2005).
Because the issues in this case may well impact the development of Florida's
insurance law, we are reluctant to proceed without clear guidance from Florida's
courts. We therefore certify the following questions to the Florida Supreme Court:
(1) IN THE CONTEXT OF A THIRD PARTY BAD FAITH CLAIM
WHERE THERE IS A POSSIBILITY OF AN EXCESS JUDGMENT,
DOES AN INSURER "CURE" ANY BAD FAITH UNDER § 624.155
WHEN, IN RESPONSE TO A CIVIL REMEDY NOTICE, IT TIMELY
TENDERS THE POLICY LIMITS AFTER THE INITIATION OF A
LAWSUIT AGAINST ITS INSURED BUT BEFORE THE ENTRY
OF AN EXCESS JUDGMENT?
(2) IF SO, DOES SUCH A CURE OF THE STATUTORY BAD
FAITH CLAIM CONSTITUTE A FULL SATISFACTION OF THE
JUDGMENT SUCH THAT THE INSURED AND DERIVATIVE
INJURED THIRD PARTIES ARE BARRED FROM BRINGING A
14
COMMON LAW BAD FAITH CLAIM TO RECOVER THE
DIFFERENCE BETWEEN THE POLICY LIMITS AND THE EXCESS
JUDGMENT?
Our statement of the questions to be certified is not meant to limit the scope
of inquiry by the Florida Supreme Court. "This latitude extends to the Supreme
Court's restatement of the issue or issues and the manner in which the answers are
given." Washburn v. Rabun, 755 F.2d 1404, 1406 (11th Cir. 1985). Similarly, an
answer to one of the questions may render resolution of the other one unnecessary.
In order to assist the court's consideration of the case, the entire record, along with
the briefs of the parties, shall be transmitted to the court. QUESTIONS
CERTIFIED.
15