Case 8:23-cv-01260-KKM-NHA Document 162 Filed 03/31/25 Page 1 of 35 PageID
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`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF FLORIDA
`TAMPA DIVISION
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`RANDY WILLOUGHBY,
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`
`
`Plaintiff,
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`
`
`
`
`
`v.
`GOVERNMENT EMPLOYEES
`INSURANCE COMPANY,
`
`Defendant.
`
`
`
` Case No. 8:23-cv-1260-KKM-NHA
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`
`
`ORDER
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`GEICO moves for summary judgment on Plaintiff Randy Willoughby’s bad-faith
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`insurance claim. I grant in part and deny in part GEICO’s motion. Mot. for Summ. J.
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`(MSJ) (Doc. 128).
`I. BACKGROUND
`On November 2, 2012, Eddie Ellison negligently operated his vehicle and caused a
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`collision with the passenger side of a sedan. Joint Statement of Undisputed Facts (JSUF)
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`(Doc. 127) ¶ 1. Randy Willoughby, a passenger in the sedan, suffered “severe head
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`tra[u]ma” and was left permanently injured. Id. ¶ 1; (Doc. 127-1) at 2. At the time of the
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`accident, Ellison and his wife had a GEICO insurance policy with a $100,000 liability limit
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`per person for bodily injury and a $100,000 liability limit for property damage. JSUF ¶ 2;
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`1
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`7840
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`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF FLORIDA
`TAMPA DIVISION
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`
`
`
`
`RANDY WILLOUGHBY,
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`
`
`Plaintiff,
`
`
`
`
`
`
`v.
`GOVERNMENT EMPLOYEES
`INSURANCE COMPANY,
`
`Defendant.
`
`
`
` Case No. 8:23-cv-1260-KKM-NHA
`
`
`
`ORDER
`
`GEICO moves for summary judgment on Plaintiff Randy Willoughby’s bad-faith
`
`insurance claim. I grant in part and deny in part GEICO’s motion. Mot. for Summ. J.
`
`(MSJ) (Doc. 128).
`I. BACKGROUND
`On November 2, 2012, Eddie Ellison negligently operated his vehicle and caused a
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`collision with the passenger side of a sedan. Joint Statement of Undisputed Facts (JSUF)
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`(Doc. 127) ¶ 1. Randy Willoughby, a passenger in the sedan, suffered “severe head
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`tra[u]ma” and was left permanently injured. Id. ¶ 1; (Doc. 127-1) at 2. At the time of the
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`accident, Ellison and his wife had a GEICO insurance policy with a $100,000 liability limit
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`per person for bodily injury and a $100,000 liability limit for property damage. JSUF ¶ 2;
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`(Doc. 1-1) at 11–42. The policy also stated that GEICO would, upon request by the
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`insured, provide reimbursement for “[c]osts incurred by any insured for first aid to others
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`at the time of an accident involving an owned auto or non-owned auto” and “[a]ll
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`reasonable costs incurred by an insured at [GEICO’s] request.” (Doc. 1-1) at 26; see JSUF
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`¶ 3.
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`Within a few days after the accident, GEICO learned that Willoughby suffered
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`serious injuries and was in a coma. JSUF ¶ 4; (Doc. 127-3) at 2. On November 7, 2012,
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`five days after the accident, GEICO determined that Ellison was 100% liable for the
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`accident. JSUF ¶ 5; (Doc. 127-5). The next day, GEICO sent a letter to Ellison advising
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`him of the available coverage and informing him that Willoughby’s claims may exceed the
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`coverage limits. JSUF ¶ 6; (Doc. 127-6). The same day, GEICO informed the primary
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`adjuster, Jodie Prendes, that she had the authority to offer the $100,000 bodily injury limit
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`to Willoughby in exchange for a release and upon confirmation that “Randy Willoughby
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`is competent or if he is not competent[,] someone is or will be appointed to represent his
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`interests.” JSUF ¶ 7 (alteration in the original); (Doc. 127-7).
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`On November 12, 2012, GEICO attempted to contact Willoughby’s family both
`at his home address and the hospital. JSUF ¶ 8; (Doc. 127-8). At the hospital,
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`Willoughby’s father asked the GEICO field representative to leave. (Doc. 127-8) at 2. The
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`GEICO representative also learned the full extent of Willoughby’s injuries, including a
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`head injury, facial fractures, and a fractured pelvis. Id. at 4. In total, between November 9,
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`2012, and November 29, 2012, GEICO wrote six letters to Willoughby and his parents
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`regarding the claim. JSUF ¶ 9; (Doc. 127-9). GEICO offered the $100,000 bodily injury
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`policy limit, provided more information about the insurance policy, and included a claims
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`release. Id.
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`On December 6, 2012, GEICO learned that Willoughby retained Swope, Rodante
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`P.A. (SRPA) as counsel. JSUF ¶ 10; (Doc 127-10). The next day, GEICO’s field
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`representative went unannounced to SRPA’s office and received confirmation that SRPA
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`represented Willoughby. JSUF ¶ 10; (Doc. 127-11) at 1–2. On the same day, GEICO’s
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`claims adjuster mailed a $100,000 check, along with a claims release, to SRPA. JSUF ¶ 11;
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`(Doc. 127-12). A few days later, a SRPA attorney told GEICO that Willoughby had not
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`decided how he wanted to proceed. JSUF ¶ 12; (Doc. 127-13). Over the next six months,
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`GEICO sent letters to SRPA regarding Willoughby’s claims. JSUF ¶ 13; (Doc. 127-14)
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`at 44–52. Then, on June 20, 2013, SRPA returned the check to GEICO, rejected the offer,
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`and informed GEICO about Willoughby’s suit against the Ellisons. JSUF ¶ 14; (Doc.
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`127-15).
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`Willoughby sued Ellison for negligence and Ellison’s wife for vicarious liability
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`based on Ellison’s negligence. JSUF ¶¶ 15–16. Willoughby also sued his uninsured
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`motorist carrier for denying his claim for benefits. Id. ¶ 15. At the time, Willoughby “was
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`unwilling to settle his claims against the Ellisons on any terms, other than by entry of a
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`judgment for the full amount of his damages.” Id. In his claims against the Ellisons,
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`Willoughby alleged that he suffered “permanent bodily injury and resulting pain and
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`suffering, disability, disfigurement, mental anguish, loss of capacity for the enjoyment of
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`life, expense of hospitalization, medical and nursing care and treatment, and loss of
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`earnings and loss of ability to earn money.” (Doc. 127-15) at 5–6. GEICO provided
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`counsel to the Ellisons. JSUF ¶ 17; (Doc. 127-16). Although Willoughby did not seek
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`property damages in his complaint, his response to an interrogatory in August 2013
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`enumerated $230 in property damages. JSUF ¶ 18; (Doc. 127-17) at 6.
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`During mediation in February 2015, Willoughby settled his first-party bad faith
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`claim against his uninsured motorist carrier for $4 million. JSUF ¶ 19. Willoughby offered
`to settle his claims against the Ellisons for $150,000. Id. According to GEICO, this offer
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`included $50,000 in taxable costs. (Doc. 127-18) at 1. After discussing with Richard
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`Young, GEICO’s outside extracontractual attorney, GEICO concluded that its policy with
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`the Ellisons did not cover costs and, as a result, GEICO would not agree to pay them. Id.
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`GEICO thus considered the $150,000 settlement offer an excess demand. Id.
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`Brandon Cathey, Willoughby’s counsel, reiterated the $150,000 offer in a March
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`2015 email to the Ellisons’ counsel Douglas Wight. JSUF ¶ 20a; (Doc. 127-19) at 1.
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`Cathey wrote that Willoughby “would still prefer to settle all of [his] claims against the
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`Ellisons within their policy limit with GEICO.” (Doc. 127-19) at 1. Cathey wrote that,
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`“[i]n exchange for payment in the amount of $150,000, Randy Willoughby will sign a
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`general release of all his claims against the Ellisons arising from the collision on November
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`2, 2012, including all claims for taxable costs and attorneys fees.” Id. Wight responded that
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`he would take the offer to GEICO and the Ellisons, but that GEICO was not willing to
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`offer above the policy limits and the Ellisons were unable to offer any money on their own.
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`JSUF¶ 20b; (Doc. 127-19) at 2. In reply, Cathey mentioned authority “supporting the idea
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`that Geico covers taxable costs and other types of damages against your clients in addition
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`to the 100k limit.” JSUF ¶ 20c; (Doc. 127-19) at 3.
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`Wight forwarded this information to the Ellisons and informed them that
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`Willoughby was interested in receiving a counteroffer of “somewhere between your policy
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`limits of $100,000.00 and [his] $150,000.00 demand.” JSUF ¶ 20d; (Doc. 127-19) at 20.
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`In conversation with a GEICO supervisor Kirsten Tabile, Wight opined that a counter of
`$125,000 would settle the case. JSUF ¶ 20e; (Doc. 127-20) at 1. Tabile wrote in an email
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`that the $25,000 “would be [extracontractual] money” because she believed that GEICO’s
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`policy did not cover costs. Id.
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`Later in March 2015, Cathey followed up with another email indicating a
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`willingness to settle and acknowledging that there were good arguments on both sides as
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`to whether GEICO owed taxable costs under the policy. JSUF¶ 20f; (Doc. 127-19) at 6.
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`At the same time, Cathey argued that given the authority cutting in Willoughby’s favor,
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`GEICO “could owe as much as $150,000.” (Doc. 127-19) at 6 (emphasis in the original).
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`Cathey told Wight that Willoughby would “settle for less,” but that they needed “some
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`kind of offer from Geico to acknowledge it owes something more than $100,000.” Id.
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`“Geico can even start by offering $100,000 plus $200 if it wants,” Cathey said, “just please
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`get them to offer SOMETHING so we can get this settled!” Id. Wight forwarded this
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`communication to Prendes, the primary adjuster, and Wight later informed Cathey that
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`GEICO employees planned to meet to discuss the settlement on April 16, 2015. JSUF
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`¶ 20g, 20h; (Doc. 127-19) at 9; (Doc. 127-21) at 1. Cathey responded that if GEICO “can
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`offer something over the $100,000, [he] guarantee[d that] we can settle this case.” JSUF
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`¶ 20i; (Doc. 127-19) at 10.
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`At the April 16 meeting, though, GEICO employees consulted with attorney
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`Young, who opined that the policy did not cover taxable costs. JSUF ¶ 21; (Doc. 127-22)
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`at 1–2. As a result, GEICO decided not to counteroffer anything over the $100,000 bodily
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`injury limit and GEICO’s claim examiner, Dan Anthony, informed Wight of that the next
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`day. JSUF ¶ 22; (Doc. 127-23); see Jones Dep. (Doc. 120-1) at 127:18–23 (agreeing that
`the decision to reject the settlement offer was “on the basis that the GEICO policy
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`applicable to this claim does not cover court costs charged against the insured”). Wight
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`then informed Cathey that GEICO “will not offer anything above the $100,000.00 bodily
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`injury limit that was previously offered.” (Doc. 127-19) at 14. Therefore, Wight said,
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`because the Ellisons were not able to pay anything, if Willoughby is “unwilling to accept
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`their $100,000.00 bodily injury limits, then it appears that we will need to proceed with
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`litigation.” Id. Cathey concurred because the “line Geico has drawn at $100,000—when
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`other parts of the policy provide benefits that could be used to settle this case—is a decision
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`Geico is obviously going to stick to regardless of the consequences to [the Ellisons].” Id. at
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`15.
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`Over the next few months, attorneys for the Ellisons sent GEICO copies of Florida
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`decisions—one of which, New Hampshire Indemnity Company v. Gray, 177 So. 3d 56
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`(Fla. 1st DCA 2015), concerned a policy with “virtually identical” language—that
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`concluded the insurer was responsible for litigation costs. JSUF ¶ 24; (Doc. 127-24); (Doc.
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`127-25). GEICO responded that Gray contradicted Steele v. Kinsey, 801 So. 2d 297 (Fla.
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`2d DCA 2001), a decision of the Second District Court of Appeal, which controlled here
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`because Willoughby’s case arose in Florida’s Second District. JSUF ¶ 24; (Doc. 127-26).
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`Two years later, in 2017, the Florida Supreme Court disapproved Steele and held that a
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`materially identical policy provision “must be construed to provide coverage for the costs
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`and attorneys’ fees.” Gov’t Emps. Ins. Co. v. Macedo, 228 So. 3d 1111, 1115 (Fla. 2017).
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`Back in July 2015, Wight, with GEICO’s approval, stipulated to a damages-only
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`trial. JSUF ¶ 25; (Doc. 127-27). Under the stipulation, the jury would be asked to
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`determine the amount of damages sustained by Willoughby for:
`medical expenses incurred in the past; medical expenses to be incurred in
`the future; lost earnings incurred in the past; loss of earning capacity in
`the future; property damage incurred in the past; pain, suffering,
`disability, physical
`impairment, disfigurement, mental anguish,
`inconvenience, aggravation of a disease or physical defect, and loss of
`capacity for the enjoyment of life sustained in the past; and pain,
`suffering, disability, physical impairment, disfigurement, mental anguish,
`inconvenience, aggravation of a disease or physical defect, and loss of
`capacity for the enjoyment of life to be sustained in the future.
`(Doc. 127-27) at 1–2.
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`In August 2015, Cathey sent Wight a proposed stipulation for entry of final
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`judgment for $5,000,000, “which was itemized by past and future medical expenses, past
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`and future loss of earnings, property damage, and past and future pain and suffering.” JSUF
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`¶ 26; (Doc. 127-28). Willoughby served proposals in October 2015 for settlement on the
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`Ellisons, which included the same terms as the August proposed stipulated judgment.
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`JSUF ¶ 26; (Doc. 127-29). Prendes, the GEICO adjuster, advised the Ellisons that they
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`may be personally liable for a judgment in excess of the policy limits and that if they did
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`not accept the proposals for settlement and a jury verdict exceeded the offer by 25%, then
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`they would be responsible for attorney’s fees and costs. JSUF ¶ 27; (Doc. 127-30).
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`A year later, in response to a September 2016 offer of a $5 million consent judgment,
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`the Ellisons indicated that they wished to accept the offer. JSUF ¶ 28; (Doc. 127-31) at
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`1–5; (Doc. 127-32) at 1. GEICO informed a new attorney for the Ellisons, James
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`Thompson, that GEICO would “not agree to waive policy defenses of lack of cooperation
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`and voluntary payment.” (Doc. 127-32) at 1. GEICO maintained this position even if after
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`the Ellisons and Willoughby “conditionally agreed to a stipulated judgment in the amount
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`of $4.8 million, subject to GEICO waiving any policy defense relating to the signing of
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`the stipulation.” JSUF ¶¶ 29–30; (Doc. 127-33) at 2; (Doc. 127-34) at 1.
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`Eventually, in March 2017, Cathey offered to settle with Eddie Ellison “in exchange
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`for payment of the $100,000 per person bodily injury liability insurance limit.” (Doc. 127-
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`35) at 2; see JSUF ¶ 31. GEICO accepted this offer and Mr. Ellison was dropped as a
`party from the underlying action. JSUF ¶ 32; (Doc. 127-36). Cathey then offered entry of
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`a judgment in the amount of $4.8 million against Mrs. Ellison. JSUF ¶ 34; (Doc. 127-37)
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`at 1. Cathey argued that GEICO needed to agree only that Mrs. Ellison “will not be
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`breaching her insurance policy now by protecting herself with this agreement.” Id.
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`GEICO, though, remained steadfast in its opposition to a consent judgment in excess of
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`the policy limits, informing the parties that GEICO may seek a declaration that Ellison
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`breached the policy if she signed the proposed stipulation and consent judgment. JSUF
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`¶ 35; (Doc. 127-38) at 1.
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`In December 2018, Willoughby for the first time offered to settle his property
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`damage claim on its own. JSUF ¶ 36; (Doc. 127-39). GEICO agreed and paid $299.22 in
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`property damages before trial. JSUF ¶ 37. As a result, Willoughby signed a release of his
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`property damage claim against Mrs. Ellison. (Doc. 127-40).
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`Before trial, in February 2019, Cathey again offered the stipulated $4.8 million
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`dollar consent judgment. JSUF ¶ 38; (Doc. 127-41) at 1. GEICO responded that its
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`position was unchanged and that “in the event [the Ellisons] enter into a consent judgment
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`or stipulation with the plaintiff, GEICO specifically reserves its rights to assert all available
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`policy defenses for the unauthorized execution of any such agreement.” JSUF ¶ 38; (Doc.
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`127-42) at 2.
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`After a jury trial, final judgment was entered against Mrs. Ellison for $30,148,619.
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`JSUF ¶ 39; (Doc. 127-44) at 1. Because Mrs. Ellison failed to accept the pre-trial proposal
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`for settlement, Willoughby was entitled to attorney’s fees and costs, which GEICO paid
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`in the amount of $400,000. JSUF ¶ 39; (Doc. 127-45).
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`Willoughby later initiated this bad-faith action, which GEICO removed to federal
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`court. (Docs. 1, 1-1). GEICO’s motion for summary judgment (Doc. 128) is ripe for
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`resolution.
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`II. LEGAL STANDARD
`Summary judgment is appropriate if no genuine dispute of material fact exists, and
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`the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a). A fact
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`is material if it might affect the outcome of the suit under governing law. See Anderson v.
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`Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
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`e movant always bears the initial burden of informing the district court of the
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`basis for its motion and identifying those parts of the record that demonstrate an absence
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`of a genuine issue of material fact. See Clark v. Coats & Clark, Inc., 929 F.2d 604, 608
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`(11th Cir. 1991). When that burden is met, the burden shifts to the nonmovant to present
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`evidentiary materials (e.g., affidavits, depositions, exhibits, etc.) demonstrating that there
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`is a genuine issue of material fact, which precludes summary judgment. Id. A moving party
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`is entitled to summary judgment if the nonmoving party “fail[s] to make a sufficient
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`showing on an essential element of her case with respect to which she has the burden of
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`proof.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). e Court reviews the record
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`evidence as identified by the parties and draws all legitimate inferences in the nonmoving
`party’s favor. See Sconiers v. Lockhart, 946 F.3d 1256, 1262 (11th Cir. 2020); FED. R.
`CIV. P. 56(c)(3).
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`III. ANALYSIS
`Florida law governs this bad faith insurance case. Mesa v. Clarendon Nat. Ins. Co.,
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`799 F.3d 1353, 1358 (11th Cir. 2015) (per curiam). “The third-party bad faith cause of
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`action permits the insured or the injured third party to sue an insurer for failing to settle
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`within the policy limits.” Fridman v. Safeco Ins. Co. of Ill., 185 So. 3d 1214, 1220 (Fla.
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`2016). When defending claims against its insured, an insurer in Florida “has a duty to use
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`the same degree of care and diligence as a person of ordinary care and prudence should
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`exercise in the management of his own business.” Bos. Old Colony Ins. Co. v. Gutierrez,
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`386 So. 2d 783, 785 (Fla. 1980) (per curiam). The insurer must make defense “decisions
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`in good faith and with due regard for the interests of the insured.” Id.
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`The good faith duty of an insurance company includes advising “the insured of
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`settlement opportunities” and “the probable outcome of the litigation,” as well as warning
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`about “the possibility of an excess judgment” and informing “the insured of any steps he
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`might take to avoid same.” Id. “The insurer must investigate the facts, give fair
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`consideration to a settlement offer that is not unreasonable under the facts, and settle, if
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`possible, where a reasonably prudent person, faced with the prospect of paying the total
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`recovery, would do so.” Id. But the good faith duty does not obligate an insurer to offer to
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`settle for more than the policy limits. See, e.g., Kropilak v. 21st Century Ins. Co., 806 F.3d
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`1062, 1067 (11th Cir. 2015) (“Under Florida law, an insurer has a duty to defend its insured
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`against any claim and alleged facts within the terms of the policy and to indemnify the
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`insured up to the limits of the policy.”).
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`“[T]he question of whether an insurer has acted in bad faith in handling claims
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`against the insured is determined under the ‘totality of the circumstances’ standard.” Berges
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`v. Infinity Ins. Co., 896 So. 2d 665, 680 (Fla. 2004). Negligence is “relevant to the question
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`of good faith,” Bos. Old Colony, 386 So. 2d at 785, but negligence on its own is insufficient
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`to demonstrate bad faith, see Campbell v. Gov’t Emps. Ins. Co., 306 So. 2d 525, 530 (Fla.
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`1974) (explaining that the standard is bad faith, not negligence). The focus of bad faith
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`centers on the insurance company, but also relevant is a claimant’s actions. Pelaez v. Gov’t
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`Emps. Ins. Co., 13 F.4th 1243, 1254 (11th Cir. 2021) (concluding that it is proper to factor
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`“a claimant’s actions into the totality of the circumstances analysis”). Ordinarily, “[t]he
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`question of failure to act in good faith with due regard for the interests of the insured is for
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`the jury.” Bos. Old Colony, 386 So. 2d at 785; see, e.g., Ilias v. USAA Gen. Indem. Co.,
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`61 F.4th 1338, 1350 (11th Cir. 2023) (reversing grant of summary judgment to insurer).
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`Along with proving bad faith, the plaintiff must prove that the claimed damages are “caused
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`by the bad faith.” Perera v. U.S. Fid. & Guar. Co., 35 So. 3d 893, 901 (Fla. 2010).
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`GEICO argues that it is entitled to judgment as a matter of law because no
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`reasonable jury could find that GEICO acted in bad faith in handling Willoughby’s claim
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`and causing the excess judgment. See generally MSJ. Willoughby responds that a
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`reasonable jury could find that GEICO acted in bad faith in (1) failing to settle
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`Willoughby’s claims within the policy limits and (2) prohibiting Mrs. Ellison from
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`stipulating to a $4.8 million consent judgment. Resp. (Doc. 143) at 10–20.
`A. GEICO’s Failure to Settle Willoughby’s Claims in 2015
`Willoughby’s first argument arises out of GEICO’s handling of settlement
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`negotiations in March and April 2015. In early March, Cathey made the following offer:
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`“In exchange for payment in the amount of $150,000, Randy Willoughby will sign a
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`general release of all his claims against the Ellisons arising from the collision on November
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`2, 2012, including all claims for taxable costs and attorneys fees.” (Doc. 127-19) at 1.
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`Cathey later indicated that Willoughby would settle for less than $150,000, but he needed
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`“some kind of offer from Geico to acknowledge it owes something more than $100,000.”
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`Id. at 6. GEICO, Cathey wrote, could even start by “offering $100,000 plus $200 if it
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`wants.” Id. In a subsequent message to the Ellisons’ counsel, Cathey “guarantee[d that] we
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`can settle this case” if “Geico can offer something over the $100,000.” Id. at 10. GEICO,
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`though, rejected any attempt to settle the case for over the $100,000 bodily injury limit
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`even though it recognized that Cathey may have been seeking “an amount as little as $200”
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`above the $100,000 policy limit. (Doc. 127-23) at 1. Because of GEICO’s rejection, the
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`litigation proceeded.
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`14
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`Case 8:23-cv-01260-KKM-NHA Document 162 Filed 03/31/25 Page 15 of 35 PageID
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`Willoughby argues that a reasonable jury could conclude that GEICO breached its
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`duty to “settle, if possible, where a reasonably prudent person, faced with the prospect of
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`paying the total recovery, would do so.” Bos. Old Colony, 386 So. 2d at 785. GEICO
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`contends that Willoughby’s offer exceeded the $100,000 policy limit for bodily injury and
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`that “an insurer cannot be found to have acted in bad faith where the insurer had no
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`opportunity to settle the claim within the policy limits.” MSJ at 13. The parties’
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`disagreement stems from the extent of GEICO’s coverage. Willoughby argues that there
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`were four sources of coverage available to GEICO: the bodily injury policy limit; the
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`provision that provides coverage for “[a]ll reasonable costs incurred by an insured at
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`[GEICO’s] request”; the property damage policy limit; and the provision that provides
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`coverage for “[c]osts incurred by an[y] insured for first aid to others at the time of an
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`accident involving an owned auto.” Resp. at 2–7. GEICO argues only that the $100,000
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`bodily injury limit applied at the time of the parties’ 2015 negotiations. MSJ at 9–13. Thus,
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`the question for the purposes of summary judgment is whether a reasonable jury could
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`conclude that, under the “totality of the circumstances,” GEICO acted in bad faith in
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`refusing to settle out of the belief that Willoughby’s offer exceeded the applicable policy
`limit. Berges, 896 So. 2d at 680.
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`15
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`Case 8:23-cv-01260-KKM-NHA Document 162 Filed 03/31/25 Page 16 of 35 PageID
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`1. Taxable Costs
`Starting with the provision concerning reasonable costs “incurred by an insurer at
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`[GEICO’s] request,” when Cathey offered in March 2015 to settle the claim for $150,000,
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`he mentioned authority supporting the proposition that this provision covered taxable
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`costs. JSUF ¶ 20c, 20f; see Fla. Ins. Guar. Ass’n, Inc. v. Johnson, 654 So. 2d 239, 240 (Fla.
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`4th DCA 1995) (concluding that costs are covered by a policy provision that provides the
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`insurer will pay “[o]ther reasonable expenses incurred at our request” (alteration in the
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`original) (emphasis removed)). In Florida’s Second District, though, where the underlying
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`tort case was litigated, the District Court of Appeal had interpreted the same provision to
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`mean only that “the insurer intended to pay for expenses that it had authorized and over
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`which it had control, such as the selection of a service or product of known value and cost.”
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`Steele v. Kinsey, 801 So. 2d 297, 299 (Fla. 2d DCA 2001). The insurer is not obligated
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`under this provision, the Second District Court of Appeal concluded, to cover “further
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`litigation expense” that follows the rejection of a settlement offer, including “any fees and
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`costs” to which the plaintiff may be entitled under a fee-shifting statute. Id. at 299–300.
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`Steele was binding precedent in the Second District when the parties negotiated in
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`2015. See Pardo v. State, 596 So. 2d 665, 667 (Fla. 1992) (“[I]f the district court of the
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`district in which the trial court is located has decided the issue, the trial court is bound to
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`follow it.” (quoting State v. Hayes, 333 So. 2d 51, 53 (Fla. 4th DCA 1976))). Based on
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`16
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`Case 8:23-cv-01260-KKM-NHA Document 162 Filed 03/31/25 Page 17 of 35 PageID
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`Steele, GEICO argues that it did not act in bad faith in concluding that it was not obligated
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`to cover taxable costs. MSJ at 12. The question is whether a reasonable jury could conclude
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`that GEICO acted in bad faith notwithstanding Steele.
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`The answer is “no.” A reasonable jury could not find that an insurance company
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`acted in bad faith for following the law. To avoid that (what should be) obvious conclusion,
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`Willoughby argues that Steele did not control because Steele concerned attorney’s fees, not
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`taxable costs. Resp. at 15; (Doc. 143-17) at 4 (trial court denying Steele’s motion for
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`attorney’s fees). Therefore, regarding costs, Willoughby argues that the Fourth District’s
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`decision in Johnson controlled the trial court in this case. Resp. at 15; see Pardo, 596 So. 2d
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`at 666 (“The proper hierarchy of decisional holdings would demand that in the event the
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`only case on point on a district level is from a district other than the one in which the trial
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`court is located, the trial court be required to follow that decision.” (quoting Hayes, 333
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`So. 2d at 53)).
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`Although the ultimate judgment in Steele concerned attorney’s fees, Steele’s
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`reasoning was not dependent on some characteristic unique to attorney’s fees but was
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`instead the product of the policy language. See 801 So. 2d at 300 (“The words at issue here,
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`‘reasonable expenses incurred at our request,’ can only mean that the insurer must request
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`the product or service that incurs the expense.”). Nearly identical language appeared in the
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`Ellisons’ insurance policy, and there is nothing in Steele to suggest that the Second District
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`17
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`Case 8:23-cv-01260-KKM-NHA Document 162 Filed 03/31/25 Page 18 of 35 PageID
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`would reach a different decision as to taxable costs. Cf. Leocal v. Ashcroft, 543 U.S. 1, 11
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`n.8 (2004) (emphasizing the importance of interpreting a statute consistently); Ramos v.
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`Louisiana, 590 U.S. 83, 104 (2020) (“It is usually a judicial decision’s reasoning—its ratio
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`decidendi—that allows it to have life and effect in the disposition of future cases.”). Indeed,
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`although in a different context, the Second District applied the holding of Steele to a claim
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`for attorney’s fees and costs. See Fla. Ins. Guar. Ass’n, Inc. v. All The Way With Bill
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`Vernay, Inc., 864 So. 2d 1126, 1130 (Fla. 2d DCA 2003) (“[U]nder the plain language of
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`[the] policies and the holding of Steele, the attorney’s fees and costs incurred by [the
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`insured] in defending the underlying action are not ‘within the coverage of’ the insurance
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`policies.”).
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`As a result, GEICO was perfectly justified in concluding, at the time of the 2015
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`negotiations, that Steele governed and that the policy did not obligate it to pay taxable
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`costs. See Eres v. Progressive Am. Ins. Co., 998 F.3d 1273, 1280 (11th Cir. 2021)
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`(focusing on the state of the law at the time the insurer acted in evaluating the insurer’s
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`actions). An insurer “has a right to deny claims that it in good faith believes are not owed
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`on a policy,” Vest v. Travelers Ins. Co., 753 So. 2d 1270, 1275 (Fla. 2000), and a reasonable
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`jury could not conclude that GEICO acted in bad faith in the light of Steele.
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`Despite Steele, Willoughby contends that a reasonable jury could still find bad faith
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`based on the “totality of the circumstances.” Resp. at 14–16. Willoughby relies on State
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`18
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`Case 8:23-cv-01260-KKM-NHA Document 162 Filed 03/31/25 Page 19 of 35 PageID
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`Farm Mutual Automobile Insurance Co. v. Laforet, where the Florida Supreme Court
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`enumerated factors a jury must consider in evaluating an insurer’s handling of a coverage
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`dispute. 658 So. 2d 55, 62–63 (Fla. 1995). Willoughby fails to point to a single case,
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`though, where a court has held that a reasonable jury could find that an insurer acted in
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`bad faith based on a coverage dispute concerning policy language that had already been
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`interpreted by the relevant appellate court in the insurer’s favor. Willoughby faults GEICO
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`for failing to “make any effort to promptly resolve the coverage dispute,” performing “no
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`investigation into whether the taxable costs were owed beyond the off-the-cuff advice
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`received from Young,” and failing to “attempt to settle the claim for a compromised sum
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`or reach a conditional settlement contingent upon a future coverage determination.” Resp.
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`at 15. But none of these criticisms change the outcome in the light of Steele, and thus a
`reasonable jury could not find bad faith in these circumstances in 2015.
`2. Property Damages
`Willoughby’s next argument is predicated on GEICO’s coverage of property
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`damage. Although a close question, a reasonable jury could conclude that, in the light of
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`the property damage provision of the policy and Willoughby’s response to an interrogatory,
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`GEICO acted in bad faith in handling settlement negotiations. Therefore, summary
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`judgment is unwarranted on this theory.
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`19
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`Case 8:23-cv-01260-KKM-NHA Document 162 Filed 03/31/25 Page 20 of 35 PageID
`7859
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`When the parties negotiated in March and April 2015, GEICO was on notice that
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`Willoughby claimed $230 in property damages. (Doc. 127-17) at 6 (Willoughby’s
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`interrogatory answers); Jones Dep. at 49:14–50:18 (testifying that GEICO received in
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`September 2013 Willoughby’s answers to interrogatories in which Willoughby enumerated
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`$230 in property damages). The release form GEICO sent to Willoughby covered “any
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`and all claims, demands, damages, actions, causes of action, or suits of any kind or nature
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`whatsoever, on account of all injuries and damages, known and unknown, which have
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`resulted or may in the future develop as a consequence of [the auto accident at issue].”
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`(Doc. 127-19) at 4. Thus, by agreeing to settle, Willoughby would be discharging the
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`Ellisons from responsibility for the property damages requested. Yet GEICO, even when
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`Willoughby sought anything over $100,000—even “$200”—never included any money in
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`a settlement offer from the property damage portion of the policy. As a result, GEICO is
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`not entitled to summary judgment on this record.
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`Taking the facts in the light most favorable to Willoughby, GEICO could have
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`known that its policy covered Willoughby’s claimed property damages and Cathey’s
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`representations present a question of fact as to whether an offer above $100,000 could have
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`settled the case and whether GEICO’s failure to do so caused the ultimate excess judgment.
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`A “reasonably prudent person, faced with the prospect of paying the total recovery,” might
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`have responded with a settlement offer worth the combined amount of the bodily injury
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`20
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`Case 8:23-cv-01260-KKM-NHA Document 162 Filed 03/31/25 Page 21 of 35 Page
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