Prompt Offer of Policy Limits is Good Faith Claims Handling

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After a serious auto vs. motorcycle the auto’s insurer promptly offered to settle a bodily injury claim for the $50,000 policy limits within weeks of the accident. Pointing to overbroad language in a suggested release form, which the insurer made clear it was willing to modify, the claimant rejected the offer and insisted on a trial. After a stipulated judgment of $14,900,000 the plaintiffs sought to enforce the judgment against the insurer. In Raul A. Pelaez, as Limited Guardian of the Person and Property of John Poul Pelaez, ward, and Michael Adam Conlon, Jr. v. Government Employees Insurance Company, No. 20-12053, United States Court of Appeals, Eleventh Circuit (September 20, 2021) the Eleventh Circuit determined that good faith claims handling resolves claims of the tort of bad faith.

ZALMA OPINION

This is a clear case of abuse of the tort of bad faith by a plaintiff and the plaintiff’s lawyer who attempted to create a bad faith action by claiming he was not acting for his client but for the world of people with claims against GEICO insureds. GEICO did everything it could to protect its insured, delivered a check for its full limits less than a month after the accident and offered to pay the property damage after counsel let GEICO see the damaged motorcycle, was an act of bad faith. Because of the conduct of counsel GEICO paid to defend its insured and was obviously damaged by the bad faith conduct of the plaintiff and its counsel. Such conduct should be punished but the tort of bad faith only goes in one direction.