Lopez v. Geico Cas. Co.

968 F.Supp.2d 1202

Carmen LOPEZ, individually and as husband and wife, and Nelson Lopez, individually and as husband and wife, Plaintiffs,

v.GEICO CASUALTY COMPANY, Defendant.

Case No. 13–80650–CIV.

United States District Court, S.D. Florida.

Sept. 5, 2013.

David Knight, Steinger, Iscoe & Greene, P.A., West Palm Beach, FL, for Plaintiffs.

Francis Augustine Zacherl, III, Ellen Novoseletsky, Shutts & Bowen LLP, Miami, FL, for Defendant.

ORDER GRANTING MOTION TO DISMISS

KENNETH L. RYSKAMP, District Judge.

THIS CAUSE comes before the Court pursuant to Defendant Geico Casualty Company's (“Geico”) motion to dismiss, filed July 10, 2013 [DE 4]. Plaintiff Carmen Lopez (“Lopez”) responded on July 29, 2013 [DE 7].¹ Geico replied August 9, 2013 [DE 11]. This motion is ripe for adjudication.

I. BACKGROUND

This action relates to an April 13, 2004 car accident that occurred in Palm Beach County. On that date, Arumadura de Zoysa (“de Zoysa”) negligently operated a motor vehicle such that he caused his vehicle to come into contact with Lopez's vehicle. At the time of the accident, Lopez had in effect an underinsured motorist policy through Geico. The policy provided for a total limit of underinsured motorist coverage in the amount of $30,000.00. de Zoysa was an uninsured motorist as defined by the policy.

Prior to January 13, 2005, Lopez demanded settlement of the underinsured motorist claim for $30,000.00. On January 13, 2005, Geico rejected that demand and offered Lopez $10,000.00 to resolve the claim. On January 25, 2004, Lopez again demanded $30,000.00 to resolve the claim. On February 10, 2005, Lopez filed a Civil Remedy Notice (“CRN”) pursuant to Fl. Stat. § 624.155. On July 11, 2005, Geico offered $15,000.00 in settlement of the claim.

Lopez filed suit in the Circuit Court of the Fifteenth Judicial Circuit, in and for Palm Beach County, on June 28, 2005, asserting claims of negligence and loss of consortium against de Zoysa and counts for underinsured motorist benefits and loss of consortium against Geico. On February 5, 2008, a stipulated final judgment was entered in Lopez's favor against de Zoysa. On April 4, 2008, a jury returned a verdict in favor of Lopez in the amount of $332,175.96. Final judgment was entered against Geico on May 29, 2008. The final judgment set the total amount of damages at the amount of $284,191.72 and ordered that Lopez would recover $30,000.00 in damages and $33,990.61 in costs. ²

On April 16, 2008, Geico moved for a new trial. Geico's motion for new trial was denied on June 4, 2008.

On August 4, 2008, Lopez moved to amend her complaint to add a count for insurer bad faith. The motion to amend was granted on October 22, 2008.

On October 22, 2012, Geico moved to supplement its affirmative defenses to include,inter alia, a defense based on lack of jurisdiction to entertain Lopez's bad faith claim—or any other claim. The motion was granted on November 7, 2012.

Geico moved for judgment on the pleadings on January 3, 2013. On April 26, 2013, the state court ruled that it lacked jurisdiction to consider Lopez's bad faith claim because it lost subject matter jurisdiction over the matter upon entry of the final judgment and the denial of the motion for new trial.

Lopez filed the underlying common law and statutory bad faith action in Palm Beach County Circuit Court on May 10, 2013, alleging that Geico failed to settle her claim for policy limits when it could and should have done so, failed to employ fair settlement practices, failed to use ordinary care and diligence in the handling of her claim and failed to exercise the utmost good faith in the resolution of her claim. Geico removed this action to this court on June 28, 2013 pursuant to 28 U.S.C. §§ 1441(a) and 1446. Geico now moves to dismiss this action with prejudice, arguing both expiration of the statute of limitations and the presence of a defect in the CRN.

II. LEGAL STANDARD

On a motion to dismiss, while the Court takes the plaintiff's allegations as true, “conclusory allegations, unwarranted factual deductions or legal conclusions masquerading as facts will not prevent dismissal.” Davila v. Delta Air Lines, Inc., 326 F.3d 1183, 1185 (11th Cir.2003) (citing South Florida Water Mgm't Dist. v. Montalvo, 84 F.3d 402, 406 (11th Cir.1996)). Plaintiff's obligation to provide the grounds for his entitlement to relief requires more than “labels and conclusions,” and a “formulaic recitation of the elements of a cause of action will not do.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964–65, 167 L.Ed.2d 929 (2007)). “The point is to ‘give the defendant fair notice of what the claim is and the grounds upon which it rests.’ ” Davis v. Coca–Cola Bottling Co., 516 F.3d 955, 974 (11th Cir.2008) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955) and finding allegations insufficient to meet Twombly standard. A complaint's factual allegations “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 545, 127 S.Ct. 1955. “Only a complaint that states a plausible claim for relief survives a motion to dismiss.” Ashcroft, 129 S.Ct. at 1950. A determination of whether a complaint states a plausible claim for relief requires the reviewing court “to draw on its judicial experience and common sense.” Id. When a plaintiff fails to plead factual content permitting the court to infer more than the mere possibility of misconduct, it has not “shown” entitlement to relief. Id. (quoting Fed.R.Civ.P. 8(a)(2)).

III. DISCUSSION

A. No cause of action for common law bad faith for failure to settle a claim for first party benefits exists.

Lopez brings her bad faith action pursuant to both Florida statutory and common law. Fl. Stat. § 624.155 provides that

[a]ny 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: ... Not attempting in good faith to settle claims when, under the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for his or her interests.Fl. Stat. § 624.155(1)(a), (b)(1). Although such an action may be brought pursuant to Fl. Stat. § 624.155, such an action may not be brought under the common law. Prior to the enactment of § 624.155, no common law cause of action existed for bad faith failure to settle a claim for first party benefits, such as claims for underinsured motorist benefits, disability benefits, or insurance benefits for property damage under a homeowner's policy. See QBE Ins. Corp. v. Chalfonte Condo. Apartment Assoc., Inc., 94 So.3d 541, 547 (Fla.2012) (“[T]here is no common law first-party bad-faith action in Florida.”). To the extent Lopez attempts to state a separate claim for common law bad faith, such a claim is dismissed with prejudice.

B. The statute of limitations bars the statutory bad faith claim.

A Fl. Stat. § 624.155 bad faith claim is “[a]n action founded on a statutory liability” and is therefore governed by the four year statute of limitations. SeeFl. Stat. § 95.11(3)(f); Coachmen Indus., Inc. v. Royal Surplus Lines Ins. Co., No. 3:06–cv–959–J–HTS, 2007 WL 1837842, at * 13 (M.D.Fla.2007) (four year statute of limitations applicable to statutory claims applied to statutory bad faith claim under Fl. Stat. § 624.155). A statute of limitations begins to run “from the time the cause of action accrues.” SeeFl. Stat. § 95.031. “A cause of action accrues when the last element constituting the cause of action occurs.” SeeFl. Stat. § 95.031(1). An action under Fl. Stat. § 624.155 for failure to settle an uninsured motorist claim accrues when there has been “a determination of the existence of liability on the part of the uninsured tortfeasor and the extent of the plaintiff's damages.” See Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So.2d 1289, 1291 (Fla.1991); Vest v. Travelers Ins. Co., 753 So.2d 1270, 1276 (Fla.2000) (“We continue to hold in accord with Blanchard that bringing a cause of action in court for violation of section 624.155(1)(b)(1) is premature until there is a determination of liability and extent of damages owed on the first-party insurance contract.”).

Here, the final determination as to liability and damages in the underlying uninsured motorist suit occurred on May 29, 2008, the date of the final judgment. See Romano v. Am. Cas. Co. of Reading, Pennsylvania, 834 F.2d 968, 970 n. 4 (11th Cir.1987) (for purposes of statute of limitations, an action for statutory bad faith accrues when the final judgment of damages in underlying case issues). This action was not filed until May 10, 2013, more than four years after it accrued.

Lopez does not dispute that she filed her complaint after the statute of limitations expired. Rather, she attempts to defeat Geico's statute of limitations defense based on theories of equitable estoppel and equitable tolling. Equitable tolling is unavailable outside of the administrative context, however. In HCA Health Servs. of Florida, Inc. v. Hillman, 906 So.2d 1094 (Fla. 2d DCA 2005), plaintiffs were nurses who initially filed a whistleblower action in federal court, erroneously believing that the defendant was a foreign corporation, and thus, that diversity jurisdiction existed. See id. at 1096. The federal action was dismissed based on lack of subject matter jurisdiction, and the plaintiffs re-filed the action in state court. See id. By that time, however, the statute of limitations had run. See id. Defendants moved to dismiss based on a statute of limitations defense, but plaintiffs successfully argued that the statute should be equitably tolled. See id. at 1098. The appellate court reversed, holding that there was no support for the proposition that equitable tolling of the statute of limitations applies outside of the administrative context. See id. The legislative intent...