Give Them A Chance to Settle

Often times when a Plaintiff’s counsel extends an offer to settle a personal injury claim to an insurance company they do so by including a demand that said offer be accepted within a very short time frame. This practice, if attempting to preserve a bad faith claim, may not be best.

Florida’s bad faith jury instruction provides that “an insurance company acts in bad faith in failing to settle a claim when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward the insured (policyholder) and with due regard for his/her best interests”. Florida courts have continually held that in order to meet the definition of “could have” the plaintiff’s counsel must allow sufficient time for the insurer to investigate the facts of the claim and evaluate the offer. See Powell v. Prudential Property and Casualty Ins. Co., 584 So.2d 12 (Fla. 3rd DCA 1991).

The line of decisions, including the Powell case establish that if the plaintiff does not provide the sufficient time they may be precluded from a finding of bad faith because the insurer could not have settled the claim so quickly. Case law further addresses what is believed to be “reasonable” in terms of a plaintiff imposed time limit but ultimately the decision is made on a case by cases basis and turns of the facts of each case.

Typically a brief 10 day time limit will not be upheld as a “reasonable” amount of time to preserve a bad faith claim and some holdings have even gone as far as ruling that a short 10 day time limit is “presumptively unreasonable.” See Green v. Omni Ins. Co., 3:00cv77/RV (N.D. Jan 11, 2001). Thus, if a plaintiff is trying to preserve a bad faith claim they should give the defense a chance to settle. Not only may the case settle and bring resolution to the party but if rejected may open the door for a bad faith claim.