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South Florida

South Florida has been a perennial Watch List or Judicial Hellholes jurisdiction, and this year is no different, except for the reasons behind its inclusion in the report. In years past, South Florida has been chastised for an easily manipulated Personal Injury Protection (PIP) law, excessive medical liability, and never-ending litigation against the tobacco industry. This year, “bad faith” lawsuits against insurers that act in good faith, and awards of damages for medical expenses far in excess of what a patient or her insurer actually paid move to the forefront. This excessive liability is felt by Florida residents in higher auto insurance rates, health insurance costs, and prices of goods and services. And transmitted from California, where they have become an epidemic that plagues small businesses, an outbreak of bogus disability-access lawsuits is beginning to spread in South Florida, too.


State laws provide rights to individuals if an insurer unreasonably delays or denies paying a valid claim. Insurers are under strict time constraints in which to investigate, process and pay any claim (regardless of complexity), or else they face the prospect of punishment through damages in what is called a “bad faith” lawsuit. Florida courts have repeatedly interpreted the state’s bad faith law in a manner that is highly favorably to plaintiffs.

Personal injury lawyers, especially in South Florida, have perfected ways of gaming the system to turn a $10,000 policy limit into a multi-million dollar payday. For example, they may ignore repeated calls and letters from an insurer attempting to settle, return an insurer’s check for a given policy’s limit, or deliberately provide few, if any, specifics on the claim or remedy sought, all to cause delays and create a pretense for bad faith litigation. In other cases they may send a letter demanding compliance with a multitude of arbitrary or unreasonable conditions, which delay the settlement process and provide a reason to reject a settlement tendered for the policy limits. Personal injury lawyers also have also been known to go into hiding and refuse to return phone calls or respond to inquiries from the insurer. That is because, in Florida, the responsibility to settle a claim is placed fully on the insurer. Florida courts have issued rulings that make it difficult for an insurer to know (1) who to contact with a settlement offer, (2) what to offer, and (3) how long the insurer has to make a fair offer.

For example, in a case from Palm Beach County last year, Goheagan v. American Vehicle Ins. Co., two judges of a three-member appellate panel allowed a bad faith claim to proceed against an insurer even when it had made extraordinary efforts to settle. In this case, the insurer, following an automobile accident, tried repeatedly to settle for the policy limits after the victim fell into a coma and died three months later. Soon after the accident, an insurance agent called the victim’s stepfather, a friend, and her mother four times, only to be told that the family had retained an attorney, but not the attorney’s contact information. The victim’s mother refused to talk with the insurer, telling the agent to call back or that she was not in a position to discuss the matter. The insurer was at a loss – to whom could it give the check? The victim was in a coma, her attorney was unknown, and the victim’s mother was not empowered to receive the payment on behalf of her 40-year-old daughter. To its credit, the trial court dis- missed the bad faith claim against the insurer, but the appellate court reversed. The two-judge majority found that, even considering the insurer’s efforts to settle, a jury could find that the insurer acted in bad faith.

Another Palm Beach case is the most recent illustration of Florida’s broken bad faith system. The claim arose after a drunk driver swerved into a man who was helping to fix a flat tire on the side of the road. Geico immedi- ately began settlement discussions with the victim’s family and, soon after, offered the full policy limits, $10,000 for personal injury, and an additional $1,425.29 for property damage. Her lawyer rejected Geico’s settlement offers and went to trial, securing a $16.6 million jury verdict against the drunk driver. It was one of the top 100 verdicts of the year. The lawyer then attempted to collect this amount from Geico through a bad faith lawsuit.

The bad faith lawsuit proceeded in federal court, rather than state court, because the plaintiff and the insurer resided in different states and because of the large amount of money at stake. And in light of state precedent like Goheagan, the insurer was lucky that it did.

The federal district court found no bad faith and the U.S. Court of Appeals for the Eleventh Circuit affirmed. “Even viewing the facts in the light most favorable to [the plaintiff], we find it hard to imagine how Geico acted in bad faith when it offered to pay everything it possibly could under the policy,” the Eleventh Circuit wrote. “[Plaintiff] – who declined every settlement offer Geico made, refused on multiple occasions to discuss settlement, delayed providing Geico information it needed to propose a settlement, never made a counteroffer, and never made a settlement proposals – now claims that she would have settled the entire case if Geico had simply offered her . . . $1,674.71 more in property damage,” a claim the court found “patently self-serving.”

The Eleventh Circuit perfectly understood Florida’s bad faith litigation problem. In a footnote, the court explained, “[Plaintiff ’s] behavior may be rational. [Plaintiff ] had a claim worth far more than the maximum amount Geico could pay in settlement. Still, one could expect [Plaintiff] to settle for that maximum amount and avoid the costs of litigation if she knew with relative certainty that [the drunk driver] was judgment proof. However, Florida’s third-party bad faith cause of action creates an incentive for a claimant in [Plaintiff ’s] situation to reject any proposed settlements and instead plan to proceed with a bad faith claim.”

The incentivized system to not settle has led to exorbitant insurance rates in Florida because all of the insurers have to pay the price. Additionally, even those plaintiffs’ attorneys who want to proceed in a respectable manner are in a difficult position. If an attorney accepts a tender offer of $10,000 and does not develop a basis to sue for bad faith, he or she could be exposed to a malpractice lawsuit for failing to secure a larger settlement.

Thus far, the Florida Legislature has not acted to address the out-of-control bad faith liability created by Florida court rulings. But in 2014 it will have an opportunity to enact a modest reform that will begin the process of curbing abuse. H.B. 187, introduced by Representative Kathleen Passidomo, would require claimants to provide an insurer with a written notice of loss. If the insurer provides an offer to settle for the greater of the requested amount or the policy limits within 45 days, then it has fulfilled its obligations and is not subject to a lawsuit for bad faith. This system would protect both the insured and the insurer. The insurance company would have adequate time to collect all of the facts and make a fair offer, while making sure that the insured would receive the necessary settlement in a timely fashion.


In personal injury cases, the largest element of economic damages is often medical expenses. Plaintiffs are generally entitled to recover the costs of past medical care already incurred, as well as the estimated costs of future medical care reasonably likely to be incurred, as a result of defendants’ negligence. However, awards of medical expenses are often significantly inflated, resulting in what have come to be known as “phantom damages.” In Florida, there are currently two main causes of these exorbitant damages.

The first cause of phantom damages arises from the difference between the amount billed by health care providers for medical services and the amount normally accepted as payment in full for those health care services.

In Florida, the jury only hears the billed rates. Florida law prohibits introduction of evidence regarding medical bills that have been discounted or written off by health care providers. As a result, if a physician charges $100,000 for the plaintiff ’s medical treatment, and the plaintiff ’s private insurer negotiates a discounted rate and pays $30,000 in full satisfaction of the bill, the jury is only allowed to see the original $100,000 bill. If the jury finds the defendant liable, then the jury will award $100,000 to the plaintiff for past medical expenses.

While a trial court judge will later “set off” (deduct) amounts not paid from the verdict, South Florida personal injury lawyers have developed a way to avoid such a reduction. They often enter a “Letter of Protection” with a client’s doctor, which is an agreement to defer payment of medical expenses until after a lawsuit results in a judgment. Since there is no amount “actually paid,” only the amount billed, the arrangement avoids a set off, leading to an excessive award.

It is also important to recognize that future medical expenses, which are often the most substantial part of damages in a personal injury suit, are drastically inflated in Florida, because juries calculate them based on a “sticker price” that no one pays.

Medically unnecessary procedures are a second cause of inflated medical damages. Thousands of fraudulent or unnecessary procedures are ordered in Florida every year. This occurs for the purpose of inflating the value of personal injury claims. Florida law requires plaintiffs to prove that their medical treatment is medically necessary. If a defendant presents evidence that the plaintiff ’s treatment was not medically necessary, however, Florida courts have held that such an argument is tantamount to accusing the plaintiff ’s treating physician of medical malpractice, entitling the plaintiff to a so-called “Stuart instruction.” A Stuart instruction directs the jury that if negligence is found, the defendant is liable for all of plaintiff ’s medical treatment, including any treatment necessitated by the negligence, mistake or lack of skill of the treating physician. As a result, health care providers are able to perform – and bill for – treatment that is not medically necessary. Defendants are forced to pay for medical treatment that was not caused by the defendant’s negligence, and plaintiffs are allowed to collect a windfall in phantom damages.

As with the state’s perverted bad faith law, the Florida Legislature also has a chance in its upcoming session to restrict opportunities for inflating medical damages. Proposed legislation, called “Truth in Damages,” would require that if medical expenses have already been paid, only evidence of the amount paid – not the amount billed – is admissible at trial. Recovery for unpaid and future medical expenses would be determined based on evidence of the amounts customarily accepted in payment for such services by providers in the area. The legislation also limits recovery of medical expenses to the costs incurred for medically necessary services resulting from the defendant’s negligence.


As reported in November 2013 by WPTV-TV News of West Palm Beach, nearly 2,000 disability-access complaints have been filed in the last three years against South Florida businesses, most of them small and owner-operated. For those who thought this particular strain of shameless legal extortion was confined to the decidedly anti-business jurisdictions of #1 Judicial Hellhole of California, think again.

Under the direction of sometimes interview-shy personal injury lawyers, serial plaintiffs in wheelchairs, such as Joe Houston and David Ramnarine, have each pursued scores of cases against locally owned restaurants and other mom-and-pop shops. The cookie-cutter nature of many of these complaints leads some targeted business owners to wonder if the plaintiffs ever actually visited their establishments.

Pete Roubekas, owner of the Farmer Girl Restaurant in Lake Worth, Florida, told WPTV, “All of a sudden I get these papers filed to me like I am a criminal.” Among other “really picky things,” he says, the complaint claimed his salad bar was two inches too high and the pavement within a disability-access parking spot was insufficiently level.

Before disability-access plaintiffs and their lawyers start to feel as welcome in Florida as they feel in California, perhaps Governor Rick Scott and lawmakers in Tallahassee should consider reasonable reforms to protect the Sunshine State’s small businesses.


As discussed in past Judicial Hellholes reports, a significant contributor to South Florida’s reputation for a poorly balanced civil justice system has been the state’s application of an anything-goes standard for admission of purported expert testimony known as the “Frye/Marsh test.” Under this standard, most of the testimony offered in Florida by so-called experts was subject to little or no judicial scrutiny. This allowed jurors to be misled by junk science in product liability, medical malpractice and other complex cases. But in 2013, after a seven-year effort, Florida lawmakers finally adopted the more rigorous approach followed in federal and most state courts, known as the Daubert standard. Now judges are taking a more active role in ensuring that the testimony offered by experts is based on sound science. Sources tell ATRA that Florida courts are uniformly applying the new standard, though the future remains uncertain. It is the practice of the Florida Supreme Court, which repeatedly refused to move to the Daubert standard, to approve or reject changes to the rules of evidence duly enacted by the legislature. In 2014 the Florida Bar is likely to issue a recommendation to the Florida Supreme Court as to how it should act. If the Court adheres to its limited role and respects the policy judgment of the legislature, it should uphold the law and firmly bring Florida’s law on expert testimony into the mainstream.