Recently, Florida’s Fourth District Court of Appeals reversed a First Party Bad Faith verdict and judgment. In United Automobile Insurance Company v. Colon, Ms. Colon sued her PIP insurer for bad faith claims handling in failing to pay her doctors under her PIP policy. Although she disclaimed any non-economic damages for emotional distress, the insured claimed that the carrier’s failure to pay PIP benefits caused her problems with doctors who refused to compromise the amount of her bills or render further medical services. However, the insured offered no particular amount of damages related to the problems she had with her providers. The jury returned a general verdict for bad faith damages of $60,000.
The 4th DCA noted that "[i]t has long been accepted in Florida that a party claiming economic losses must produce evidence justifying a definite amount…. Economic damages may not be founded on jury speculation or guesswork and must rest on some reasonable factual basis." The DCA then held that: "As the background shows, plaintiff offered no evidence on which to justify any amount of economic damages resulting from the carrier’s bad faith conduct. Because of the lack of such evidence, the carrier is entitled to judgment in its favor on plaintiff’s claim for bad faith damages."
While I don’t know from the facts of this case whether the plaintiff could have done so, this case points out the necessity to prove up economic damages in a first party bad faith case. Economic damages in a case such as Colon might include impairment of credit which can be proved up by expert testimony. A plaintiff in a first party bad faith action may also be entitled to non-economic damages, even in the absence of economic damages.
The insurance company’s agent is a fiduciary to the insured. An insured pursuing a first party bad faith claim should always evaluate the propriety of adding a claim for the agent’s breach of fiduciary duty. The elements of a claim for breach of fiduciary duty are: the existence of a fiduciary duty, and the breach of that duty such that it is the proximate cause of the plaintiff’s damages. In Gracey v. Eaker, 837 So. 2d 348, 353 (Fla. 2002)., the Florida Supreme Court held that the victim of a breach of fiduciary duty is entitled to non-economic damages, even in the absence of economic damages.