Macola v. Government Employees Insurance Company

Frances Quigley (plaintiff) negligently caused a vehicular accident, injuring Michelle Macola (plaintiff). Quigley was insured under $300,000 bodily injury liability policy through Government Employees Insurance Company (GEICO) (defendant). Macola offered to settle her claim against Quigley for the $300,000 policy limit, but GEICO rejected her offer. Macola then filed a personal-injury lawsuit against Quigley. While Macola’s action was pending, Quigley filed a civil remedy notice with both GEICO and the Florida Department of Insurance, alleging that GEICO had denied Macola’s settlement offer in bad faith. Within the 60-day statutory response window, GEICO tendered $300,000 to Quigley. Subsequently, the court in Macola’s personal-injury lawsuit entered a $1.54 million final judgment in Macola’s favor. Macola and Quigley then filed common-law third-party bad-faith claims against GEICO for the excess judgment, meaning the judgment in excess of the $300,000 policy limit. GEICO removed the action to federal court and countered, arguing the $300,000 payment precluded a common-law third-party bad-faith claim. The district court agreed and granted GEICO summary judgment. Macola and Quigley appealed, arguing that (1) GEICO’s tender of the $300,000 did not cure the bad-faith claim because of the excess judgment; and (2) even if the $300,000 cured the statutory bad-faith claim, it did not preclude a common-law bad-faith claim. The Eleventh Circuit certified a question to the Florida Supreme Court about whether an insurer tendering a payment to an insured before the entry of an excess judgment in a related tort lawsuit precluded a common-law bad-faith action against the insurer.