The family of a cyclist killed while riding on Miami’s dangerous Key Biscyane will finally get their chance at justice. Omar Otaola, a well known Miami cyclist, died tragically after being hit by a truck owned by Cusano’s Italian Bakery. He left behind a wife and two minor children.
His family collected a $1,000,000 insurance policy from Allstate for Cusano’s single limit coverage without having to sign a release. The settlement was approved by the probate court and the money was disbursed. Apparently, Cusano’s did not demand a release nor did it participate in the probate proceedings.
The family then sued Cusano’s for wrongful death, seeking an additional million from their excess insurance policy provided by AIG. Miami-Dade Circuit Court Judge Marc Schumacher dismissed the family’s Miami accidental death case and ordered them to either sign a complete release in favor of the Bakery or return their million dollar settlement.
After nearly 7 years of litigation, the Appellate Court reversed Judge Schumacher. It found that by simply accepting Allstate’s $1,000,000 policy, the family did not abandon its right to sue Cusano’s. First, because Cusano’s did not participate in the probate court proceedings and failed to demand a complete release. Instead, Cusano’s waited over two years to demand a release. Second, Cusano’s did not claim they had a “settlement” as an affirmative defense. Instead, it plead “accord and satisfaction,” even though it had not made any payment toward the claim.
Allstate did the correct thing by tendering the limits to the family. I am one of the first to criticize an insurance company; but in this case Allstate should be congratulated for moving quickly to help a grieving family. Insurance companies must protect their insured’s from an excess judgment – or risk being exposed for bad faith.
Florida’s bad faith statute §624.155 and case law can make an insurance company responsible for paying beyond policy limits if they delay settling or add unneeded terms to a release. Florida’s Insurance Code states that all insurance companies have to settle claims fairly and honestly. An insurance company is in “bad faith” when it is reasonably clear that they fail to resolve a claim that they should.
I fail to appreciate Cusano’s motive in trying to undo Allstate’s efforts. Cusano’s benefits from Allstate’s payment since any money the family receives at the trial would be offset by the million dollar settlement. In other words, Cusano’s would only owe a verdict in excess of the million dollars. I question whether or not AIG’s conduct toward both the Otaola family and Cusano’s was in “good faith.”