No Good Deed Goes Unpunished


Bad Faith Attempted Set Up Fails

Nya Yanitza Montanez appealed the district court’s grant of summary judgment for Liberty Mutual Fire Insurance Company on her bad faith claim. The son of Defendant’s insured caused an automobile accident involving two other cars and resulting in the death of Plaintiff’s daughter and the injury of four other individuals. Although Defendant made the entire policy limits available to the various claimants, Plaintiff rebuffed Defendant’s efforts to settle the case and instead proceeded with a lawsuit against Defendant’s insured. She then obtained the agreement of Defendant’s insured to a consent judgment in the amount of $8.25 million against the insured on the wrongful death claim made on behalf of her daughter.

Thereafter, Plaintiff filed a bad faith claim against Defendant, contending that because Defendant had failed to timely settle the wrongful death claim, she is entitled to the damages awarded in the consent judgment, an amount that greatly exceeds the insured’s policy limits.

In Nya Yanitza Montanez, as Personal Representative of the Estate of Yanely Gonzalez, deceased v. Liberty Mutual Fire Insurance Company, No. 19-13941, United States Court Of Appeals For The Eleventh Circuit (August 28, 2020) sought reversal of the summary judgment.


Jason Brown was driving his father’s vehicle in West Palm Beach, Florida, when he violently rear-ended Plaintiff’s vehicle and spun into another car. The collisions injured five individuals riding in the two vehicles. Plaintiff was injured while driving her two minor children, three-month-old Yanely Gonzalez and eight-year-old Eduardo Gonzalez, Jr. Sadly, Yanely was killed. In short, the accident resulted in five victims, each with claims against Jason (the driver) and his father (the owner of the vehicle).

Jason’s father, Douglas Brown, had a Liberty Mutual automobile insurance policy, which provided liability limits of $250,000 per person and $500,000 per accident. Douglas Brown reported his son’s accident to Defendant informing them that a child had been killed.

Defendant’s coverage investigation was thorough, prompt and concluded in favor of coverage.

The PIP insurer advised the adjuster that Plaintiff had retained Toral, Garcia & Franz as counsel. That same day, the adjuster telephoned Mr. Toral’s office.  Plaintiff’s counsel did not return the adjuster’s calls for more than a month.  The PIP adjuster similarly informed Defendant that Eduardo Gonzalez Jr. had also sustained “serious injuries,” including a head injury, after being ejected from the vehicle. Despite not receiving any communication from Plaintiff and not receiving any medical records or bills for any of the four claimants undergoing medical treatment, Defendant sent a letter to counsel for all claimants on March 4, 2010, stating that it was making its full $250,000 per-person and $500,000 per-accident policy limits available to settle the claims arising from the accident. Defendant stated that it would be arranging a settlement conference to assist all claimants in reaching an apportioned settlement.

Finally, after a few months, Lewis Jack called the claims adjuster and stated that he and Toral represented the plaintiff. Nearly four weeks later Plaintiff’s counsel sent its first correspondence to Defendant regarding Plaintiff’s claims. In that letter, Plaintiff preemptively rejected any offer by Defendant to settle Plaintiff’s wrongful death claim, stating that Defendant should have immediately tendered the $250,000 policy limit instead of attempting to resolve the claims of all the victims at a settlement conference. Notably, Plaintiff never made a demand to settle the wrongful death claim for the $250,000 per-person policy limits. As for the personal injury claims, Plaintiff’s letter requested that Liberty Mutual tender $125,000 for Plaintiff’s personal injury claims and $125,000 for Eduardo Gonzalez Jr.’s personal injury claims.

Defendant responded by promptly accepting Plaintiff’s offer and issued two $125,000 checks to settle Plaintiff’s and Eduardo Gonzalez Jr.’s personal injury claims. Defendant also offered the remaining available policy limit of $250,000 to settle the wrongful death claim brought on behalf of the infant killed in the accident, later forwarding a check to Plaintiff’s counsel.

Rather than settle, Plaintiff and Eduardo Gonzalez Jr. filed suit against the insureds, raising their personal injury claims and the wrongful death claim, among others. All claims except the wrongful death claim were eventually settled with the cooperation of the insured,  a $8.25 million consent judgment against the insured on the wrongful death claim.


Florida law provides that an insurer owes a duty of good faith to its insured. The insurer’s duty of good faith obligates the insurer to advise the insured of settlement opportunities, to advise as to the probable outcome of the litigation, to warn of the possibility of an excess judgment, and to advise the insured of any steps he might take to avoid the same. The duty also requires the insurer to investigate the facts, give fair consideration to a settlement offer that is not unreasonable under the facts, and settle, if possible, where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so. When an insurer breaches its duty a cause of action for bad faith may be brought against the insurer.

No Reasonable Jury Could Find Defendant Acted in Bad Faith

The Eleventh Circuit concluded that upon notification of the accident, Defendant immediately opened a claim file and began an investigation. Through its own research, Defendant quickly determined that there were multiple victims not disclosed by the insured and that there were five total claimants. Defendant diligently investigated the claims arising from the occupants of the second vehicle, obtaining updates regarding the extent of their injury and their medical care. Defendant worked to do the same for Plaintiff and was able to obtain limited information from Plaintiff’s Personal Injury Protection carrier. Defendant identified Plaintiff’s counsel, initiated contact, and repeatedly attempted to engage Plaintiff’s counsel, all to no avail. Consequently, Defendant remained in the dark regarding Plaintiff’s counsel’s assessment of the personal injury claims of Plaintiff and Eduardo Gonzalez Jr. Given counsel’s radio silence, Defendant also lacked any knowledge whether Plaintiff would be willing to settle the wrongful death claim for $250,000.

Upon completion of the coverage investigation, and within 32 days of being notified of the accident, Defendant offered the full policy limits in furtherance of a global settlement of the multiple claims. Despite the fact that Plaintiff never even attempted to communicate with Defendant—much less make a settlement demand—before Defendant made the full policy limits available.

Moreover, given the lack of communication from Plaintiff, the Eleventh Circuit could see no evidence in the record suggesting that Defendant knew it was exposing its insured to excess liability by failing to immediately tender the full policy limits for the wrongful death claim and by proposing a global settlement conference 32 days after first learning of the accident and before receiving any of the medical records that it repeatedly sought during that period.

Viewing the facts in the light most favorable to Plaintiff, and considering the totality of the circumstances, the Eleventh Circuit could find no evidence indicating Defendant unreasonably exposed its insured to a judgment in excess of his policy limits. Accordingly, no reasonable jury could find that Defendant acted in bad faith.


When an insurer is faced with multiple claims of injuries from a single accident and policy limits inadequate to compensate all of the plaintiffs it is faced with an important and difficult situation for itself and its insured. Liberty did what it needed to do: it conducted a thorough investigation quickly determining the inadequacy of the available limits offered it to all of the injured and sought alternative dispute resolution to work out distribution of the available funds. Rather than work fairly the plaintiff and her lawyers entered into an agreement with the insured to agree to a multi-million dollar judgment collectable from the bad faith case. Since there was no bad faith and the rather, exceptionally fast, thorough investigation and offer of full policy limits, that good deed was punished with a bad faith suit that Liberty was required to defend by summary judgment and defeat an appeal to the Eleventh Circuit. The other injured persons were left with only the personal assets of Liberty’s insured and their PIP or UIM coverage available. In some states, leaving an insured with no available insurance could be considered bad faith but was not an issue in this case.

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

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