Eleventh Circuit Rejects “Set-Up” Claim, Nationwide Tapped for $8.2 Million
The Eleventh Circuit summarily denied Nationwide Insurance’s attempt to reverse a multi-million-dollar judgment in an auto accident fatality case based its gripe with an oft-used plaintiff’s strategy known as “set up” claims. This strategy is designed to use time-limited demands on defendants to bolster bad faith claims against insurers and ultimately increase the value of the case. While this case involved general auto accident liability, such a “set up” can be used against other lines of insurance such as professional liability. The plaintiff sent Nationwide a time-limited, 10-day demand for the $100,000 policy limit and offered a limited liability release shielding the insured from any personal liability for any other claims, with some exceptions. Nationwide rejected the offer after 13 days countering it would only pay if the family supplied a general release under which they would have to repay the insurer if any other claims were made related to medical liens. The parties did not reach an agreement and a jury awarded the plaintiff’s family $5.85 million. The insured assigned the plaintiff his right to sue Nationwide for negligence and bad faith for failing to settle the claims and the plaintiff prevailed. Under Georgia's offer of judgment statute, a party who declines a settlement offer and then loses at trial by at least 25% more than the rejected offer can be ordered to pay the other party's attorney fees accrued from the date of the offer. Nationwide argued on appeal that although the insured caused the plaintiff's damages, the plaintiff’s lawyer had "set up" Nationwide for a bad faith claim by arguing over the terms of the release to set a trap under the Georgia’s bad faith case law.