Hines v. GEICO Indem. Co., 2016 U.S. Dist. LEXIS 20382 (M.D. Fla. 2016)

Claims metrics are admissible to show the motives of adjustors.

In a bad faith claim arising out of an automobile accident and subsequent excess judgment where GEICO refused the opportunity to settle within policy limits, the court considered several evidentiary issues before trial. The court granted the insurance carrier’s motion in limine, precluding the plaintiff from eliciting testimony from adjustors where they were asked to describe their “lay” understanding of bad faith under Florida law. The court found this matter better left for experts. The court granted GEICO’s motion to exclude evidence of violations of the company’s claims manuals, internal policies and codes of conduct, holding that these were redundant or irrelevant because a carrier may structure its guidelines in a way that “goes above and beyond” what is required under Florida law. Significantly, the court held that evidence of GEICO’s use of average loss payment (ALP) metrics to incentivize their adjustors to lower claim payouts would not be excluded on the grounds of relevance or unfair prejudice. As the court explained, any “improper motivation” and GEICO’s “motive in valuing claims” could be “highly relevant,” and whether GEICO was actually motivated by ALP was an issue of fact for the jury.

Case Law Alerts, 3rd Quarter, July 2016

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