Appeals Court Upholds $12M Verdict in Fatal Keys Crash; Insurer Facing Bad-Faith Claim

By | October 27, 2023

A federal appeals court this week upheld a $12 million jury award against a gravel and waste-hauling company in a horrific highway accident that killed four Spanish women who were on vacation in the Florida Keys in 2018.

But it’s far from certain how much of the judgment the women’s families will see. The plaintiffs’ attorneys in the case now find themselves on the side of the trucking firm that they had sued, arguing that the firm’s liability insurance company, National Indemnity Co. of the South (NICO), acted in bad faith, failed to defend the hauling company and inappropriately attempted to minimize a payout early on.

“Improper claims handling – that’s the message here,” said Paul Layne, with the Silva & Silva law firm in Coral Gables, which represents the estates of the young women killed in the crash. “It’s a real screw-up that put the carrier in this position.”

An attorney for NICO discounted Layne’s assertions, noting that the $1 million policy limit was paid and the insurer acted reasonably. Layne acknowledged that his bad-faith claim likely would have been barred under Florida’s 2023 tort-reform law, which now prohibits such claims if the insurer pays the policy limits within 90 days of a notice of a claim. Plaintiffs must also show more than mere negligence by an insurer.

The March 2018 tragedy unfolded like this: The four women, three of whom were attorneys in Spain, were driving on U.S. Highway 1, the busy, two-lane “overseas highway” that links the chain of islands off Florida’s southern tip. They decided to turn left into a scenic viewing area. The driver put the turn signal on, slowed down and prepared to turn, the 11th U.S. Circuit Court of Appeals court explained in its Oct. 25 opinion.

A Discount Rock & Sand tanker truck, driven by Carlos Blanco, carrying waste from porta-potties, slammed into the rear of the women’s vehicle at what witnesses said was a high rate of speed. The impact forced the car into a the path of a recreational vehicle approaching in the other lane. The car was crushed like an accordion, Layne said, killing all four of the women.

A witness said Blanco, who had previous traffic violations, appeared to be looking down just before the accident and may have been distracted. The women’s estates also showed that Discount Rock had recently had the Isuzu truck modified to hold the 1,100-gallon tank, but had not tested the braking and did not provide the driver with extra training on the 20,000-pound vehicle.

Blanco three years earlier had immigrated from Cuba, a country that does not have the type of vehicles and traffic seen in Florida, Layne said.

The jury in 2021 returned the $11.8 million verdict, finding Discount Rock vicariously liable. The hauling company, based in Marathon, Florida, appealed. Its lawyers argued that the trial court had erred by instructing the jury that a following driver is usually at fault in rear-end collisions. The trucking firm also argued that the judge had improperly allowed a last-minute accident reconstruction visual aid to be shown to the jury.

The 11th Circuit panel of appellate judges shot down all of the firm’s arguments.

“The district court didn’t err in denying judgment as a matter of law for Discount Rock on the estates’ negligent entrustment claim because there was sufficient evidence for the jury to find that Discount Rock negligently entrusted Blanco with the modified truck,” the court concluded.

In February 2020, more than a year before the trial against Discount Rock began, NICO paid the policy limit of $1 million to the women’s estate, releasing only the driver, Blanco, from the claim. The estates accepted the release, according to a separate complaint filed by National Indemnity, which is seeking a declaration from a judge that it acted in good faith throughout the claim process and litigation.

But Layne, the lawyer for the Spanish women’s estate, contends that NICO did not act in good faith and that its adjusters and company officials were too quick to push for the policy limit payout as a way to avoid further liability. They also made no effort to show that other companies associated with the waste hauling also had some liability, he argued.

“The settlement did not even benefit Blanco (the driver), who would remain exposed to a potential claim for indemnification by Discount Rock, and thus the settlement only benefitted National Indemnity,” Layne wrote in his counterclaim, essentially supporting the hauling firm’s position.

“Discount Rock informed National Indemnity that its tender of the policy and exhaustion of its limits on the Blanco Settlement amounted to bad faith because the settlement provided no benefit to either insured, grievously harmed and disadvantaged Discount Rock at trial, and served only to benefit National Indemnity, who would be relieved of any further obligation under the Policy,” the counterclaim reads.

NICO, a Berkshire Hathaway company, said in its filings that it had attempted to resolve all claims but it was hindered by Discount Rock’s refusal to provide financial information.

The bad-faith claim against the insurer was put on hold while the $12 million jury verdict was appealed. Now, that case can proceed in US District Court for south Florida.

“Our clients hope they can reach a resolution,” Layne said. “They don’t care where it comes from – if some money comes from Discount Rock and some comes from NICO.”

The women’s families have been “destroyed” by the tragedy, he said.

Attorneys for Discount Rock could not be reached for comment.

Photo: 11th Circuit Court building in Atlanta.

Topics Florida Carriers Liability

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