Florida Jury: NICO Did Not Act in Bad Faith in Keys Crash that Killed 4 Women from Spain

Six months after a federal appeals court upheld a $12 million verdict against a waste-hauling company in a crash that killed four Spanish women in the Florida keys, a jury has found that the firm’s insurer did not act in bad faith.

The Key West jury verdict, if upheld on appeal, likely means that the families of the women will collect only part of the $12 million judgment. But it is seen as some vindication for National Indemnity Company of the South and other insurers that have paid policy limits but also have been repeatedly hit with bad-faith claims in recent years.

The federal jury in the Southern District of Florida did not expound on the reasons for the verdict, noting only that the attorneys for the four women and for Discount Rock & Sand Inc. did not prove that National Indemnity, a Berkshire Hathaway firm, had shown conduct that could be considered bad faith after the 2018 accident.

The judge’s jury instructions explained that “an insurer acts in bad faith in failing to settle a claim against its insureds when under the totality of the circumstances it could and should have done so, had it acted fairly and honestly towards its insureds and with due regard for their interests.”

The insurer must fully investigate all claims and minimize the possible excess judgments against the insureds, U.S. District Judge Donald Graham wrote. “The critical inquiry is whether National Indemnity diligently, and with the same haste and precision as if it were in its insureds’ shoes, worked on its insureds’ behalf to avoid an excess judgment. The absence of good faith is bad faith.”

The lawyer for National Indemnity, Jesse Drawas, of Fort Lauderdale, said he could not comment on the specifics of the case. But when asked if the verdict is another blow for the well-worn strategy of plaintiffs’ firms seeking bad-faith claims against insurers in order to gain awards above policy limits, he said that 2023 reforms by the Florida Legislature will likely have a bigger impact. That law made it more difficult for plaintiffs to sue insurers on bad-faith grounds if the carrier pays the policy limits within 90 days of a notice of a claim. Plaintiffs must also show more than mere negligence by an insurer.

National Indemnity, known as NICO, in 2021 asked the federal court to declare that it had acted in good faith in the matter and had no further duty to defend Discount Rock, the waste-hauling firm. NICO had paid the policy limit of $1 million to the women’s estates, releasing only the truck driver from the claim. The estates accepted the release.

NICO “acted in good faith in the handling of this claim, evaluated this claim properly and, based on the information known and available to it at the time, made every attempt to settle all claims against Blanco (the driver) and Discount Rock (the waste-hauling firm) within Discount Rock’s policy limit,” NICO’s suit for declaratory judgment said.

The attorney for the Spanish victims’ estates, Paul Layne, of Coral Gables, had claimed that NICO and its adjusters were too quick to push for the policy limit payout as a way to avoid further liability. The insurer also made no effort to show that other companies associated with the waste hauling also had some liability, Layne 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.

The horrific accident made news on both sides of the Atlantic in 2018. The four women, three of whom were attorneys in Spain, were driving on U.S. Highway 1, the busy, two-lane road that links the chain of islands off Florida’s southern tip. They decided to turn left into a scenic viewing area and the driver put the turn signal on and prepared to turn.

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 has 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.

A 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.

A panel of judges for the 11^th U.S. Circuit Court of Appeals in October 2023 disagreed with the trucking firm’s arguments.

It’s unclear if the verdict in the bad-faith suit will be appealed. Layne could not be reached Monday morning. A Berkshire Hathaway spokeswoman also said the insurer could not comment.

Photo: The Overseas Highway in the Florida Keys, near where the accident happened. (Adobe)