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Florida Second DCA rules that payment made by UM insurer to settle a first-party bad faith claim was not subject to set-off from $30 million jury verdict against defendant in motor vehicle negligence case

On June 11, 2021, in Ellison v. Willoughby, No. 2D19-1961, the Florida Second DCA affirmed a trial court ruling that the defendant in a motor vehicle negligence case was not entitled to a $3.99 million setoff from the $30 million jury verdict against her. The claimed setoff was derived from a $4 million prior settlement that the injured plaintiff had reached with his UIM insurer to resolve a claim for $10,000 in Uninsured Motorist (UM) benefits, with the remaining $3.99 million representing bad faith damages. The defendant conceded that she was not entitled to a set-off of the $10,000 in UM benefits but claimed that she was entitled to set off the remaining $3.99 million because it represented a collateral source subject to setoff under Fla. Stat. §$ 768.76(1) and 768.041(2). The Second DCA agreed that § 768.0141(2) appeared to require a setoff in this situation because the plaintiff delivered a release “in partial satisfaction of the damages sued for” as stated in the statute but declared that it was bound by prior Florida Supreme Court precedent, D'Angelo v. Fitzmaurice, 863 So. 2d 311, 314 (Fla. 2003). The D'Angelo court explained that "the applicability of the setoff statutes is predicated on the existence of other tortfeasors who are liable for the same injury as the settling party." Id. at 316–17. The Second DCA noted that other DCAs have followed this precedent. For instance, the Third and Fourth Districts have held that if "settlement funds are applicable to a claim asserted only against the settling co-defendant [sic], the non-settling [sic] co-defendants [sic] are not eligible for a set-off [sic] in the amount of the settlement." Escadote I Corp. v. Ocean Three Ltd. P'ship, 211 So. 3d 1059, 1062 (Fla. 3d DCA 2016); accord Addison, 240 So. 3d at 764. The Second DCA additionally noted that the UM settlement proceeds did not qualify as a collateral source under § 768.76(1) because punitive, extracontractual damages—like bad faith damages—are not "benefits” falling within the scope and limits of the UM coverage. The Second DCA certified the following question as one of great public importance: IS A SETTLEMENT PAYMENT MADE BY AN UNINSURED MOTORIST INSURER TO SETTLE A FIRST-PARTY BAD BAITH CLAIM SUBJECT TO SETOFF UNDER SECTION 768.041(2) OR A COLLATERAL SOURCE WITHIN THE MEANING OF SECTION 768.76?