Jury: Due to 'bad faith,' Geico owes $8.6 million on $100K policy - Insurance News | InsuranceNewsNet

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October 30, 2015 Newswires
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Jury: Due to 'bad faith,' Geico owes $8.6 million on $100K policy

Palm Beach Post (FL)

Oct. 30--WEST PALM BEACH -- Nine years after a crash that claimed the life of a 51-year-old Loxahatchee father of two, his widow and the West Palm Beach man blamed for the fatal accident found themselves on the same side of a legal battle.

And they both won.

After less than two hours of deliberations, a Palm Beach County jury this month found Geico Insurance acted in bad faith when it failed to protect its customer, James Harvey, after he was sued by Tracey Potts in the 2006 crash on the Beeline Highway that killed her husband, John.

The ruling lifted an $8.5 million verdict, which, with interest, has ballooned to $9.6 million, off Harvey's back. It also means Potts stands a better chance of recovering the money another jury in 2010 said she deserved for the loss of her husband.

Had Geico adequately represented Harvey at the time of the crash, it would have only had to pay out $100,000, the limits of the retired consultant's auto insurance policy, said attorney Fred Cunningham, who represented both Potts and Harvey in the bad faith lawsuit. But, because it didn't follow laws that require insurance companies to cooperate fully when one of their customers is involved in a crash, Geico must pay the $8.5 million jury verdict and interest that is continuing to accumulate, he said.

"Bad faith is just insurance company malpractice," Cunningham said.

The insurance company paid Tracey Potts the $100,000 within days of the accident. But a Geico adjuster refused to let her attorney, Sean Domnick, interview Harvey to determine if he had other insurance or any assets she could seize to compensate her for the loss of her husband. Regulations require insurers to make their clients available to provide such information.

"They just said no," Domnick recalled. "My goal was to gather information necessary to help my client make a decision in a very difficult time. It was shocking that this adjuster acted the way she did."

To protect Potts, Domnick sued Harvey and a company that operated a traffic light at Jog Road and the Beeline Highway. Clearing The Signal Group of wrongdoing, the jury in 2010 found Harvey solely responsible for the crash because he ignored the flashing red light and pulled his Hummer into the path of John Potts' motorcycle, causing the fatal crash.

After that verdict was upheld on appeal, Cunningham sued Geico for bad faith on behalf of Potts and Harvey. A jury on Oct. 23 agreed that the insurance giant had acted improperly.

While an attorney representing Geico didn't return a phone call for comment, the company is expected to appeal the decision. Still, Cunningham said, although a final resolution of the case may still be years away, the verdict brought relief to both Potts and Harvey.

Of Harvey, Cunningham said, "He had to live the rest of his life knowing he was involved in an accident that killed someone -- and then to have your insurance company betray you?"

As for Potts, she just wants to move on, he said. "It's not about the money for her," he said. "She just wants closure."

___

(c)2015 The Palm Beach Post (West Palm Beach, Fla.)

Visit The Palm Beach Post (West Palm Beach, Fla.) at www.palmbeachpost.com

Distributed by Tribune Content Agency, LLC.

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