Bad Faith Requires More Than Negligence: Eleventh Circuit Clarifies Rule 56’s Demands, Coverage-Investigation Leeway, and Global-Settlement Strategy in Florida Third-Party Claims

Introduction

In a published decision, the U.S. Court of Appeals for the Eleventh Circuit affirmed summary judgment for GEICO on a Florida third-party bad-faith claim stemming from a catastrophic multi-vehicle crash. The case centers on Katherine Martinez, a severely injured passenger in an SUV, who later obtained a $2 million stipulated final judgment against GEICO’s insured, Diana Guevara. After an assignment of rights, Martinez sued GEICO, alleging that delays in the insurer’s investigation and settlement tender constituted bad faith under Florida law.

The opinion addresses several recurring fault lines in Florida bad-faith litigation: when an insurer’s duty to initiate settlement arises, how a simultaneous coverage dispute affects that duty, whether deferring payment to pursue a multi-claimant global settlement is consistent with good faith, the evidentiary sufficiency required to defeat summary judgment under Federal Rule of Civil Procedure 56, and the role of internal claims-handling policies and expert testimony. Anchored in Florida Supreme Court precedents such as Harvey v. GEICO, Boston Old Colony, and Powell, and informed by more recent Eleventh Circuit decisions including Ilias and Kinsale, the court’s ruling provides practical guidance for insurers, policyholders, and claimants alike.

Summary of the Opinion

The Eleventh Circuit (Judge Lagoa, joined by Judges Luck and Abudu) affirmed the district court’s grant of summary judgment for GEICO. Applying Florida bad-faith principles through the lens of the federal summary-judgment standard, the court held that no reasonable jury could find that GEICO acted in bad faith under the totality of the circumstances.

Key holdings include:

Evidence amounting to negligence—such as a two-week gap before obtaining the police report or noncompliance with internal timing policies—does not, without more, create an inference of bad faith sufficient to withstand summary judgment under Rule 56.
An insurer facing a bona fide coverage issue may take reasonable time to investigate coverage, so long as it proceeds diligently and works to minimize potential prejudice. GEICO’s prompt actions—including reserving rights, pursuing a bill of sale, querying vehicle records, identifying claimants, requesting medical information, and setting aside and tendering the per-accident policy limit before coverage was fully resolved—were consistent with good faith.
In multi-claimant cases, an insurer may reasonably pursue a global settlement conference rather than immediately paying the most severely injured claimant. That strategy aims to minimize the risk and magnitude of excess judgments and comports with Florida law.
After a claimant makes clear unwillingness to settle within policy limits and provide a full release, the insurer has no duty to accept excess-consent judgments or settle beyond policy limits.
Expert testimony that offers only legal conclusions or conclusory assertions of “bad faith” lacks probative value at summary judgment.

Analysis

Precedents Cited and Their Role

The court’s reasoning synthesizes core Florida bad-faith doctrine with federal procedural standards:

Harvey v. GEICO, 259 So. 3d 1 (Fla. 2018): Reaffirms that bad faith turns on the totality of the circumstances and the insurer’s duty to act as if it were in the insured’s shoes, with diligence and urgency, and that “checklist” compliance is not dispositive. The Eleventh Circuit embraced Harvey’s substantive duty-of-good-faith standard while emphasizing that negligence is not the standard for bad faith.
Boston Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783 (Fla. 1980): Establishes the insurer’s fiduciary-like obligations to investigate, advise about settlement opportunities and risks, fairly consider reasonable offers, and settle where a prudent uninsured would. The court repeatedly invoked Boston Old Colony’s framework.
Powell v. Prudential, 584 So. 2d 12 (Fla. 3d DCA 1991): Recognizes an affirmative duty to initiate settlement when liability is clear and injuries are serious, and permits an inference of bad faith from willful, unjustified delay. The court applied Powell but concluded liability was not “clear” (i.e., obvious) in this multi-vehicle crash with conflicting accounts and a careless-driving citation for another driver.
Ilias v. USAA, 61 F.4th 1338 (11th Cir. 2023): Reiterates core duties and addresses delay vis-à-vis multiple potential claims. The court distinguished Ilias on its facts—there, the insurer offered no evidence of other claimants actively pursuing injury claims; here, six victims participated in a global conference, justifying a global approach.
Kinsale Ins. Co. v. Pride of St. Lucie Lodge 1189, Inc., 135 F.4th 961 (11th Cir. 2025): Explains that “clear liability” in Powell means liability that is obvious. Kinsale surveyed dictionary definitions, examples, and competing facts. The court distinguished Kinsale because GEICO faced a genuine coverage question and conflicting liability narratives, reducing any inference that liability was obvious early on.
DeLaune v. Liberty Mutual, 314 So. 2d 601 (Fla. 4th DCA 1975): An insurer may reasonably evaluate the case before making an offer; negligence is relevant but not enough to constitute bad faith. The court used DeLaune to uphold GEICO’s measured sequence: identify claimants and injuries, pursue coverage facts, then convene a global settlement.
Caldwell v. Allstate, 453 So. 2d 1187 (Fla. 1st DCA 1984) and Pozzi Window Co. v. Auto-Owners, 446 F.3d 1178 (11th Cir. 2006): An insurer with a coverage dispute must promptly and diligently investigate coverage to minimize prejudice—but need not pay uncovered claims to avoid bad-faith exposure. The court credited GEICO for investigating coverage immediately while still setting aside and tendering limits before final coverage confirmation.
Farinas v. Fla. Farm Bureau, 850 So. 2d 555 (Fla. 4th DCA 2003) and Harmon v. State Farm, 232 So. 2d 206 (Fla. 2d DCA 1970): In multi-claimant, limited-limits settings, an insurer should pursue strategies (including global settlement) that minimize total excess exposure. The court relied on these cases to endorse GEICO’s global conference as consistent with good faith.
Eres v. Progressive, 998 F.3d 1273 (11th Cir. 2021) and Mesa v. Clarendon, 799 F.3d 1353 (11th Cir. 2015): Confirm that negligence is not enough to create an inference of bad faith and that summary judgment is appropriate when the record cannot support bad faith under the totality standard. The court treated Martinez’s timing complaints as, at most, negligence.
Contreras v. U.S. Sec. Ins. Co., 927 So. 2d 16 (Fla. 4th DCA 2006) and Kropilak v. 21st Century, 806 F.3d 1062 (11th Cir. 2015): Once it is clear a claimant will not settle within limits and give a release, the insurer owes no duty to agree to an excess consent judgment or otherwise settle beyond limits. The court used this principle to reject bad-faith inferences from GEICO’s post-offer refusals.
50 State Security Serv., Inc. v. Giangrandi, 132 So. 3d 1128 (Fla. 3d DCA 2013) and Pelaez v. GEICO, 13 F.4th 1243 (11th Cir. 2021): Internal policy violations may be evidence of negligence but do not establish bad faith. The court refused to convert internal claims-handling deviations into bad faith.
Federal summary-judgment authorities: Anderson v. Liberty Lobby, 477 U.S. 242 (1986), Four Parcels, 941 F.2d 1428 (11th Cir. 1991), and the Florida Supreme Court’s adoption of the federal summary-judgment standard in In re Amendments to Fla. R. Civ. P. 1.510 (2020–21). The court stressed that Rule 56 requires more than a “scintilla” and that Harvey’s earlier footnote criticizing federal summary-judgment cases is now of doubtful vitality given Florida’s adoption of the federal standard.
Expert-evidence precedents: Commodores Ent. Corp. v. McClary, 879 F.3d 1114 (11th Cir. 2018) and Montgomery v. Aetna, 898 F.2d 1537 (11th Cir. 1990): Legal conclusions by experts are not probative; conclusory opinions cannot defeat summary judgment.

Legal Reasoning

1) Investigatory diligence and timing

Martinez argued GEICO delayed unreasonably in obtaining the police report and contacting claimants, and prioritized coverage investigation over liability to protect itself. The court found that, the day notice arrived, GEICO flagged a coverage issue (the truck was not yet on the policy) and simultaneously took steps to identify claimants, request the police report, and alert the insured to potential excess exposure. Within weeks, GEICO interviewed family members, confirmed severe injuries, and pursued the bill of sale and vehicle-registration information. Two weeks elapsed before the police report was obtained, but the court treated that as—at most—negligence, not bad faith.

Key to the court’s conclusion: the “dual mandate.” Florida law demands diligence in both coverage and liability. Because a bona fide coverage question existed (truck purchased the day of the crash), GEICO reasonably pursued coverage facts while also advancing settlement. It even set aside and tendered the per-accident limit before coverage was finally confirmed—evidence of prioritizing the insured’s interests.

2) Duty to initiate settlement and “clear liability”

Powell’s affirmative-duty-to-initiate applies when liability is clear and injuries are serious. Kinsale recently explained that “clear” means “obvious,” not simply probable. Here, liability was disputed: Morina (the SUV driver) was cited for careless driving; multiple vehicles and impacts were involved; early accounts suggested responsibility could lie elsewhere. On that record, the court held a jury could not reasonably find “obvious” liability on GEICO’s insured such that a failure to tender sooner would evidence bad faith.

3) Multi-claimant losses and global settlement

The court reaffirmed that, with limited per-accident limits and multiple claimants, an insurer acts consistently with good faith by structuring a process—such as a global settlement conference—designed to minimize total excess exposure and treat claimants equitably. GEICO’s decision to wait to allocate the policy until a global conference (and then to split evenly between the two most seriously injured claimants) comported with Farinas and Harmon. The court emphasized there is no obligation to immediately pay the most-injured person before assessing all claims.

4) Post-offer conduct and excess judgments

Once Martinez rejected the within-limits tender and made clear she would not settle within limits and give a full release, GEICO owed no duty to accept excess consent judgments or agree to settlements beyond limits. The court declined to draw a bad-faith inference from GEICO’s refusal to settle on those terms, reinforcing the well-established limits on an insurer’s post-tender duties.

5) Negligence is not the standard; Rule 56 requires more

The court’s procedural holding is pivotal: under Rule 56, a plaintiff must present evidence from which a reasonable jury could find bad faith, not merely negligence. The court explained that Harvey did not (and could not) alter the federal standard, and, in light of Florida’s subsequent adoption of the federal summary-judgment rule, Harvey’s earlier skepticism toward federal cases is “doubtful” in continued relevance. Thus, timing gaps, internal-policy deviations, or other negligence indicators may be “relevant” but are insufficient, without more, to create a triable inference of bad faith in federal court.

6) Expert opinions and legal conclusions

The court gave no weight to the plaintiff’s expert’s conclusory assertions that GEICO violated its good-faith duty. An expert cannot defeat summary judgment with bare legal conclusions; courts, not experts, decide the legal implications of facts. Without substantive, non-conclusory, fact-grounded analysis showing how the conduct amounted to bad faith, such testimony is not probative.

Impact

This published decision carries notable implications for Florida bad-faith litigation in federal courts (and, practically, in state courts, given Florida’s adoption of the federal summary-judgment standard):

Rule 56 elevation of proof: Plaintiffs must marshal more than evidence of delay or policy deviations. Absent facts supporting an inference of willful, unjustified delay or disregard of the insured’s interests, negligence evidence will not defeat summary judgment.
Coverage disputes matter: When coverage is genuinely in question, insurers have leeway to investigate coverage promptly and thoroughly while advancing settlement. Tendering limits even before coverage confirmation is strong evidence of good faith.
“Clear liability” is exacting: Kinsale’s “obvious liability” gloss cabins Powell’s affirmative duty. In complex, multi-vehicle collisions with conflicting evidence, courts may hesitate to find “clear” liability at the outset.
Global settlement is sound strategy: In multi-claimant accidents with small per-accident limits, convening a global settlement conference and deferring allocation until all claims are assessed is consistent with good faith and may reduce excess exposure risk.
Post-tender boundaries: If the claimant will not settle within limits with a full release, the insurer does not owe a duty to accept excess consent judgments or to pay above limits.
Internal manuals and experts: Internal policy breaches and conclusory expert opinions rarely move the needle. Plaintiffs should focus on substantive, fact-driven proof of bad-faith decision-making under the totality standard.

For practitioners:

Insurers: Document early steps showing diligence on both coverage and liability; promptly warn insureds about excess exposure; consider setting aside/tendering limits where appropriate; and, in multi-claimant settings, explain and implement a fair global-settlement process.
Claimants/insureds: To survive Rule 56, build a record of concrete conduct suggesting willful delay or disregard for the insured’s interests (e.g., ignored clear liability, refused reasonable within-limits opportunities, failed to communicate material facts), not merely imperfect or slow claims handling.

Complex Concepts Simplified

Bad faith (third-party): A claim that an insurer mishandled settlement of a claim against its insured, exposing the insured to an excess judgment. The insurer must act with the same urgency and care as if it personally faced paying the judgment.
Totality of the circumstances: Courts assess all relevant facts together—investigation, communications, settlement efforts, timing, coverage posture—not by rigid checklists.
Clear (obvious) liability: A threshold from Powell/Kinsale. The duty to initiate settlement arises when it is plainly evident that the insured is liable and injuries are so severe that an excess judgment is likely.
Coverage dispute: A question whether the policy applies (e.g., whether the vehicle was covered). Insurers must investigate coverage promptly but need not pay uncovered claims to avoid bad-faith exposure.
Individual vs. aggregate limits: Per-person limit (here $10,000) versus per-accident cap (here $20,000) across all bodily-injury claims arising from the same accident.
Global settlement conference: A meeting of all claimants to equitably allocate limited policy proceeds, aiming to minimize the insured’s aggregate excess exposure.
Reservation-of-rights letter: Notice that the insurer will investigate and/or defend while reserving the right to deny coverage later.
Excess judgment and assignment: When a judgment exceeds policy limits, the insured may assign to the claimant the right to sue the insurer for bad faith to recover the excess.
Summary judgment (Rule 56): A case is decided without trial where no genuine dispute of material fact exists and no reasonable jury could find for the nonmoving party. Under this standard, a “scintilla” of evidence or conclusory expert views is insufficient.

Conclusion

Martinez v. GEICO fortifies several pillars of Florida bad-faith doctrine as applied in federal courts: negligence alone is not bad faith; Rule 56 demands more than incremental missteps; coverage disputes legitimately affect the timing and nature of settlement efforts; and, in multi-claimant cases, global settlement strategies can be not only reasonable but protective of the insured’s interests. The court’s analysis underscores that bad faith remains a fact-intensive inquiry, but one that will not reach a jury absent competent evidence from which bad faith—not merely imperfect claims handling—can reasonably be inferred.

For insurers, the decision validates prompt, documented dual-tracking of coverage and liability investigations and supports global settlement conferences in multi-claimant, low-limits scenarios. For plaintiffs, it highlights the need to develop substantive evidence of willful or unjustified claim-handling choices that betray the insured’s interests. Going forward, the opinion’s articulation of the standard—especially its Rule 56 emphasis and its treatment of “clear liability,” coverage investigations, and global tenders—will shape the playbook for litigating Florida third-party bad-faith claims in federal court.