Claims Adjusters Owe No Duty to Provide Legal Advice on Florida Bad-Faith Exposure; Insurer’s Own Settlement-Check Decision Breaks Causation

Case: Goauto Insurance Company v. 2B Claims Services Inc.
Court: United States Court of Appeals for the Eleventh Circuit
Date: 2026-06-08
Disposition: Summary judgment for adjuster affirmed (not for publication)

1. Introduction

This appeal arose from a multi-claimant auto accident in Florida involving GoAuto’s insured (a Louisiana policy with low limits: $15,000 per person / $30,000 per accident). GoAuto retained 2B Claims Services Inc. (“2B”) to adjust claims. Two claimants (Harold and Milagros Lacey) repeatedly offered to settle for policy limits, but only if their lawyer had the settlement checks physically in hand by a firm deadline (extended to December 14, 2020).

GoAuto agreed in principle to pay limits, yet refused to send checks without executed releases and allowed the checks-in-hand deadline to pass. Later—before any lawsuit was filed—GoAuto paid approximately $200,000+ above limits to resolve the Laceys’ claims, then sued 2B for breach of fiduciary duty, professional negligence, and negligent misrepresentation, blaming 2B for failing to advise GoAuto about bad-faith excess-exposure risk.

The key issues on appeal were: (i) whether 2B owed GoAuto a duty to warn/advice about Florida insurer bad-faith exposure (a legal-risk assessment), and (ii) whether any act or omission by 2B proximately caused GoAuto’s claimed excess-loss damages, given that GoAuto controlled settlement authority and check issuance.

2. Summary of the Opinion

The Eleventh Circuit affirmed summary judgment for 2B on two core grounds:

  • No proximate causation: the failure to settle within limits flowed from GoAuto’s own decision not to deliver checks by December 14 and to insist on signed releases first. Because 2B lacked settlement/check authority and GoAuto knew of the checks-in-hand condition well before the deadline, a jury could not reasonably attribute the claimed loss to 2B.
  • No duty to give legal advice: 2B’s role was to adjust accident claims (coverage/liability/damages/injury handling), not to provide legal advice about “extracontractual” bad-faith exposure driven by the insurer’s post-accident conduct. Assessing bad-faith risk is fact-intensive and legal in nature; the court agreed 2B had no duty to render such advice.

3. Analysis

3.1 Precedents Cited

The panel’s reasoning is built from four clusters of authority: (a) summary judgment standards, (b) Florida causation principles, (c) elements of the pleaded tort theories, and (d) Florida insurer bad-faith doctrine.

A. Summary judgment framework

  • State Farm Mut. Auto. Ins. Co. v. Spangler, 64 F.4th 1173 (11th Cir. 2023): cited for de novo review and the Rule 56 standard (no genuine dispute of material fact; entitlement to judgment as a matter of law).
  • Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994 (11th Cir. 1992) (citing Celotex Corp. v. Catrett, 477 U.S. 317 (1986)): used for the proposition that summary judgment is appropriate when the non-movant fails to create a factual issue on an essential element. Here, that essential element was causation (and, separately, duty).

B. Florida causation as an essential element

  • Pla v. Rierson, 406 So. 3d 1027 (Fla. Dist. Ct. App. 2025) (quoting Lancheros v. Burke, 375 So. 3d 927 (Fla. Dist. Ct. App. 2023)): cited for the baseline principle that negligence liability extends only to injury, loss, or damage caused by the defendant’s negligence. The court leveraged this to focus the case on whether 2B’s conduct caused the missed settlement and resulting excess payment.

C. Elements of GoAuto’s pleaded claims (treated as negligence variants)

  • Gracey v. Eaker, 837 So. 2d 348 (Fla. 2002): cited for elements of breach of fiduciary duty (including causation and damages).
  • Moransais v. Heathman, 744 So. 2d 973 (Fla. 1999): cited on professional negligence requirements under Florida law.
  • Gilchrist Timber Co. v. ITT Rayonier, Inc., 696 So. 2d 334 (Fla. 1997) (citing Restatement (Second) of Torts § 552(1) (A.L.I. 1977)): cited for negligent misrepresentation elements, again emphasizing duty and causation.

D. Florida insurer bad-faith doctrine (the alleged “excess exposure” risk)

  • Bos. Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783 (Fla. 1980) (per curiam): cited as the foundational articulation that an insurer owes a duty of good faith to the insured, including the obligation to settle where a reasonably prudent person would.
  • Eres v. Progressive Am. Ins. Co., 998 F.3d 1273 (11th Cir. 2021) (citing Bos. Old Colony Ins. Co. v. Gutierrez): cited for the rule that Florida law allows a claimant to sue an insurer for failure to settle on the insured’s behalf.
  • Harvey v. GEICO Gen. Ins. Co., 259 So. 3d 1 (Fla. 2018): cited for the “critical inquiry” into whether the insurer acted with diligence, haste, and precision as if in the insured’s shoes to avoid an excess judgment—especially where liability is clear and damages exceed limits.
  • Berges v. Infinity Ins. Co., 896 So. 2d 665 (Fla. 2004): cited for the “totality of the circumstances” nature of the bad-faith inquiry and to underscore that assessing bad-faith exposure is fact-intensive.

E. Choice-of-law in diversity (contextual)

  • Pelaez v. Gov't Emps. Ins. Co., 13 F.4th 1243 (11th Cir. 2021) (quoting Mesa v. Clarendon Nat'l Ins. Co., 799 F.3d 1353 (11th Cir. 2015)): cited for the rule that federal courts in diversity apply the substantive law of the forum state (Florida).

3.2 Legal Reasoning

A. Causation: GoAuto’s own settlement conduct was dispositive

The panel effectively treated causation as a gatekeeping issue. GoAuto’s theory of damages depended on the premise that a bad-faith exposure existed because GoAuto did not comply with the checks-in-hand settlement condition. But the record showed:

  • By December 3, GoAuto knew the Laceys required checks physically delivered by December 14.
  • GoAuto had the practical ability to send checks (e.g., overnight delivery) but chose not to.
  • GoAuto insisted on executed releases before issuing checks, and tried to counteroffer a different performance sequence (offers first; checks later after releases).
  • The Laceys rejected that sequencing and reiterated checks-in-hand by December 14.
  • 2B lacked check-writing authority and could not settle without GoAuto’s authorization.
  • It was undisputed that delivering checks by 5 p.m. on December 14 would have settled the claims within limits.

On these facts, the court held the causal chain ran through GoAuto’s own decisionmaking. Any alleged shortcomings by 2B (e.g., not monitoring a former employee’s email inbox, delays in confirming whether another potential claimant would assert a claim) did not cause the specific failure to deliver checks by the operative deadline.

B. Duty: no adjuster duty to advise on insurer bad-faith legal exposure

The opinion draws a sharp boundary between:

  • Claim adjusting functions (investigating coverage/liability/damages; handling injury claims; communicating; evaluating), and
  • Legal-risk counseling about extracontractual insurer liability for bad-faith settlement conduct (a doctrinally distinct and post-accident conduct-based exposure).

The panel emphasized that bad-faith exposure “does not arise from the accident itself, but from the insurer’s conduct thereafter,” and concerns potential liability of the insurer, not merely the insured’s tort exposure. Because the bad-faith inquiry is fact-intensive and requires interpreting case law and predicting legal consequences, the court characterized the requested “warn GoAuto of bad-faith excess exposure” obligation as “basically legal advice.”

On the record, the court also found no evidence that GoAuto sought or reasonably expected 2B to provide such advice; notably, GoAuto consulted a Florida attorney (Rob Squire) twice about “due diligence,” reinforcing that GoAuto understood legal evaluation to be a lawyer function, not an adjuster function.

3.3 Impact

  • Clarifies role separation in insurer-vendor relationships: The decision reinforces that independent adjusters retained for claim handling generally are not obligated to provide insurer-facing legal counseling about bad-faith exposure. This helps define the “professional perimeter” of claim-adjuster services, especially where there is no written contract expanding duties.
  • Causation discipline in vendor-liability suits: Even where an adjuster makes mistakes in claim administration, an insurer must connect those mistakes to the concrete settlement failure and damages. Where the insurer retains settlement authority and knowingly chooses a course that misses a deadline, causation will be difficult to prove.
  • Bad-faith risk management lesson: When faced with time-limited demands with strict performance conditions (like checks-in-hand), insurers may need to decide whether to comply, seek judicial/structured relief, or accept the risk—rather than assume a vendor’s “warning” duty will shift responsibility.

4. Complex Concepts Simplified

  • “Bad faith” (Florida insurer bad faith): A claim that an insurer failed to act with the diligence and urgency it would have used if it alone faced the full loss, particularly in settling within limits to protect the insured from an excess judgment (drawn from Bos. Old Colony Ins. Co. v. Gutierrez, Harvey v. GEICO Gen. Ins. Co., and Berges v. Infinity Ins. Co.).
  • “Time-limited demand”: A settlement offer that expires unless the insurer meets specified terms by a set deadline (here, checks physically received by December 14).
  • “Checks-in-hand requirement”: Not merely “we accept your offer by the deadline,” but “the money must physically arrive by the deadline.” The opinion treated GoAuto’s knowledge of this term as central to causation.
  • “Extracontractual liability”: Liability beyond the policy’s contractual limits—here, the claimed exposure to pay more than $30,000 because of alleged bad-faith settlement conduct.
  • “Proximate cause”: The legal requirement that the defendant’s breach actually caused the plaintiff’s loss in a sufficiently direct way. The court held GoAuto’s own decision not to send checks (despite knowing the requirement) was the operative cause.
  • “Unauthorized practice of law” (conceptual use in the opinion): The court treated insurer bad-faith exposure assessment as legal advice—interpreting case law, applying it to facts, and predicting consequences—work typically reserved to licensed attorneys, not adjusters.
  • Summary judgment: A pretrial ruling that ends a case when the evidence—viewed in the non-movant’s favor—still cannot support a verdict on an essential element (here, duty/causation).

5. Conclusion

The Eleventh Circuit’s decision underscores two practical rules for insurer-vendor litigation under Florida negligence principles: (1) an independent claims adjuster retained to investigate and evaluate accident claims does not, without more, owe the insurer a duty to provide legal advice about Florida bad-faith excess exposure; and (2) where the insurer retains settlement authority and knowingly declines to meet a claimant’s settlement condition (here, checks in hand by a date certain), the insurer’s own choice will likely defeat proximate causation for later attempts to shift the resulting excess payment to the adjuster.