What happened: The Eleventh Circuit revived a bad faith claim after Progressive added two disputed conditions to a within-limits auto settlement, including a release naming the wrong woman
Who’s involved: Progressive American Insurance Company (insurer), policyholder, injured motorist and spouse
What’s at stake: Over $1,000,000 in excess judgment against a policyholder who carried $10,000 in bodily injury coverage
Why it matters: Conditions tacked onto a within-limits settlement can sustain a bad faith claim if the insurer has not confirmed they are legally required
Where it stands: Summary judgment overturned, case sent back for jury trial
A rear-end collision, a $3,000 Mercedes and a release form naming the wrong woman have kept a million-dollar bad faith claim alive.
The Eleventh Circuit ruled on November 5 that Progressive American Insurance Company must face a jury over how it handled settlement talks after its policyholder rear-ended another motorist in Florida in September 2016.
The driver carried bare-minimum coverage - $10,000 for bodily injury, $10,000 for property damage. Progressive determined he was entirely at fault. The injured motorist’s attorney offered to settle for $10,000 for injuries and $5,000 for the car, both within policy limits. Progressive agreed to the money. Then it added two conditions.
Progressive wanted the injured motorist’s wife to sign away her right to sue over the impact the crash had on their marriage. Her husband’s attorney said he did not represent her. Progressive never called her directly, breaking from its own agent’s usual practice. Instead, it searched the internet and a database, landed on the motorist’s ex-wife, and put that name on the release.
Progressive also told the motorist to hand over his car title, treating the 1991 Mercedes as a write-off under Florida’s total-loss statute. He had bought it for $3,000 and wanted to repair it. The appeals court noted a provision in the same statute that let the owner send the title to the state himself - Progressive never needed to demand it.
The deal collapsed. The injured motorist sued. A jury awarded over $1,000,000 - including $790,000 in damages, $388,505 in attorney fees and $76,000 in costs - against a driver carrying $10,000 in coverage.
The driver then sued Progressive for bad faith. A lower court sided with Progressive without sending the case to a jury, but the Eleventh Circuit overturned that decision 2-1. The majority found enough disputed facts for trial on three fronts: the spousal waiver, the title-transfer demand and whether Progressive kept its policyholder informed as the deal fell apart.
The dissenting judge argued Progressive acted reasonably given the claimant attorney’s lack of cooperation and flagged concerns about gamesmanship in how the lawsuit was structured.
The case goes back for a jury trial. For claims teams: conditions bolted onto a within-limits settlement - especially ones not confirmed as legally required - can sustain a bad faith claim when the bill lands on the policyholder.
No jury has yet ruled on whether Progressive acted in bad faith. The case has been sent back for further proceedings.
