A federal appeals court ruled that a jury should hear a bad-faith lawsuit against Kinsale Insurance Co., which faces accusations of failing to make a timely settlement offer related to a shooting incident, according to BestWire.
The U.S. Court of Appeals for the Eleventh Circuit issued its decision on April 18. It concluded that a jury could reasonably determine Kinsale knew or should have known that liability in the case was clear.
The court also found a jury could determine that Kinsale understood the severity of the injuries involved and that potential damages far exceeded the policy’s $50,000 limit.
The underlying case began in 2015 at the Pride of St. Lucie Lodge 1189, a club and bar in Florida. According to the court, two groups of female patrons began fighting late at night.
Volunteer security guards broke up the altercation and directed each group to exit through separate doors. Within 10 to 15 minutes, the groups encountered each other again in a dark parking lot behind the lodge.
The second confrontation ended when Tanya Oliver was shot in the forehead. She died the following year.
A jury later awarded more than $3.3mn in damages to Oliver’s estate, finding the lodge liable. Both the estate and the lodge sued Kinsale, alleging the company breached its duty of good faith by failing to offer a settlement within the policy limits before a formal claim was filed.
Lower courts initially ruled no reasonable jury would find liability clear, but the Eleventh Circuit disagreed. It stated that the lodge’s security did not intervene to prevent the second fight or stop it from escalating.
The court also said a jury could find Kinsale was aware Oliver had been critically injured and that the nature of the incident made the risk of high damages obvious.
Judge Barbara Lagoa dissented. She expressed doubt about whether Florida law clearly outlines when insurers must initiate settlement discussions.
Lagoa also noted differences between this case and prior decisions that addressed similar timing questions.
On April 22, Kinsale’s legal team filed an unopposed request to extend the deadline to seek a rehearing. The court granted the motion, giving the company until May 19 to file.
