             Case: 12-10265     Date Filed: 09/14/2012   Page: 1 of 13

                                                             [DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT

                          ________________________

                                No. 12-10265
                            Non-Argument Calendar
                          ________________________

                   D. C. Docket No. 6:09-cv-00876-MSS-KRS

ERSKIN BELL,
as Guardians and Parents of Erskin Bell, II,
PHILLIPA ST. MARIE-BELL,
as Guardians and Parents of Erskin Bell, II,

                                                   Plaintiffs-Appellants,

                                      versus

GEICO GENERAL INSURANCE COMPANY,

                                                   Defendant-Appellee.

                          ________________________

                   Appeal from the United States District Court
                       for the Middle District of Florida
                         ________________________

                               (September 14, 2012)


Before DUBINA, Chief Judge, JORDAN and ANDERSON, Circuit Judges.

PER CURIAM:
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      Plaintiffs-Appellants Erskin Bell, Sr. (Erskin, Sr.) and Phillipa St. Marie-

Bell (“Phillipa”) (collectively “the Bells”), as guardians and parents of Erskin

Bell, II (“Erskin”), appeal the district court’s order granting Defendant-Appellee

GEICO General Insurance Company’s (“GEICO”) motion for summary judgment

and denying the Bells’ motion for partial summary judgment. Upon review of the

record and the parties’ briefs, we affirm the district court’s judgment in favor of

GEICO.

                                   I. Background

      GEICO issued an automobile liability insurance policy to the Bells

providing non-stacking Uninsured/Underinsured Motorist (“UM”) coverage in the

amount of $25,000.00 per person and $50,000.00 per occurrence. The policy’s

“payment of loss” provision states that:

      Any amount due is payable:

      (a) to the insured or his authorized representative,

      (b) if the insured is a minor, to his parent or guardian,

      (c) if the insured is deceased, to his surviving spouse; otherwise

      (d) to a person authorized by law to receive the payment, or to a
      person legally entitled to recover payment for the damages.

      [GEICO] may, at [its] option, pay an amount due in accordance with
      (d) above.

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[R. 62-2 at 32–33.]

On November 30, 2008, the Bells’ son, Erskin, was involved in a very serious

automobile accident which left Erskin, in a coma. The accident required Erskin’s

transport to and care from Orlando Regional Medical Center (“the hospital”).

GEICO was first notified of Erskin’s injury on December 2, 2008, when it

received a call from the hospital requesting information about coverage under the

Bells’ policy. GEICO immediately began investigating the loss and contacted

Erskin, Sr.

      On December 3, 2008, GEICO claims supervisor Karen Hall (“Hall”) noted

that GEICO would tender its full $25,000.00 UM policy limits to the Bells once

she received confirmation from underwriting as to the available amount of

coverage under the policy. In accordance with Chapter 57-1644, Laws of Florida

and Orange County Code of Ordinances, Part II, Chapter 20, Article IV, the

hospital filed a lien on December 12, 2008, which attached to “any and all . . .

claims . . . accruing to [Erskin]” [R. 62-7 at 1.] The same day, Nick Denton

(“Denton”), a GEICO claims examiner, contacted Phillipa and told her that

GEICO would be issuing a check for the $25,000.00 UM policy limits and that the

check would include the hospital as a payee. Denton also wrote Phillipa



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confirming their conversation and providing her with a check for the $25,000.00

UM policy limits, a proposed release of the UM claim, a certified copy of the

insurance policy, an affidavit of coverage, and the UM selection form showing the

Bells’ amount of UM coverage.

      The Bells’ attorney, Nathan Carter, Esq. (“Carter”), wrote GEICO a letter,

received on December 15, 2008, advising that he represented the Bells and

requesting disclosure of their insurance information. Denton wrote Carter on the

same date, provided a certified copy of GEICO’s policy, an affidavit of coverage,

the Bells’ uninsured motorist selection form, and advised that GEICO had

tendered the $25,000.00 UM policy limits to the Bells by check payable to Erskin

Bell and the hospital.1 Afterward, the Bells contend that Carter or his paralegal

contacted Denton two or three times by phone, stating that Phillipa’s health

insurance would cover the hospital expenses and asking GEICO to reissue the

check to the Bells, or alternatively, to Carter’s firm trust account. Denton does not

remember the substance of each conversation, but claims that if Carter’s paralegal

in fact raised the possibility of reissuing the settlement check to the law firm’s

trust account, that Denton would have requested confirmation in writing that

Carter’s firm would satisfy the hospital’s lien. Carter drafted a letter on January

      1
          The check was presumably payable to Erskin, Sr., as he was the GEICO policy holder.

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23, 2009, requesting a check made payable to his firm’s trust account and

promising to resolve the hospital lien, but GEICO never received the letter. It is

not clear from the record whether the letter was actually mailed. Hall testified that

had she been aware of Carter’s request to reissue the check to the firm trust

account, GEICO would have done it so long as Carter promised to protect GEICO

from any obligation on the lien.

      On January 28, 2009, Carter filed a Civil Remedy Notice (“CRN”) on behalf

of Erskin, Sr. with the Florida Department of Financial Services. The CRN

identified “claim denial” as the “reason for notice,” and described the “facts and

circumstances giving rise to the insurer’s violation” as follows: “CLAIMANT

HAS PROVIDED PROOF OF CLEAR LIABILITY ON THE PART OF AN

UNDERINSURED/UNINSURED MOTORIST, AND DAMAGES IN EXCESS

OF THE POLICY LIMITS, YET GEICO HAS FAILED TO

UNCONDITIONALLY TENDER THE INSURED’S UM POLICY LIMITS.”

The CRN identified Denton as the GEICO employee most responsible for and

knowledgeable of the facts surrounding the alleged violation. Upon receipt of the

CRN on February 2, Denton claims that he tried to call Carter, but was unable to

reach him. On February 6, 2009, Denton responded to the CRN by writing Carter,

explaining that GEICO had already tendered payment and that it would reissue the

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check without the hospital as a payee if GEICO received written notice from

Carter explaining how the hospital’s lien would be satisfied. On February 20,

2009, Carter responded by letter to GEICO, refusing any check made payable to

the hospital. For whatever reason, Carter did not address GEICO’s request for the

firm’s assurance that it would be responsible for satisfaction of the hospital’s lien.

      The Bells were also entitled to $10,000.00 in personal injury protection

(“PIP”) coverage from GEICO. Another GEICO employee, Veronica Williams

(“Williams”), who had no interaction with Denton, separately processed the PIP

claim and allegedly paid the entire $10,000.00 to an ambulance company, rather

than paying $5,000.00 to the hospital. GEICO then refused to pay the hospital the

$5,000.00 in PIP coverage until GEICO was reimbursed $5,000.00 from the

ambulance company. The hospital would not bill Philippa’s health insurance

company or release its lien until receiving notification from GEICO that the Bells’

PIP coverage had been exhausted. The hospital’s lien was released on May 29,

2009, once GEICO reissued $5,000.00 for PIP coverage to the hospital. On June

12, 2009, GEICO issued a new $25,000.00 check, payable solely to Erskin Bell.

The Bells refused to accept the $25,000.00, as they had already filed a complaint

in state court against GEICO alleging first-party bad faith for GEICO’s failure to

settle their UM claim within the statutory cure period. After GEICO removed the

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case to federal court, answered the complaint, and settled some issues in

mediation, the parties filed cross motions for summary judgment on the first-party

bad faith claim. The district court decided the motions in GEICO’s favor, and the

Bells timely filed this appeal.

                                  II. Standard of Review

      We review the district court’s grant of summary judgment de novo, applying

the same standard as the district court. Perry v. Sec’y, Fla. Dep’t of Corrs., 664

F.3d 1359, 1363 (11th Cir. 2011).

                                      III. Discussion

      Fla. Stat.§ 624.155(1)(b)1, which creates a cause of action for first-party

bad faith, provides that an insurer is liable if it does not attempt “in good faith to

settle claims when, under all the circumstances, it could and should have done so,

had it acted fairly and honestly toward its insured and with due regard for [the

insured’s] interests.” An insurer’s simple negligence does not amount to bad faith.

See DeLaune v. Liberty Mut. Ins. Co., 314 So. 2d 601, 603 (Fla. Ct. App. 1975).

Before an insured may bring a suit for first-party bad faith, he or she must give the

insurer written notice of the alleged violation by filing a CRN. Fla. Stat. §

624.155(3)(a). If “within 60 days after filing [the CRN], the damages are paid or

the circumstances giving rise to the violation are corrected,” then no claim for bad

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faith exists. Fla. Stat. § 624.155 (3)(d). To cure a violation, the insurer must

tender “the amount owed pursuant to the express terms and conditions of the

policy.” Talat Enters., Inc. v. Aetna Cas. & Surety Co., 753 So. 2d 1278, 1282

(Fla. 2000).

      In the instant case, the district court found that the Bells never acquired a

claim under Fla. Stat.§ 624.155 because GEICO tendered the full policy coverage,

$25,000.00 payable to Erskin, Sr. and the hospital, in compliance with the Bells’

insurance policy providing for payment of loss “to a person authorized by law to

receive payment, or to a person legally entitled to recover payment for the

damages.” [R. 94 at 6 (quoting R. 62-2 at 33).] On appeal, the Bells allege error

on three grounds discussed below.

A. GEICO’s responsibility for delay in the release of the hospital lien

      The Bells first argue that the district court ignored GEICO’s errors in

processing their PIP claim that created and prolonged the hospital’s lien on their

$25,000.00 in UM funds. They allege that by erroneously paying their PIP funds

entirely to an ambulance company, and then delaying a $5,000.00 payment to the

hospital until receiving reimbursement from the ambulance company, GEICO’s

action (and later, inaction) kept the hospital lien in place. Absent the existence of




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the hospital lien, GEICO would have issued the check to the Bells as payees, as

they demanded. The Bells’ position is without merit for several reasons.

      First and foremost, as the district court held, GEICO’s payment of loss did

not amount to bad faith since the “express terms and conditions of the [Bells’]

policy” allowed for payment to the hospital, a person entitled by law to receive

payment. See Talat, 753 So. 2d at 1282. Thus, we conclude that the district court

correctly reasoned that GEICO’s error and delay in routing $5,000.00 from the

Bells’ PIP claim to the hospital did not change the fact that GEICO was

contractually entitled to render payment to the hospital so long as the hospital held

its valid lien. See Dade Cnty v. Pavon, 266 So. 2d 94, 96 (Fla. Ct. App. 1972)

(holding that upon admission to a hospital, the hospital’s lien “attached to the

proceeds of all [insurance] claims accruing to the patient or his legal

representative as a result of the patient’s hospitalization”).

      Second, we conclude that while GEICO’s error and delay in the handling of

the separate PIP claim may constitute negligence, it does not rise to the level of a

bad faith failure to settle the UM claim. Third, in the CRN – the statutory vehicle

for curing an insurer’s bad faith denial of a claim – Carter gave GEICO no facts

explaining the connection between the delayed PIP payment to the hospital and the




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hospital’s unresolved lien on the UM claim payment.2 The Bells respond that

GEICO never asked Carter for more information about the vague complaint.

Further, they claim that they could not address the PIP issue in the CRN because

they were unaware of the connection between the mishandled PIP claim and the

lien on UM proceeds until after filing the CRN. Even so, Fla. Stat.§ 624.155(3)(b)

requires the insured to explain in the CRN the “facts and circumstances”

surrounding the insurer’s bad faith in order to allow the insurer to remedy the

problem. The Bells’ CRN did not afford GEICO the opportunity to correct “the

circumstances giving rise to the [alleged] violation.” Id. § 624.155(3)(d); see also

Lane v. Westfield Ins. Co., 862 So. 2d 774, 779 (Fla. Ct. App. 2003) (reasoning

that “[t]he purpose of the [CRN] is to give the insurer one last chance to settle a

claim with its insured and avoid unnecessary bad faith litigation—not to give the

insured a right of action to proceed against the insurer even after the insured’s

claim has been paid or resolved.”) For all these reasons, we conclude that the

Bells have failed to show how GEICO’s conduct amounted to a bad faith refusal to

settle their UM claim. Thus, we hold that the district court correctly found that no

cause of action for first-party bad faith ever came into existence.


       2
         Similarly, the CRN is devoid of facts explaining how GEICO acted in bad faith by failing
to cooperate with Carter to issue the check to his law firm’s trust account upon his assurance that the
firm would be responsible for the hospital lien.

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B. The Bells’ additional arguments

      Additionally, the Bells argue that the “payment of loss” provision in the

insurance policy, quoted supra, requires GEICO to remit payment to either the

insured or the hospital, but not both. They posit that GEICO should not have

issued a check payable to both the insured and a lienholder, and that to justify this

action, the district court improperly supplied the word “and” in the place of an

implied “or” between the policy’s descriptions of the persons to whom GEICO

was entitled to tender payment. Alternatively, they argue that the “payment of

loss” provision is ambiguous, and therefore, the insurance policy should have been

interpreted in their favor. This contractual interpretation argument was not raised

in the district court. Normally, we will not consider an issue raised for the first

time on appeal. Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1331 (11th

Cir. 2004). The Bells urge us to consider this argument because (1) contract

interpretation is a purely legal issue, rather than a factual question; and (2) our

refusal to consider the argument would result in a miscarriage of justice. See

Garcia v. Pub. Health Trust of Dade Cnty., 841 F.2d 1062, 1066 (11th Cir. 1988)

(explaining exceptions to our custom of refusing consideration of arguments

raised for the first time on appeal). We recognize that Florida courts have long

held that an insurer faced with competing demands for payment from the insured

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and a hospital has the option to “ma[k]e a check for the limits [of the policy]

payable to both of the competitors, the hospital and the insured.” Gov’t Emp. Ins.

Co. v. Gonzalez, 512 So. 2d 269, 270–71 (Fla. Ct. App. 1987) (citing Fernandez v.

S.C. Ins. Co., 408 So. 2d 753, 755 (Fla. Ct. App. 1982). Thus, we decline to

consider the Bells’ argument because our refusal to do so could not result in a

miscarriage of justice.

      Finally, the Bells argue, also for the first time, that GEICO’s defense based

on the policy’s “payment of loss” provision should be estopped by the “mend the

hold” doctrine, which prohibits a party from taking inconsistent positions during

litigation. The Bells allege that when Carter disputed the UM settlement check’s

listing of the hospital as payee, GEICO never relied on the “payment of loss”

provision in the policy. Even if the “mend the hold” argument has merit, it

requires us to consider factual questions regarding GEICO’s consistent or

inconsistent behavior. We therefore decline to entertain this argument as well.

See Garcia, 841 F.2d at 1066.

                                   V. Conclusion

      The circumstances surrounding Erskin’s car accident and incapacitation are

very unfortunate. However, the facts of this case, even when considered in the

light most favorable to the Bells, do not require resolution by a jury. As a matter

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of law, we conclude that GEICO did not act unfairly or dishonestly toward the

Bells by refusing to settle their UM claim on the Bells’ terms. GEICO promptly

responded to the Bells’ claim, settled for the full amount available under the

policy, and acted within its rights under the policy to issue a check payable to both

the Bells and the hospital. Consequently, we affirm the district court’s grant of

summary judgment in favor of Geico.

      AFFIRMED.




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