First District Court of Appeal finds setoff is appropriate in an underinsured motorist claim when the tortfeasor’s liability coverage is available to an injured plaintiff, even when no benefits have been paid.

The plaintiff had been involved in a vehicle accident and pursued a claim with the tortfeasor motorist’s liability insurance, with limits of $25,000.00, but later abandoned the claim. Afterwards, the plaintiff pursued an underinsured motorist claim with his insurance company, GEICO.

The claim proceeded to trial, where the plaintiff argued the other motorist was underinsured he was entitled to damages. The jury determined the motorist was the legal cause of the plaintiff’s damages and awarded the plaintiff $17,000.00, entering final judgment in the plaintiff’s favor. GEICO moved to setoff the verdict by the motorist’s $25,000.00 policy limits, pursuant to Fla. Stat. § 627.727, and moved to amend the final judgment to find in favor of GEICO. 

The trial court found that under Fla. Stat. § 627.727, an underinsured motorist carrier is entitled to a setoff in the amount of benefits available to its insured under the underinsured’s liability policy. Therefore, because the motorist had coverage in the amount of $25,000.00 available to the plaintiff at the time of the accident, GEICO was entitled to a setoff and judgment in its favor. 

On appeal, the plaintiff argued GEICO did not properly raise setoff as an affirmative defense and that GEICO failed to demonstrate the funds from the motorist’s policy were “available.” The court found that under Fla. Stat. § 627.727(6)(c), the carrier is “entitled to a credit against total damages in the amount of the limits of the underinsured motorist’s liability policy.” The court found the statute does not require the carrier to plead setoff as an affirmative defense and that GEICO properly asserted its right to setoff in a post-trial motion. Therefore, GEICO was entitled to the setoff. 

Additionally, the court found that a tortfeaser’s liability coverage is “available” to an injured insured even when no proceedings have been commenced and no benefits have actually been paid. Therefore, the court found that, in this case, the motorist’s insurance benefits were “available” to the plaintiff, even though he abandoned his claim for benefits and never received them. Therefore, the court affirmed the trial court’s rulings in favor of GEICO. 

_{Legal Update for Florida Coverage & Property Litigation – July 2024 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2024 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.}