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Florida Refuses to Offset Tort Damages with Bad Faith Damages from an \\nUnderinsured Motorist Insurer\\n\\nThe Florida Supreme Court was asked to resolve a certified question from\\n a lower court about whether a personal injury damages award must be \\nreduced by a payment the plaintiff received to settle a bad faith claim \\nagainst his uninsured motorist insurance carrier.\\n\\nIn Alberta S. Ellison v. Randy Willoughby, No. SC2021-1580, Supreme \\nCourt of Florida (November 2, 2023) the Supreme Court answered the \\nquestions posed.\\n\\nFACTS\\n\\nRespondent/plaintiff Randy Willoughby was badly injured in a car crash. \\nAfter the accident, he sued Petitioner/defendant Alberta Ellison, \\nbringing a vicarious liability claim based on Ellison\'s co-ownership of \\nthe other car in the crash. Willoughby also sued his own uninsured \\nmotorist insurance carrier to recover policy benefits and for statutory \\nbad faith damages. Willoughby and his insurer settled before trial for \\n$4 million. The subsequent trial against Ellison resulted in a $30 \\nmillion jury verdict for Willoughby. Ellison then asked the trial court \\nto set off the $4 million insurance settlement against the damages \\naward, but the court denied the motion.\\n\\nThe Second District Court of Appeal affirmed the denial of the set off \\nrequest. It also certified this two-part question as one of great public\\n importance.\\n\\nIs a settlement payment made by an uninsured motorist insurer to settle a\\n first-party bad faith claim subject to set off under section 768.041(2)\\n or\\na collateral source within the meaning of section 768.76?\\n\\nThe court answered no to both parts of the question, holding that \\nneither statute authorized a set off in this case. The Second District \\nexplained that, writing on a blank slate, it would have found Ellison \\nentitled to a set off under section 768.041(2), but it decided that the \\nSupreme Court\'s case law precluded that result.\\n\\nBased on the parties\' arguments and the Supreme Court\'s review of the \\nrecord, the Supreme Court determined that Ellison did not ask the trial \\ncourt for a set off under section 768.041(2) and refused to consider the\\n issue.\\n\\nThe Supreme Court rephrased the question posed to it to read: \\u201cIs a \\nsettlement payment made by an uninsured motorist insurer to settle a \\nfirst-party bad faith claim a collateral source within the meaning of \\nsection 768.76(2)(a)2.?\\u201d\\n\\nAlthough Willoughby sued his uninsured motorist insurance carrier both \\nfor the $10,000 limit allowed under his policy and for bad faith \\ndamages, his $4 million insurance settlement was undifferentiated (as to\\n claims and categories of damages). Subject to certain exceptions, \\nsection 768.76(1) mandates damage award reductions for sums that the \\nplaintiff has received from "collateral sources."\\n\\nThe Supreme Court noted that bad faith damages are not "benefits" for \\npurposes of the collateral source definition in section 768.76(2)(a)2.\\n\\nFirst-party bad faith claims like Willoughby\'s are a creature of \\nstatute, not of the underlying insurance contract between the parties. \\nIn particular, the damages recoverable in an uninsured motorist \\ninsurance bad faith claim are set out in a statute to be "the total \\namount of the claimant\'s damages, including the amount in excess of the \\npolicy limits, any interest on unpaid benefits, reasonable attorney\'s \\nfees and costs, and any damages caused by a violation of a law of this \\nstate."\\n