A Florida appeals court recently ruled that while a state statute provides for the award of “reasonably foreseeable” damages resulting from insurer bad faith, a jury is not free to award such damages without any supporting evidence. United Auto. Ins. Co. v. Colon, No. 4D07-3281 (Fla. App. Ct. 4th Dist. Sept. 24, 2008).

The insured had sued her automobile insurer, United Automobile Insurance Company, for failing to pay her medical bills from an auto accident. United then consented to judgment on the medical bills and attorneys fees, and the case proceeded to trial solely on the issue of damages for the insurer’s alleged bad faith. At trial, the insured argued that she had suffered economic damages in the form of lost wages and damaged credit from failing to pay her bills, but “did not offer any evidence as to the dollar amount of any economic consequences suffered from the carrier’s bad faith refusal to perform its obligations under the policy.”

The jury nevertheless returned a general verdict for bad faith damages of $60,000. The trial judge upheld the verdict but the 4th District Court of Appeals reversed, noting that, under Florida law, “economic damages may not be founded on jury speculation or guesswork and must rest on some reasonable factual basis.”

For a copy of the decision, please click here.