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Eli Villareal Alvarez – a Progressive Insured – collided with Heather Eres’ vehicle in May 2007, causing his vehicle to collide with an oncoming train. Eres suffered permanent injuries while her son was killed and Villareal later pleaded guilty to the manslaughter of DUI.
Progressive was notified of the collision four days after the collision, and the next day the insurer offered both Eres and her son’s estate its maximum personal injury limit of $ 10,000. Eres’ attorney told Progressive that she was not ready to take the payments until Villareal’s criminal proceedings were completed and the son’s estate representative was appointed. Progressive continued to prosecute throughout the criminal case, saying it was “ready to hand out the checks” [Eres’s counsel’s] Direction.”
Almost two years later, Progressive received a message from Eres’ new attorney, Peter Macaluso, about a settlement warrant that made multiple motions. These inquiries included: that Progressive was providing information about insurance coverage under Florida law and an affidavit from Villareal stating that he had no other insurance coverage; A refund of $ 650 for Eres’ son’s personal effects lost in the crash; a release that was only released by Villareal and that contained no liability or exemption provisions.
Progressive then contacted Katherine Shadwick, Villareal’s representative, to prepare an answer to the settlement. Shadwick gave Macaluso all of the requested information, payment details and documentation, as well as a publication that only Villareal published.
While Shadwick announced to Macaluso that she believed Villareal and Progressive met the terms of the settlement, Macaluso found a problem. Days after the discussion, Macaluso alleged that he had found in the publication a harmless or compensation agreement which he believed constituted a rejection of the settlement offer. Shadwick disagreed with Macaluso’s testimony but agreed to remove the offensive language from the publication.
Eres later filed a lawsuit against Villareal in a state court and received over $ 10 million in judgment. The verdict was upheld on appeal and the Second District Court of Appeals dismissed claims that Progressive met all of the terms of the settlement. The court concluded that while the “proposed indemnities do not use the terms ‘indemnity’ or ‘indemnity'”, the phrase in which the claims to subrogation were released had “the nature of an indemnity or indemnity agreement”.
At that point, Eres filed a lawsuit against Progressive alleging the insurer acted in bad faith by failing to settle the claim within Villareal’s policy limits. The Eleventh Circle disagreed, however, and stated that Progressives had “actually acted quite the opposite”. It stressed that Eres was focusing on the language of the publication, which contradicted Florida’s “set of circumstances” examination which required the court to review Progressive’s actions before and after Shadwick sent the publication.