A reasonable jury could have found that a property insurer knew or should have known it was clearly liable to pay its insured the $50,000 policy limit in a case involving a bar fight gone wrong, culminating in a deadly shooting. Kinsale Insurance Company v. Pride of St. Lucie Lodge 1189, Inc., No. 22-12675, 2025 WL 1142094 (11th Cir. 2025), arose out of a fight between two groups of female patrons at the Pride of St. Lucie Lodge, which was operating as a bar and club. The lodge’s volunteer security personnel ushered the brawling patrons out of the facility (using separate exits for each group). The two groups nevertheless found each other in the back parking lot, continued fighting, and within fifteen minutes, two of the women shot another in the forehead, rendering her comatose. She died from her injuries the following year. The deceased’s estate sued the lodge on a theory of negligent security. The estate won a more than $3.3 million jury verdict. The lodge and the estate then sued the lodge’s insurer, Kinsale, for common law bad faith under Florida law based on Kinsale’s failure to make a settlement offer within the applicable $50,000 policy limit. The district court granted summary judgment to Kinsale, reasoning that it had no duty to initiate settlement negotiations because, viewed in the light most favorable to the non-moving parties, no reasonable jury could find that this was a case of “clear liability.” The Eleventh Circuit disagreed, reversed the entry of summary judgment, and remanded the case back to the district court for it to be tried to a jury.
Writing for the court, Judge Stanley Marcus set forth the relevant legal principles under Florida law governing bad faith insurance claims. An insurer handling the defense of a claim against the insured must act as a reasonably prudent person, with diligence and care in the investigation and evaluation of the claim. Bos. Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla. 1980). An evaluation of bad faith is an objective one, based on what the insurer knew or reasonably should have known at the time. “Where liability is clear and injuries so serious that a judgment in excess of the policy limits is likely, an insurer has an affirmative duty to initiate settlement negotiations.” Powell v. Prudential Prop. & Cas. Ins. Co., 584 So. 2d 12, 14 (Fla. 3d DCA 1991) (per curiam). In these circumstances, the financial exposure to the insured acts as a “ticking financial time bomb” and “[a]ny delay in making an offer . . . even where there was no assurance that the claim could be settled could be viewed by a fact finder as evidence of bad faith.” Goheagan v. Am. Vehicle Ins. Co., 107 So. 3d 433, 439 (Fla. 4th DCA 2012). The court explained that the word “clear” in terms of “clear liability” is synonymous with “obvious” and that the dictionary defines “obvious” as “easily discovered, seen, or understood,” which is consonant with the dictionary definitions for “clear.” Yet, the court cautioned, the question is not whether liability is 100% guaranteed—rather, the question is whether liability is a likely possibility.
Here, a jury could reasonably find that the lodge’s liability was clear before the estate sued the lodge, the court concluded. First, there was no question that the lodge had a duty to protect its patrons, including maintaining adequate security staffing to prevent foreseeable danger and taking reasonable safety measures, such as monitoring the parking lot if danger there is foreseeable. Second, liability was clear based on the facts that were known or should have been known to Kinsale:
- Concerns had been raised about the volunteer security guards that worked at the lodge and about the lodge’s back parking lot, which was dark and typically unmonitored.
- There was a different fight at the lodge several months before the shooting.
- One of the security guards was familiar with one of the shooters and knew that she had bragged to him in the past that she was “liable to shoot.”
- At least one of the guards was aware that it was best practice not to let two fighting groups out of the lodge simultaneously (yet this is what was done).
- The two groups of women continued fighting in the parking lot, with one woman suffering a laceration to the face when a shoe was used as a weapon.
- The shooters left the property to retrieve their car, which was parked down the street; returned to the parking lot; and, while in their vehicle, fired five rounds through the front windshield of the decedent’s car. The decedent was struck in the forehead, remained comatose for a year, and then died, and Kinsale was aware of the catastrophic nature of the injuries.
- Only fifteen minutes elapsed between the time the groups were removed from the lodge and the shooting.
The court further explained that a conclusion of clear liability was bolstered by the expert reports submitted in the case. And there could be no dispute that Kinsale knew the damages greatly exceeded the $50,000 assault and battery policy limit.
The Eleventh Circuit rejected Kinsale’s argument that certain evidence would have precluded a jury from reasonably finding that liability was clear. First, as for Kinsale’s argument that the shooting did not occur on the lodge’s property and took place after the lodge had closed, there was contradictory evidence, and even accepting these arguments, the shooting still took place within a foreseeable zone of risk. Second, Kinsale’s argument that the women involved in the shooting were trespassers was factually disputed, and even if true, the lodge could have been liable for gross negligence if it knew the decedent was in the parking lot it had turned her to when the shooting occurred. Third, even if the shooters left the property to get their car and then returned, the events still occurred spatially and temporally within the foreseeable zone of risk. Fourth, that the decedent was attempting to leave the parking lot when the shooting occurred did not make a difference, nor did the fact that the patrons had been drinking alcohol somehow relieve the lodge from liability since it served the alcohol.
Thus, the court concluded that the case must be sent to a jury for it to decide whether, based on the totality of the circumstances, Kinsale acted in bad faith.
Former justice of the Florida Supreme Court, Judge Barbara Lagoa, authored a dissenting opinion, in which she disagreed about the clarity of Florida law regarding when an insured’s liability is clear for purposes of determining when an insurer is obligated to initiate settlement negotiations. Judge Lagoa would have certified to the Florida Supreme Court the question of whether a reasonable jury could conclude that liability was clear and Kinsale had a duty to initiate settlement negotiations pursuant to Powell v. Prudential Property & Casualty Insurance Co., 584 So. 2d 12 (Fla. Dist. Ct. App. 1991). Judge Lagoa also disagreed with the court’s conclusion that a reasonable jury could find this to be a case of clear liability.