Mosley v. Progressive
December 5, 2018
A recent federal order highlights the cautionary tale of the importance of sending excess letters and explicit warnings regarding refusal to execute financial affidavits. On November 25, 2018, United District Court Judge Beth Bloom denied Progressive American Insurance Co.’s (“Progressive”) Motion For Summary Judgment in an action for first and third party bad faith over claims the national insurer exposed a policyholder to a $22.6 million judgment by failing to coax him to complete paperwork he opposed to complete due to his religious and moral beliefs.
The case styled Wallace Mosley, et al v. Progressive American Insurance Company, Case Number 14-CV-62850-BB in the U.S. District Court for the Southern District of Florida, arises out of an automobile accident that occurred on November 17, 2008 in Fort Lauderdale, Florida. Wallace Mosely (“Mosely”), an 11-year old boy, was operating a scooter when he entered a roadway and was struck by Progressive’s insured, Earl Junious Lloyd (“Lloyd”). Lloyd’s insurance policy with Progressive contained bodily injury limits of $10,000.00 per person, and a maximum of $20,000.00 per occurrence.
Progressive was notified of the accident upon receipt of a Fla. Stat. § 627.4127 request for insurance disclosure and letter of representation from the attorneys retained by Mosely’s great aunt on November 26, 2018. Progressive assigned the matter to claims professional Jishel Wyllie (“Wyllie”), who responded to the request, but did not advise of any coverage defense and failed to attach a copy of the policy. On December 1, 2008, Mosley’s attorney faxed an accident report to Progressive which indicated that Mosley was 11-years old and struck by the insured’s vehicle while it was “traveling at a high rate of speed.” Wyllie recorded in the claim notes that the accident report was not favorable to the insured.
Wyllie attempted to contact Lloyd, but could not reach him. On December 3, 2008, Progressive mailed a reservation of rights letter for Lloyd’s failure to notify. Progressive did not take any further action or deny coverage after sending this correspondence. On December 4, 2008, although no demand or medical records had been received, Progressive proactively initiated a full tender of the $10,000.00 bodily injury limits.
On December 9, 2008, Mosley’s attorney sent a time-sensitive counteroffer of settlement to Progressive requiring that Lloyd complete and return a 12-page financial affidavit within 14-days as a condition of settlement. Mosley’s attorney indicated that if Lloyd was to refuse to execute the affidavit, then a lawsuit would be filed. However, should the affidavit reflect no visible assets, the claim would be settled.
The Progressive claim notes indicate that Wyllie called Lloyd on December 17, 2008 to discuss the request for the affidavit, however, did not document any of the details of what was discussed. Wyllie testified that Lloyd advised her at that time he would not be completing the requested affidavit due to his religious and moral beliefs. The time-sensitive counteroffer correspondence was then set to Lloyd. However, Progressive did not send any type of excess letter to advise Lloyd of his exposure above the policy limits, nor did Progressive send a letter to explain to Lloyd the possible repercussions for his refusal to execute the affidavit or explain that the deadline for providing the financial affidavit to settle the claim was December 23, 2008. Progressive also did not notify Lloyd that it had determined he was at fault.
On December 23, 2018, Wyllie again followed up with Lloyd regarding the affidavit. At that time, Wyllie claimed Lloyd refused to execute the affidavit adamantly asserting he was immune from suit as a Sovereign Citizen of Moorish American Aborigine of Cherokee Indian decent and claimed that the affidavit was an invasion of his privacy. Claims notes made contemporaneously with the time and date of the conversation evidence the calls, however, the logs do not detail the specific content of the conversation. Lloyd later testified he did not recall a discussion with Wyllie where the importance of financial affidavits was explained.
In a letter dated January 5, 2008, Lloyd responded to the request for financial affidavits by executing a multi-page manifesto asserting he was a “Sovereign National Citizen” entitled to constitutional immunity and an ordained minister. In support of this document outlining the reasons for his refusal to comply, Lloyd also invoked Divine law and providence. The response was prepared by Lloyd’s “Moorish law counsel” Roderick Colebrook. At Lloyd’s specific request, Progressive forwarded this manifesto to Mosley’s counsel. On March 26, 2009, Mosley’s counsel called Progressive to follow-up regarding the affidavit. Wyllie suggested that Mosley’s counsel conduct its own assets search.
The matter was eventually referred to another attorney to file suit and pursue a bad faith claim. Progressive did not notify Lloyd that if he received a summons and complaint he should notify Progressive who would retain counsel at no expense to him. As a result, Lloyd turned to his Moorish Legal Counsel who prepared a pro se Petition for Dismissal. On June 11, 2009, Mosley’s counsel faxed Progressive a copy of the Complaint and the pro se response and advised of his opinion that Progressive had committed bad faith. Progressive then hired an attorney to represent Lloyd in the underlying case. A Final Judgment in the amount of $22,663,058.00 was entered against Lloyd together with attorneys’ fees and cost.
On October 18, 2017, Lloyd executed an “Agreement & Assignment of All Rights and Claims” in favor of Mosley. Lloyd later testified he did not recall Progressive explaining the significance of the request for financial affidavit to him. Lloyd further tesitifed that had he been informed before the deadline that by not executing the affidavit he was exposing himself to a substantial excess judgment against himself, personally, and that his belief of immunity may not protect him, then he would have completed the affidavit.
On Tuesday, following Florida federal court order denying Progressive’s Motion For Summary Judgment, on Tuesday, Progressive announced settlement. This case highlights the importance of sending an early excess letter to the insured and explaining the significance of insurance, employment, and financial affidavits and the potential and magnitude of an excess Judgment being placed against him/her/it personally. We hope that you found this case both helpful and insightful. Should you have any questions with respect to the foregoing, please do not hesitate to contact the undersigned.
Very Truly Yours,
JOHN BOND ATKINSON
TIFFANY A. BUSTAMANTE