GEICO escapes Rule 11 sanctions in coverage litigation


GEICO GENERAL INSURANCE COMPANY v. Hampel, Dist. Court, SD Florida 2012 – Google Scholar.

 

GEICO has avoided Rule 11 sanctions in a complicated coverage battle because the defendant did not comply with the requirements of Rule 11.  GEICO and Hampel became involved in coverage litigation in state court.  The issue was whether Hampel was entitled to uninsured motorist coverage.GEICO then filed a new lawsuit for declaratory judgment in federal court.

A declaratory judgment lawsuit asks the court to interpret a contract, here an insurance policy.  GEICO wanted the federal court to say that it had no duty to provide coverage to Hampel.

The federal court dismissed the GEICO complaint on the ground that it would abstain from getting involved in the state court lawsuit.

Hampel then moved for Rule 11 sanctions, which were denied.  Hampel did not comply with the requirements of Rule 11:

The plaintiff contends that the defendant is not entitled to Rule 11 sanctions because she did not comply with the provisions of subsection (c)(2). The defendant did not file the instant motion for Rule 11 sanctions, directed at the complaint, until after the complaint was dismissed and never served it on the plaintiff prior to filing. As a result, the plaintiff did not have the opportunity, mandated by the Rule, to withdraw the complaint. Failure to give the opposing party the 21-day “safe harbor” provision forecloses relief under Rule 11Marcot v. Prem, Inc., 208 Fed. Appx. 781, 786 (11th Cir. 2006)In re Pratt, 524 F.3d 580, 586-88 (5th Cir. 2008). Courts consistently have held that “strict compliance with Rule 11 is mandatory.”Pratt, 524 F.3d at 588.”

Comment: courts are always reluctant to sanction litigants, and those seeking sanctions must comply with every requirement.

Edward X. Clinton, Jr.

www.clintonlaw.net

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