Progressive American Insurance Company v. Randall Marc Heimler

Opinion

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FOURTH DISTRICT

PROGRESSIVE AMERICAN INSURANCE COMPANY, Appellant,

v.

RANDALL MARC HEIMLER,

Appellee.

No. 4D2025-1854

[September 9, 2026]

Appeal from the Circuit Court for the Nineteenth Judicial Circuit, Indian River County; Cynthia L. Cox, Judge; L.T. Case No. 312023CA000092XXXXXX.

Jessica M. Hernandez of Falk, Waas, Solomon, Mendlestein & Davis, P.A., Coral Gables, for appellant.

Matthew T. Moore of The Law Offices of Berman & Berman, P.A., Boca Raton, for appellee.

COATES, JR., HOWARD K., Associate Judge.

Progressive American Insurance Company (“Progressive”) appeals from the circuit court’s partial final judgment denying Progressive’s request for rescission of an uninsured/underinsured motorist (“UM/UIM”) policy that it had issued to Randall Marc Heimler (“Heimler”). Progressive showed Heimler had breached the policy by improperly settling his claims against the third-party tortfeasor without Progressive’s permission. However, the circuit court found Progressive had not proven it was prejudiced by the breach. We find no error and affirm.

Facts

Heimler was in a motor vehicle accident on April 30, 2022. Leon Kingston (“Kingston”) was the underinsured motorist also involved in the accident. Liberty Mutual Insurance Company (“Liberty Mutual”) insured Kingston subject to a $10,000 liability limit. Progressive insured Heimler subject to a $500,000 policy limit for UM/UIM coverage.

Before filing a lawsuit against Progressive, Heimler entered into a “Bodily Injury Release” with Liberty Mutual, agreeing to discharge Liberty Mutual from all claims in exchange for $10,000. Liberty Mutual deposited the funds into a trust account for Heimler’s benefit. After the settlement with Kingston’s insurer, Heimler retained new counsel, Berman & Berman.

Realizing Heimler’s prior counsel did not obtain Progressive’s consent and subrogation waiver, new counsel attempted to unwind the settlement. Berman & Berman sent Progressive a letter advising of the policy limit tender and seeking a waiver of subrogation rights so that Heimler could pursue a UM/UIM claim. Berman & Berman also sent Liberty Mutual a $10,000 check from the law firm’s trust account.

Heimler thereafter sued Progressive for UM/UIM benefits. Progressive answered and raised several affirmative defenses, including Heimler’s failure to obtain a waiver of subrogation/permission to settle pursuant to section 627.727, Florida Statutes (2023). Progressive later moved for summary judgment on the basis that Heimler had failed to obtain a waiver of subrogation/permission to settle. The circuit court denied the motion for summary judgment, finding there were genuine issues of material fact as to whether Kingston was insolvent and whether Progressive was prejudiced.

Upon Progressive’s motion, the circuit court bifurcated the proceedings.

The circuit court set a first trial to determine whether the release had been rescinded and whether Progressive had been prejudiced. It set a second trial to address the issues of negligence, comparative negligence, causation, permanency, and damages—if necessary.

During the first trial, Kingston testified, among other things, that she: (1) lived in Port St. Lucie with her husband and two kids; (2) was a hairstylist who owned her own company; (3) used to travel for her job to her clients’ homes in a cutaway chassis cargo van, which was totaled in the accident; (4) was no longer able to visit clients after the accident, because of her injuries; (5) had owned a second vehicle, a Toyota, with her husband, which they had sold in the same year for about $1,200; and (6) had purchased her mother’s Hyundai Tucson about a year after the accident for $7,000, subsequently sold it, and bought a used Buick LaCrosse for $5,500. Kingston further testified that her income was $19,926 in 2023 and was “probably 20 something” in 2024. She indicated that either she or her husband had used their car for DoorDash deliveries, which she estimated brought in an extra $2,000-$3,000.

Kingston also testified that her bank statement from April 10, 2023, to

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April 13, 2023, showed a $124,354.19 account balance and that the money had come from the $250,000 settlement that she had received because of her injuries in the accident. She stated that she used the settlement proceeds to pay lawyers, satisfy personal debt, and purchase her business for approximately $10,000.

Kingston’s testimony further revealed that her monthly bills were around $3,500 (e.g., private school for kids, cell phone, utilities), she had no credit card debt, and, after the accident, she had purchased her home in Fort Pierce after securing a mortgage. In 2022, she sold land in Vero Beach that she had owned since 2015, netting $60,000 from the sale, which money she used to help finance her living expenses after the accident.

Regarding her business, Kingston testified that in 2022 it brought in roughly $10,537, and the expenses to run the business, including the vehicle and supplies, totaled $8,000, resulting in a $2,500 profit. In 2023, the business made $12,681.90. In 2024, sales totaled $5,452.08. Kingston testified that she hoped to make $25,000 in 2025. Her testimony also revealed that over six months, she had saved $3,100 in cash to purchase a second used car for the family.

Importantly, Kingston estimated that, at the time of the trial, her business’s assets totaled roughly $9,000 (e.g., chairs, scissors, clippers) and that her expenses included cable, AT&T, clothing purchases for her children, health insurance, a $1,600 mortgage, car insurance, FPL, and tuition for her son’s schooling.

Kingston’s husband testified that he worked at Walmart earning $35,000 per year, had no other savings accounts, and owned a 2011 Buick LaCrosse worth roughly $5,000. He also indicated that the family set aside a few hundred dollars each paycheck to save towards another car. He likewise confirmed his wife’s testimony that they had received about $120,000 from the settlement, and that they had spent the money.

On these facts, the circuit court entered a “Partial Final Judgment Denying Recission [sic] but Finding Defendant Not Prejudiced due to Insolvency of Tortfeasor.” The circuit court found that no rescission of Heimler’s settlement had occurred, but that Heimler’s failure to obtain Progressive’s consent and subrogation waiver did not prejudice Progressive due to Kingston’s apparent and probable insolvency. This appeal follows.

Standard of Review

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“The lower court’s ultimate factual determinations during a non-jury trial may not be disturbed on appeal unless shown to be unsupported by competent and substantial evidence or to constitute an abuse of discretion.” Zupnik Haverland, L.L.C. v. Current Builders of Fla., Inc., 7 So. 3d 1132, 1134 (Fla. 4th DCA 2009) (citations omitted).

Analysis

Section 627.727(6)(a), Florida Statutes (2023), provides:

If an injured person or, in the case of death, the personal representative agrees to settle a claim with a liability insurer and its insured, and such settlement would not fully satisfy the claim for personal injuries or wrongful death so as to create an underinsured motorist claim, then written notice of the proposed settlement must be submitted by certified or registered mail to all underinsured motorist insurers that provide coverage. The underinsured motorist insurer then has a period of 30 days after receipt thereof to consider authorization of the settlement or retention of subrogation rights. If an underinsured motorist insurer authorizes settlement or fails to respond as required by paragraph (b) to the settlement request within the 30-day period, the injured party may proceed to execute a full release in favor of the underinsured motorist's liability insurer and its insured and finalize the proposed settlement without prejudice to any underinsured motorist claim.

§ 627.727(6)(a), Fla. Stat. (2023).

Here, the parties agree Heimler was required, as a matter of statute and contract, to obtain Progressive’s waiver of subrogation rights before settling with the tortfeasor but failed to do so.

Our case law has long held that an unauthorized settlement will bar recovery by the insured if the insurer is prejudiced by the settlement, and that a rebuttable presumption exists that such settlement does prejudice the insurer. See Am. Fire & Cas. Co. v. Sinz, 487 So. 2d 340, 341 (Fla. 4th DCA 1986) (“We believe that the proper view of the effect which an insured's unauthorized settlement with a third party tort-feasor has upon the uninsured motorists coverage is … that the insured’s nonconsensual settlement with the third party tort-feasor creates a presumption of prejudice to the insurer with the burden being cast upon the insured to show a lack of prejudice.”); accord Gen. Acc. Ins. Co. v. Taplis, 493 So. 2d

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32, 32 (Fla. 5th DCA 1986) (“Under Florida law, violation of a settlement provision voids coverage unless the insured can conclusively overcome the presumption of prejudice to the insurer.”) (collecting multi-district authority).

This rule is consistent with our supreme court’s holdings in cases in which the insured breached the contract by providing dilatory notice of a claim. See Bankers Ins. Co. v. Macias, 475 So. 2d 1216, 1218 (Fla. 1985) (“A notice of accident in most insurance policies is a condition precedent to a claim. … Such a condition [i.e., as is the settlement cooperation clause here, a condition precedent to coverage] can be avoided by a party alleging and showing that the insurance carrier was not prejudiced by noncompliance with the condition[.] The burden should be on the insured to show lack of prejudice where the insurer has been deprived of the opportunity to investigate the facts and to examine the insured.”)

The parties both point to this court’s precedent and suggest that the insured must show the “probable insolvency” of the tortfeasor to demonstrate that the insurer was not prejudiced. See Muth v. AIU Ins. Co., 982 So. 2d 749, 752 (Fla. 4th DCA 2008) (“The probable insolvency of the tortfeasor can be sufficient to overcome the presumption of prejudice.”). They argue about whether this is different from the “is and will remain judgment proof” standard in other districts. Cf., Scott v. Kirkland, 652 So. 2d 1281, 1282 (Fla. 1st DCA 1995) (“The insured must demonstrate that the tort-feasor is and will remain judgment proof.”); Argiro v. Progressive Am. Ins. Co., 510 So. 2d 635, 636 (Fla. 3d DCA 1987) (“[T]here [was] no reason to believe . . . that the tortfeasor was, and would remain, ‘judgmentproof .’”).

But we see that no new standards emerge from those opinions; those courts were simply explaining their reasoning. After all, we should not “read judicial opinions like statutes.” Loper Bright Enters. v. Raimondo, 603 U.S. 369, 426 (2024) (Gorsuch, J., concurring). “[A]n opinion is not a comprehensive code; it is just an explanation for the Court’s disposition. Judicial opinions must not be confused with statutes, and general expressions must be read in light of the subject under consideration.” Id. (citation and internal quotation marks omitted).

As explained above, the standard is whether the insurer was prejudiced by the non-compliant settlement, and the burden is on the insured to show an absence of prejudice.

In this regard, to measure prejudice caused by an insured’s unauthorized settlement, we consider whether, if the insured had

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complied with the policy, a reasonably prudent insurer would have approved the decision, or instead rejected the settlement and pursued a damages claim against the tortfeasor (expecting to come out financially ahead thereby).

Such a counterfactual “but for” inquiry is a common metric by which courts assess prejudice. See, e.g., Strickland v. Washington, 466 U.S. 668, 694 (1984) (“[T]he appropriate test for prejudice [is] … [t]he defendant must show that there is a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different.”). This approach is also consistent with our supreme court’s analysis from other cases involving non-compliance with an insurance policy’s requirements. See, e.g., Tiedtke v. Fid. & Cas. Co. of N.Y., 222 So. 2d 206, 209 (Fla. 1969) (“Nothing indicates that immediate notice would have prompted an earlier investigation. Also, the Company’s defense attorney admitted that either a written statement or deposition from every material witness had been obtained prior to trial. … Mere speculation that prejudice may exist will not suffice when lack of prejudice is clearly demonstrated.” (citation omitted)).

The Third District’s decision in Southeast Fidelity Insurance Co. v. Earnest, 395 So. 2d 230 (Fla. 3d DCA 1981), engaged in such a counterfactual prejudice analysis, explaining:

Based on the twenty year viability of a Florida judgment and the remote possibility that any debtor may eventually secure some funds with which to pay at least a part of it, the appellant argues that depriving a carrier of any judgment, however uncollectible, against any defendant, however insolvent, is necessarily prejudicial. Quite apart from the fact that its acceptance would completely negate the “noprejudice ” rule itself, as adopted in Bass, Kaplan and the earlier decision in this very case, this contention is so utterly contrary to common business sense and commercial reality as to be unworthy of any comment beyond summary rejection. A judgment against Mrs. Bradwell would not have been worth the paper it was printed on and no reasonable person would have expended the costs, let alone the attorney's fees, it would have required to get it. When Southeastern lost the opportunity to secure the judgment, it lost nothing. Under our law, a technical and illusory “loss” of this kind cannot result in the forfeiture of insurance coverage.

Id. at 231.

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A court has broad discretion in making a factually grounded determination whether an insurer would rationally choose to accept a settlement offer over pursuing a judgment against someone—no doubt at significant additional legal expense. The court may consider things like whether assets in the tortfeasor’s position would have been easily collectable or instead subject to homestead protection or bankruptcy exemption. The court may also consider factors that might cause an insurer to pause before paying lawyers to hunt them down. Specifically, such factors as whether an insurer may look at the difference between the expected cost of collections and the expected hypothetical collectable judgment and how that number compares to the actual settlement offer.

For example, in Earnest, the court found that the insurer would not have pursued collections because the costs of pursuing such judgment far outweighed the (de minimis) expected benefits. 395 So. 2d at 231. In other cases, it may be reasonable to expect an insurer to reject a settlement offer and instead pursue collections. See, e.g., Argiro, 510 So. 2d at 636 (affirming trial court’s decision where “the record shows that the tortfeasor was a college student with good grades, holding a part-time job,” and “he had both a checking and a savings account in addition to savings bonds”).

Here, although reasonable minds may disagree on the import of the evidence considered by the circuit court in reaching its decision, we cannot conclude that based on the evidence presented, no judge could have ruled as the circuit court did in this instance. See Canakaris v. Canakaris, 382 So. 2d 1197, 1203 (Fla. 1980) (holding that discretion is abused when no reasonable person would take the view adopted by the trial court).

As such, we conclude that the circuit court did not err in entering the partial final judgment denying Progressive’s request for rescission because, due to the tortfeasor’s insolvency, Progressive did not prove it had been prejudiced. Therefore, we affirm the partial final judgment.

Affirmed.

SHEPHERD and LOTT, JJ., concur.

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Not final until disposition of timely-filed motion for rehearing.