By Jeffrey T. Donner, Esq.

The Florida Supreme Court’s decision in Ellison v. Willoughby, 373 So. 3d 1117 (Fla. 2023), is not just an insurance case. It is not just a personal injury case. And it is not just a “collateral source” case.

It is a lawyer case.

It is a case about what happens when a party has a potentially serious legal argument but does not properly tee it up in the trial court. It is also a case about what courts actually do with statutes when the words of the statute do not stretch far enough to cover the result a party wants.

That matters in real litigation. Not theoretical litigation. Real litigation, where millions of dollars can turn on whether the lawyer preserved the issue, cited the right statute, made the right argument, and gave the trial judge a fair opportunity to rule on the actual legal ground being asserted.

The facts were simple. The legal consequences were not.

Randy Willoughby was badly injured in a car crash. He sued Alberta Ellison, who was alleged to be vicariously liable as a co-owner of the other vehicle involved in the crash. He also sued his own uninsured motorist carrier for policy benefits and statutory bad faith damages.

Before trial, Willoughby settled with his UM carrier for $4 million. Then he went to trial against Ellison and obtained a $30 million jury verdict.

Ellison understandably did not want the $30 million judgment to stand without credit for the $4 million insurance settlement. So she moved for a setoff.

The problem was not that she wanted a setoff. The problem was how the issue was presented.

Ellison relied on Florida’s collateral source statute, section 768.76, Florida Statutes. But on appeal, a separate setoff statute—section 768.041(2)—became part of the discussion. That statute deals with releases or covenants not to sue given in partial satisfaction of damages.

The Florida Supreme Court said, in substance: not so fast.

Ellison had not preserved the section 768.041(2) argument in the trial court. Her motion was brought under section 768.76. Her supporting memorandum relied on section 768.76. Her argument at the hearing relied on section 768.76. The trial court’s order did not show that it was ruling on section 768.041(2).

That was fatal.

Preservation is not a technicality. It is the ballgame.

Lawyers love to say, “The judge knew what I meant.”

Sometimes that works. Often it does not. In appellate law, “close enough” is a dangerous place to live.

The Florida Supreme Court repeated the familiar preservation rule: a party seeking appellate review must have raised the specific legal ground in the trial court. The rule is not a “magic words” test. You do not always have to recite the exact statutory subsection like a robot.

But you do have to make the argument with enough specificity that the trial judge understands the issue being decided.

That did not happen here.

And this is the practical lesson: if two statutes are different, they need to be treated as different. Sections 768.041(2) and 768.76 both deal with reductions of damages awards, but they are not the same statute. They have different language, different history, different purposes, and different legal requirements.

A lawyer cannot rely on one statute in the trial court and then expect the appellate court to decide the case under another statute because both generally involve “setoff.”

That is not how preservation works.

The bad faith settlement was not a collateral source.

After disposing of the unpreserved section 768.041(2) issue, the Florida Supreme Court addressed the preserved issue: whether the $4 million settlement with the UM carrier was a collateral source under section 768.76.

The Court answered no.

The key point was that the settlement included statutory first-party bad faith damages. Those damages are not ordinary insurance “benefits.” They are not simply amounts owed under the policy. They exist because Florida law creates a statutory bad faith remedy.

The Court relied on prior Florida Supreme Court authority characterizing statutory bad faith damages as extracontractual and, in substance, a penalty. That matters because section 768.76 refers to collateral source “benefits,” including certain insurance benefits. A statutory bad faith recovery is not the same thing as a policy benefit.

That is a clean textual distinction.

The insurance policy may be the background relationship, but the bad faith claim is not merely a claim to collect the policy. It is a statutory claim for damages caused by the insurer’s bad faith conduct, including damages beyond policy limits.

So the Court held that a settlement payment made by a UM carrier to settle a first-party bad faith claim is not a collateral source under section 768.76(2)(a)2.

The Court did not bless double recovery across the board.

This is where the case can be misread.

The Florida Supreme Court did not hold that defendants can never obtain a setoff involving insurance settlements. It did not decide every possible setoff issue. It did not decide whether section 768.041(2) would have applied if properly preserved.

In fact, the Court expressly declined to decide the section 768.041(2) issue because it was not preserved.

That is a big difference.

Good lawyers pay attention to what a case actually holds, not what they wish it held. Ellison says a first-party bad faith settlement is not a collateral source under section 768.76(2)(a)2. It also says that if you want a setoff under a different statute, you had better make that argument in the trial court.

It does not answer every possible future setoff question.

This is why litigation judgment matters.

A lot of clients think litigation is about who is “right.” That is part of it, but it is not the whole game.

Litigation is also about procedure. Preservation. Timing. Framing. Statutory language. The record. The difference between a decent argument and an argument that is actually available on appeal.

A lawyer has to think about all of that before the hearing, not after the adverse ruling.

By the time a case is in the appellate court, the record is mostly frozen. If the right argument was not made below, the appellate lawyer may be stuck trying to turn a preservation problem into a merits problem. Sometimes that works. Often it does not.

And when the dollars are large, the consequences are very real.

Here, the setoff issue involved $4 million. That is not a footnote. That is not academic. That is real money.

The broader lesson for trial lawyers and referral counsel

For lawyers referring significant civil litigation matters, this case is a good reminder that serious cases need lawyers who understand both trial practice and appellate preservation.

It is not enough to be aggressive. It is not enough to be smart. It is not enough to have a general sense that the other side should not receive a windfall.

You have to identify the governing legal theory and preserve it correctly.

If the argument is statutory, cite the statute. If there are multiple statutes, argue each one separately. If the statutes have different elements, explain why each applies. If the issue may matter later on appeal, make a clear record.

Trial judges are not mind readers. Appellate courts are not rescue squads.

My takeaway

Ellison v. Willoughby is a good example of how civil litigation often turns on the intersection of substance and procedure. The defendant’s setoff argument under the collateral source statute failed on the text. The separate setoff argument under section 768.041(2) was not decided because it was not preserved.

That is the case in one sentence.

But the bigger lesson is this: in high-stakes civil litigation, legal precision matters. You do not want a lawyer who merely has a “theme.” You want a lawyer who understands how the theme becomes a motion, how the motion becomes a record, and how the record survives appeal.

That is where experienced litigation counsel adds value.

At Donner Law Firm, LLC, I handle civil litigation matters where the documents, statutes, procedural posture, and litigation strategy all matter. Those are often the cases where a careful legal analysis on the front end can save the client from expensive mistakes later.

And as Ellison shows, sometimes the most important issue in the case is not whether an argument sounds fair.

It is whether the argument was properly made.