THE “ACCEPTANCE” OF A TIME AND POLICY LIMIT “OFFER” IS NOT BASED SOLELY ON AN AGREEMENT AS TO THE MONETARY TERMS
Andrew D. Stone, Esq. & Jesse L. Cohen, Esq. • Volume 3, Issue 4 April 2009

FACTS
On June 3, 2009, the 4th DCA rendered their opinion in the case of Grant v. Lyons, 34 Fla. L. Weekly D1114 (Fla. 4th DCA 2009). In Grant, the plaintiff was involved in auto accident and subsequently filed suit for personal injuries. The Defendant had an auto insurance policy issued by AIG with limits of $100,000.00.

After filing the Complaint, plaintiff’s counsel sent a 20 day time limit and policy limit demand letter to AIG. Prior to the expiration of the 20 days, AIG responded with a letter indicating that it agreed to pay the policy limit of $100,000.00. Enclosed with AIG’s letter was a General Release, a Hold Harmless Agreement, and a Stipulation for Dismissal.

Plaintiff’s counsel filed a written response to AIG’s letter wherein he indicated that he considered their response to his letter to be a counter-offer. He supported his position by citing the fact that the following additional terms that had not been previously agreed upon had been demanded of his client: 1) A provision that the plaintiff agree to release claims against defendants other than the insured; 2) A requirement that the plaintiff warrant that all hospital bills had been fully paid; and 3) A non-disclosure and confidentiality agreement.

Plaintiff’s counsel then set forth a counter-demand wherein he indicated that since his client’s
medical bills were approximately $250,000.00, he demanded that an additional $500,000.00 above the policy limit be paid to settle the case. In response to plaintiff’s counterdemand, AIG filed a motion to enforce the prior settlement for $100,000.00.

The trial court granted AIG’s motion based upon the authority set forth in Erhardt v. Duff, 729 So.2d 529 (Fla.4th DCA 1999)(Holding that the execution of a general release was implicit as part of the insurer’s tender of its policy limits since it would have made no sense for the insurer to do so if there remained a possibility that it could still be liable for further claims by the plaintiff arising out of the same incident).

ISSUE
The issue on appeal was whether AIG’s response constituted an acceptance or a counter-offer which plaintiff had the right to reject.

RULING
The 4th DCA held that AIG’s response constituted a rejection of the plaintiff’s offer to settle the case and a counter-offer which plaintiff did not have to accept.

The court cited Cheveri v. Geisser, 783 So.2d 1115 (4th DCA 2001) for the proposition that the acceptance of an offer which results in a contract must be absolute, unconditional, identical with the terms of the offer, and in the mode, at the place, and within the time expressly or impliedly stated within the offer. The court further noted that the burden is on the party seeking to enforce a settlement to establish assent by the opposing party. Nehleber v. Anzalone, 345 So.2d 822 (Fla. 4th DCA 1977).

In addition, the court cited Nichols v. Hartford Ins. Co., 834 So.2d 217 (Fla. 1st DCA 2002) wherein the 1st DCA held that without assent or the meeting of the minds as to the essential terms contained in an offer, there is no valid acceptance. Lastly, the court held that acceptances can turn into counter-offers either by adding additional terms or by not meeting the terms of the original offer.

The court provided some guidance by noting that the additional terms that were included in AIG’s letter constituted unusual terms which converted what AIG thought was an acceptance into a rejection and a counter-offer.

In comparison, the court cited Mercury Ins. Co. of Fla. v. Fonseca, 3. So.3d 415 (Fla. 3rd DCA 2009) where the 3rd DCA held that a usual term of a policy limits settlement would be a document that releases an insurance company from liability for claims arising from the same incident, particularly where the injured party is permitted to modify such a release.

CONCLUSION
Florida courts have identified the following to be “additional”, “essential” or “unusual” terms of a settlement agreement: hold harmless agreements, confidentiality agreements, indemnification provisions, and warranties of medical expense payments.

Accordingly, when tendering policy limits in response to a time limit demand, in order to include such terms without it being considered a rejection and a counter-offer, they should be previously discussed, agreed upon and/or clearly identified as being proposed terms which the plaintiff has a right to modify.

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