In Fla. Peninsula Ins. Co. v. Brunner, Case No. 3D15-1677 (Fla. 3d DCA June 8, 2016), Florida Peninsula Insurance Company (FPIC) served a proposal for settlement to its insured in the underlying case. The insured rejected the proposal. At trial, the jury rendered a verdict for FPIC. As a result, FPIC filed a motion for attorney’s fees based on a proposal for settlement. The proposal for settlement included the following requirements:

(a) This Offer of Judgment/Proposal for Settlement is to hold harmless FLORIDA PENINSULA INSURANCE COMPANY, from any and all existing, or potentially existing, liens or other claims which any person or entities may have on the damages sought in the lawsuit arising out of the Plaintiff, ANN BRUNNER’s claims or potential claims in this case.

(b) It is agreed upon by ANN BRUNNER and his [sic] respective counsel that all known liens, attorney charging liens or other claims of third parties, will be satisfied and extinguished by ANN BRUNNER and his [sic] counsel.

The proposal, attached release, and notice of service did not indicate that the insured’s counsel was required to execute or assent to the terms in the proposal. However, the trial court was concerned that paragraphs (a) and (b) required the insured’s counsel to accept responsibility to FPIC for other claims of third parties. Thus, the trial court denied FPIC’s motion for attorney’s fees. FPIC appealed.

On appeal, the Third District agreed with the trial court’s concern and affirmed the order denying attorney’s fees. The Third District explained that a “proposal must be drafted so that the offeree has the ability to evaluate and independently act to resolve the case against her.” Here, paragraph (b) purported to require the insured’s attorney to agree to satisfy and extinguish “other claims of third parties.” Yet, the proposal did not contain a signature block or other provision to indicate the insured’s attorney’s agreement to these terms. As a result, not only was paragraph (b) ambiguous, but it also may have exposed the insured’s attorney to other claims of third parties.

Drafting an enforceable proposal for settlement can be tricky. While the intent of this proposal was to protect the carrier from unsatisfied liens, inclusion of a requirement of the Plaintiff’s attorney made it unenforceable. It is important to ensure that the proposal only required action from the opposing party – and no one else.

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