Allen v. Montalvan, 2016 Fla. App. LEXIS 9595 (Fla. 4th DCA June 22, 2016), involved an automobile accident where six passengers, including three minor children, were injured, and the driver was killed. The mother of the children, who was also a passenger, obtained an attorney and he confirmed that the tortfeasor was insured through Progressive with bodily injury liability limits of $25,000 per person and $50,000 per accident.
Progressive mailed a letter to the mother’s attorney globally tendering the policy limits. Two checks made payable to the attorney’s trust account were enclosed, as well as a proposed release for each claimant. The release for the deceased was for $25,000; however, because of the uncertainty regarding the allocation of funds for the surviving occupants, Progressive left the amounts blank in the remaining releases. Two years later, the mother’s attorney returned the signed releases and a letter stating that all claims with regard to the settlement were released. The consideration amount on the mother’s release was filled in as $25,000 and each of the children were $0.
Shortly after returning the releases, the mother, represented by new attorneys, filed a complaint against Progressive’s insureds on behalf of the children. The defendants moved to enforce the settlement. The trial court conducted an evidentiary hearing and determined that the parties had entered into a binding settlement agreement and entered a final judgment in favor of the defendants. The mother appealed.
The Fourth District reversed because the trial court failed to comply with section 744.3025(1)(b), Florida Statutes. Based on the trial court’s finding that Progressive had globally tendered the $50,000 policy limit to settle the claims, the Fourth District explained that section 744.3025(1)(b) required the court to “appoint a guardian ad litem to represent the minor’s interest before approving a settlement of a minor’s claim in a case in which the gross settlement involving a minor equals or exceeds $50,000.”
Additionally, the Fourth District noted that Florida Probate Rule 5.636(d) compelled a similar finding because it also required the court to appoint a guardian ad litem on behalf of a minor for any proposed settlement totaling $50,000.
Accordingly, the Fourth District held that because the pre-suit settlement involved minors and totaled $50,000, the trial court was required to appoint a guardian ad litem to represent the minors’ interests before approving a settlement that would dispose of the minors’ claims. Even though Progressive left the amounts blank on the releases in good faith, it nonetheless had an obligation to ensure the settlement was legally binding. Because a violation of section 744.3025(1)(b) invalidates the settlement, the Fourth District reversed and remanded back to the trial court for further proceedings.
Accordingly, it is important on claims involving minor children where the total amount of all settlements is $50,000 or more that a guardian ad litem be appointed. This will validate the settlement and ensure that the settlement agreement is binding on all parties.
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Kansas R. Gooden
Board Certified Appellate Attorney
Appellate Practice Group Leader