Case Law Update – Third District Court of Appeal Holds That Putting a Lienholder on a Settlement Check as a Payee is not a Counteroffer where the Plaintiff’s Demand Letter Says Nothing About the Payees on the Settlement Check

March 12, 2018 by on News

In Marin v. Infinity Auto Insurance Company, the Third District Court of Appeal considered whether the trial court’s order enforcing a settlement was in error. The Court held that the trial court was correct in enforcing a settlement because the insurer’s act of placing a lienholder on the settlement check as a payee was not a counteroffer.

The Plaintiff’s attorney made a demand for the $10,000 bodily injury liability limit to settle Marin’s claim against infinity’s policyholder. Because Jackson Memorial Hospital had a lien for medical expenses it provided to Marin, Infinity placed in on the settlement check as a co-payee. It also sent a letter to Plaintiff’s attorney explaining that Infinity would reissue the check of the lien was resolved. Marin’s attorney rejected the tender of the policy limits claiming that there was no settlement, and Infinity filed a motion to enforce settlement.

The Third District held that the inclusion of Jackson Memorial on the check was not an “objectionable and unusual term” because there was uncertainty as to whether the hospital possessed a lien, a lien which Infinity was required to protect under Florida law. The Court also stated that because the demand letter said nothing about who could be included on the settlement check, Infinity did not make a counteroffer and there was an enforceable settlement. By tendering the full policy limits, Infinity accepted the demand as stated in the offer made by Marin.

The court noted several times that Infinity offered to have the check reissued if the lien had been resolved, and this seemed to be an important factor in its decision.

Jane Anderson
Shareholder / Practice Group Leader
Direct: 904.353.0952

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