A Florida appellate court recently found that an insurers' inclusion of a hospital with potential lien rights as a co-payee on a settlement draft did not amount to a counteroffer to claimant's demand, and thus a valid settlement agreement had been reached. Marin v. Infinity Auto Ins. Co., 2018 WL 988335 (Fla. 3d DCA Feb. 21, 2018).

The claimant was injured in an automobile accident allegedly caused by the insured and received treatment at a local hospital. The claimant's attorney demanded that the insurer tender its policy limits by delivering the settlement draft to his office by a certain date. The insurer timely sent a letter to the claimant's attorney advising that it accepted the demand, enclosing a release and a $10,000 check made payable to the claimant, her attorney and the hospital. The insurer explained that the hospital was included as a payee on the check as it appeared to have a lien for medical services but offered to reissue the check if the lien was resolved. The claimant's attorney treated the settlement check as a counteroffer because it included the hospital as a payee and rejected the settlement payment. The claimant then filed a negligence suit against the insured. The insurer intervened to enforce the settlement agreement. The trial court granted the insurer's motion and dismissed the negligence action with prejudice subject to the terms of the settlement agreement. The claimant appealed.

The appellate court affirmed, finding that the insurer's response to the claimant's demand was an acceptance, not a counteroffer, thereby forming a valid settlement agreement. The appellate court explained that the demand contained only two essential terms to reach settlement, both of which the insurer met when it tendered a check for the full policy limits by the date specified in the demand. The appellate court noted that the demand did not state who should be included on the settlement check, only that a "settlement draft" be sent to the claimant's attorney's office by the specified date. The appellate court concluded that a valid agreement had been reached.

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