The summer of 2017 was a hot time for appeals on proposals for settlement in Florida. In Dowd v. GEICO General Insurance Company (3D15-1725)(June 28, 2017), the Third DCA lets a plaintiff injured in a crosswalk accident off the hook for responsibility while the Fourth DCA in Sherman v. Savastano (4D16-2793)(June 21, 2017) ruled against “nitpicking” of terms in proposals for settlement.
Dowd v. GEICO
The plaintiff in Dowd was riding a bike across a pedestrian crosswalk when he was injured by an uninsured motorist. He made a UM claim with his own insurance company (GEICO). During the litigation, GEICO served Dowd with two separate proposals for settlement for “all of the claims for affirmative relief…in the [lawsuit] and all claims for affirmative relief which could have been raised as compulsory claims…” The release attached to the proposal for settlement purported to discharge just about all claims under the sun (as they almost always do).
Judgment In Favor Of Plaintiff Turns Into A Liability
At trial, the jury found that the plaintiff and the driver were each 50% responsible for the accident and awarded $110,000 for past medical expenses. The jury did not award future damages or pain and suffering. After setoffs for “collateral sources,” a judgment was entered in favor of the plaintiff for $5,000.
Thereafter, GEICO sought attorney fees and costs under the rule for proposals for settlement because the judgment was more than 25% LESS than what GEICO offered. At that point, the $5,000 judgment in favor of the plaintiff turned into a $45,000 judgment in favor of GEICO. The plaintiff may have one the battle but lost the war.
Judgment Reversed Because The Release Went Too Far
On appeal, the plaintiff argued that the proposals for settlement cannot be reconciled with the language of the attached releases. The Third DCA commented that the releases contained “noticeably broader language” than the proposal for settlement and, therefore, agreed with the plaintiff.
Rule Of Law And Reasons For The Decision
The rule of law arising from Dowd is that the plaintiff’s decision to accept or reject a proposal for settlement was affected by ambiguity created by releases that were significantly broader than the actual proposal itself. The Third DCA mentioned in its opinion that the release discharged even first party claims (such as PIP) against GEICO (who was a party defendant in the litigation because it was a UM claim). This is where it cannot be forgotten that UM claims are really contract claims even though the subject of the lawsuit is a car accident. As such, the UM carrier does not typically dispute coverage but, instead, only disputes the value of the plaintiff’s claim.
In Dowd, the plaintiff got off the hook for “losing” a trial, in my opinion, mostly because it was a first party case. Had the case been against a third party, then I would say that the result may have been far different. Again, the reason for this goes back to the idea that a UM claim is a contract and the lawsuit is only about the “value” of the plaintiff’s case. As such, any result in a UM case would not impact other benefits that the plaintiff had with GEICO.
On the other hand, a release of liability in a third party claim is virtually always a complete release of ALL liability (I say “virtually always” because there could be an exception somewhere out there). As such, a release of liabilty in a third party case that leaves some liability is not a very good release of liability. This is where the courts turn to “nitpicking” in Sherman v. Savastano.
Sherman v. Savastano
In Sherman v. Savastano, the Fourth DCA enforced a proposal for settlement against a plaintiff who “lost” a trial.
Savastano was injured by Sherman when Sherman struck Savastano who was walking in a crosswalk. The insurance company for Sherman served a proposal for settlement to Savastano for $200,000 with the catch that Savastano had to execute a “joint stipulation” to dismiss. Savastano did not accept the proposal for settlement and the case went to trial.
At trial, the jury found Savastano 75% responsible for his own injury but awarded $335,000 in damages. Thereafter, the judge made mandatory reductions for collateral source setoffs and comparative fault entering a judgment for $75,014.13. Just as in Down, the net judgment to the plaintiff was less than 75% of what was offered. As a “sanction” for losing the trial, a judge would normally substract the defense’s attorney fees and costs from the award to the plaintiff. Sometimes (as in Dowd), the net result is a judgment in favor of the defendant rather than just a reduced judgment to the plaintiff.
In any event, the trial judge decided to let Savastano off the hook but the first was not over. Sherman’s insurance company appealed the trial judge’s denial of a “sanction” for losing the trial.
Requirement Of A “Joint Stipulation” Was Considered ‘Nitpicking’
On appeal, the plaintiff made the same argument that was made to the trial judge that a settlement agreement (if the proposal had been accepted) required a “joint stipulation” for dismissal was ambiguous.
It is important to mention is that cases in Florida that settle are often ended by either a “joint stipulation to dismiss” or a “dismissal” from the plaintiff. They both accomplish the same thing with the only exception being that a joint stipulation is signed by the defense. It is customary practice in Florida with joint stipulations to dismiss for each party to bear their own attorney fees and costs just like when a case is unilaterally dismissed by the plaintiff. Even if there is a right to tax costs, no one does that because any such “value” would be included in the settlement figure anyway.
In their opinion, the Fourth DCA commented that “courts are discouraged from ‘nitpicking” settlement proposals for ambiguities, unless the asserted ambiguity could ‘reasonably affect the offeree’s decision’ on whether to accept [or reject] the settlement…” This is why the Fourth DCA said that the proposal for settlement requiring a joint stipulation to dismiss was “sufficiently clear” to allow the plaintiff to make an informed decision on whether to settle.
Won The Battle But Lost The War
Sherman is yet another example of a case where the plaintiff won the battle but lost the war. With hindsight considering that the jury found Savastano 75% responsible for his own injuries, the $200,000 proposal for settlement should have meant that the total value of the case was $800,000. Of course, Savastano would have needed to recognize that he was mostly responsible for his own injuries to realize this and accept the $200,000.
This is why the saying exists that a “bird in the hand is worth two in the bush.”
Get Help With Your Case
If you have a car accident case in Central Florida, you should talk to a personal injury attorney who is willing to have an honest discussion with you about the merits of your case. Likewise, you should also be willing to listen to the advice of a seasoned attorney rather than hire the attorney who promises you the moon. When it comes to hiring a personal injury attorney in Florida, there has never been more competition and it seems that attorneys will say just about anything to get you to sign up with them.
As a legal blogger, I put my heart and soul into the practice of law and into helping others with their problems. I learn through other people’s mistakes (through case opinions) and my own experiences in the courtroom. To get a consultation with me about the merits of your case, please contact me for a free case review to discuss your case.