In Diana Pena v. Matthew Ryan Fox, 40 Fla.L.Weekly D 2573a (2nd DCA Nov. 2015), the Second District Court of Appeal reversed the trial court’s dismissal of the Plaintiff’s Complaint against Matthew Fox with prejudice based on a purported settlement agreement. The appellate court held that the trial court erroneously accepted that a settlement had been reached over the objection of the Plaintiff’s counsel.

Ms. Pena and Mr. Fox were involved in an auto accident in July 2013 in which Ms. Pena was injured. Prior to filing suit, Ms. Pena’s counsel served Mr. Fox’s insurer with a settlement demand for the liability coverage in exchange for a release in favor of Mr. Fox only.  The insurer drafted a proposed release for Ms. Pena to execute, releasing all claims only against Mr. Fox.  Ms. Pena declined to accept, or execute, the release prepared by the insurer which contained a hold harmless agreement in favor of Fox and the insurer against other claims; as she refused to release any claims other than those against Mr. Fox, as her attorney had conveyed that “any attempt to provide a release which contains a hold harmless or indemnity agreement which releases anyone other than Mr. Fox, and/or which releases any claim other than Ms. Pena’s claim, will act as a rejection of the offer.”

Mr. Fox’s insurer tendered a settlement check with the proposed release to Ms. Pena’s counsel that included the typical boilerplate paragraph in which Ms. Pena would acknowledge receipt of the settlement funds, and would “release, acquit, and forever discharge Matthew R. Fox his/her heirs, executors, and assigns, from any liability.” The proposed release also stated “I/we further state that while I/we hereby release all claims against Releasee(s) its agents, and employees, the payment hereunder does not satisfy all of my/our damages resulting from the accident… I/we further reserve my/our rights to pursue and recover all unpaid damages from any person, firm, or organization who may be responsible for payment of such damages, including first party health and automobile insurance, but such reservation does not include the Releasee(s), its agents, and employees . . .”

Ms. Pena’s counsel deemed this language in the proposed release as an attempt to expand the release to include Mr. Fox’s insurer, and rejected the coverage limit payment; and filed a law suit against Mr. Fox. Mr. Fox responded by filing a Motion to Enforce Settlement, asserting that the Complaint should be dismissed because it was barred by the settlement agreement. The trial court acknowledged the insurer’s proposed release did include additional language about Mr. Fox’s “agents and employees,” but rejected Ms. Pena’s concern about the effect of that language, finding that “the term “Releasee(s)” refers to Matthew R. Fox.”  The triual court held the release language was clear, and there was no “nefarious inclusion” of Mr. Fox’s insurer, and dismissed Ms. Pena’s Complaint with prejudice, and the appeal followed.

The Appellate Court noted that “like any contract, a settlement agreement is formed when there is mutual assent, and a “meeting of the minds” between the parties; a condition that requires and offer and acceptance supported by valid consideration.” Perkins v. Simmons, 15 So.2d 289, 290 (Fla. 1943).  This is a basic tenant of contract law.  Also, Florida law further requires that “an acceptance of an offer must be absolute and unconditional, identical with the terms offered.” Ribich vs. Evergreen Sales and Services, Inc., 784 So.2d 1201, 1202 (Fla. 2d DCA 2001).  In other words, the acceptance must be a mirror image of the offer in all material respects or it will be a counter-offer, thus rejecting the original offer.

The appellate court determined that the release the insurer delivered included parties beyond Ms. Pena’s original offer and it materially deviated from the limitation clearly expressed in Ms. Pena’s offer. Although the proposed release specifically released Mr. Fox, his heirs, executives, and assigns in the first paragraph, it then shifted its reference to “Releasee(s),” a term that was not defined in the release. Even assuming as the parties did that Mr. Fox, his heirs, executors, and assigns, and “Releasee(s)” are one and the same, the insurer’s release then went on to expand the latter term to include Mr. Fox’s “agents and employees,” who were also undefined and/or unidentified in the release. It was presumed by the appellate court that the inclusion of “agents and employees” referenced someone other than the “Releasee(s)” or Matthew R. Fox.  Although this phrase may have only been boilerplate verbiage, the court found that “agents and employees” was a new term, and was part of the insurer’s response to the offer, contrary to Ms. Pena’s explicit initial offer stating she would not agree to release any party other than Mr. Fox.

The appellate court also noted the insurer likely had no “nefarious” intention when it drafted the release, but that its intention was irrelevant to the issue. The making of a contract does not depend on the parties having intended the same thing, but on whether the stated agreement says the same thing. The words matter, because they will control who will, or who will not, be released. Mr. Fox’s proposed acceptance would release additional parties [Mr. Fox’s “agents and employees”] while Ms. Pena’s offer did not; so the acceptance would not mirror the offer.

Accordingly, the appellate court concluded there had been no “meeting of the minds” between the parties, and therefore no settlement agreement to bar Ms. Pena’s lawsuit and asserted claims.  The dismissal was reversed and remanded to the trial court for further proceeding.

It is critical that the parties have agreement on all substantial terms of settlement, and the insurer or its counsel is cautious in the use of boilerplate or standard form language on negotiated settlements.

-Andrea Zigelsky, Esq.