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FL is Becoming Extremely Fastidious in Applying the Mirror Image Rule in Enforcement of Settlement

October 1, 2013

 Dear Ladies and Gentlemen:

This correspondence is in regard to two recent decisions by Florida state and federal courts regarding the mirror image rule and the determination of whether a settlement has or has not been entered into. See Villareal v. Eres, 38 Fla. L. Weekly D1959a (Fla. 2d DCA Sept. 18, 2013), Tomlinson v. Landers, 2009 WL 1117399 (M.D. Fla. April 24, 2009). Both cases, which are summarized below, show that Florida is becoming extremely fastidious in applying the mirror image rule; that any deviation from the claimant’s offer by the accepting party, however slight, will result in an inability to enforce a settlement.

Eres arose from a motor vehicle accident in which a vehicle was propelled into a moving train when rear-ended by another vehicle, causing death and severe injury to its two occupants (the “claimants[1]”). Following the accident, the claimants issued a time limit demand for policy limits[2] to the insurance carrier of the operator of the other vehicle involved in the accident (the “carrier”), requesting information and referring to restrictions on the nature of the release that the claimants would be willing to sign. The carrier timely responded to the demand with the required information, draft checks for the payment of its policy limits, and proposed releases.

The claimants responded with correspondence stating that the releases violated the restrictions specifically delineated in their demand, that the carrier’s response was a rejection of the initial offer, and that the claimant rejected the carrier’s counteroffer and would file suit against the carrier’s insured. In response to the complaint filed by the claimant, the carrier’s insured asserted an affirmative defense that the parties entered into a settlement agreement. The claimant denied that the parties entered into a settlement and filed a motion for partial summary judgment regarding same. At issue was whether the carrier accepted the claimants’ settlement offer and the parties entered into an enforceable settlement. The trial court granted the claimants’ motion for partial summary judgment. The remaining matters went to the jury, which awarded the claimants a judgment for $10,639,585.36. The carrier’s insured appealed.

The Court noted that, pursuant to contract law, the acceptance of an offer which results in an enforceable agreement must be (1) absolute and unconditional; (2) identical with the terms of the offer; and (3) in the mode, at the place, and within the time expressly or impliedly stated within the offer[3], and that the party seeking to enforce a settlement must establish that there was a meeting of the minds or mutual or reciprocal assent to certain definite propositions.[4] Therefore, the issue must be resolved by a close examination of the contents of the correspondence exchanged by the parties. The relevant portions of the claimant’s demand state that:

In exchange for the above, my clients, including the estate[,] have agreed to sign a general release of all claims against your insured. Because this claim is only against your insured my clients are unwilling to sign a release which releases anyone or any entity other than your insured. Also my clients agree to satisfy all valid liens out of the proceeds of the settlement. However, my clients cannot agree to a release which has a hold harmless or indemnity agreement in it. Please understand providing us with any release containing anyone or any entity other than the insured, or a hold harmless indemnity agreement, would act as a rejection of this good faith offer to settle this matter.

In its response to the claimant’s demand, the carrier tendered its policy limits[5] and provided the requested information and proposed releases. The proposed releases included the following language:

The undersigned reserve(s) their right to pursue and recover future medical expenses, health care and related expenses from any person, firm, or organization who may be responsible for payment of such expenses, including any first party health or first party automobile coverage, if so entitled. However, said reservation does not include the party(ies) released who is/are given a full and final release of all claims, including, but not limited to, past, present, or future claims for subrogation arising out of the above-referenced accident.

The carrier’s correspondence requested that the claimants advise if they required any changes to the release, and stated that “[w]e believe that we have complied with all of the requests outlined in your letter. Please notify us if there is any additional information you need to resolve these claims.” Six days later, the claimants advised the carrier that it had rejected their demand by enclosing releases that contained provisions referring to “subrogation claims”, which were in effect hold harmless/indemnification provisions.

The Court relied on a similar claim decided by the Fifth District Court of Appeal, which held that a claimant’s offer was acceptable only by performance, and therefore a carrier’s response which included releases that failed to meet the conditions contained in the claimant’s offer failed to accept the settlement offer by performance.[6] As the Court in that case held:

Performance was an essential requirement for the acceptance of Trout’s offer. Instead of performing, however, Geico proffered a release that did not just fail to meet the terms of Trout’s offer, it blatantly failed…. Geico’s offer to consider any release amendment and explanation Trout might suggest was inadequate and the disclaimer of “new terms” ineffective…. Geico’s offer (probably) to change the release was, at best, a promise to perform, which is not sufficient here to create a binding contract…. The language of the offer communicates how it is to be accepted.[7]

The Court held that in this case, the claimant’s offer to settle was an offer for a unilateral contract. The claimants conditioned the carrier’s insured’s acceptance on a specified performance—agreement with the exact terms of the releases that were contemplated in the offer. Therefore, for the offer to be accepted and a binding settlement to be established, the release had to meet the specifications in the offer. The carrier’s overture to alter the release language was insufficient to constitute an acceptance.[8] Thus, no binding settlement agreement was established, and the trial court’s granting of the claimant’s motion for partial summary judgment was affirmed.

Landers also arose from a motor vehicle accident. Following the accident, the claimants’ counsel wrote a letter to the insurance carrier of the operator of the other vehicle  involved in the accident (“MDIC”) demanding payment of policy limits, $100,000, in order to settle the claim. The following day, the claimants’ insurance carrier paid its $50,000 limit and agreed to waive its right to subrogation against the other party involved in the accident and his insurance carrier. Approximately five months later, the claimants’ counsel wrote to MCIC again, informing it of the claimants’ carrier’s payment and indicating that the claimants would consider MCIC to be acting in bad faith if it failed to tender its $100,000 policy limit within ten days. Six days later, MCIC tendered a check for $100,000, made payable to claimants, their counsel, and Medicare, and provided a proposed release.

The claimants rejected MCIC’s payment and returned the $100,000 settlement check because Medicare was listed as a payee. The claimants had requested that MCIC issue a check without Medicare listed as a payee, and indicated that they would resolve the Medicare lien directly with Medicare and would agree to hold MCIC harmless for any Medicare claims. Additionally, Plaintiffs’ attorney demanded that certain language contained within the release be removed as inappropriate.

Thereafter, the Centers for Medicare & Medicaid Services (“CMS”) wrote MCIC a letter indicating that Medicare had been advised that MCIC may have been a responsible payer for one of the claimant’s injuries, and that the Medicare Secondary Payer Act, 42 U.S.C. § 1395y(b)(2), may require MCIC to reimburse Medicare for conditional payments made on behalf of that claimant. MCIC then wrote to the claimants stating that because Medicare had a lien on settlement proceeds and because the Medicare Secondary Payer Act (“MSPA”) and Code of Federal Regulations provide that MCIC may be responsible for Medicare reimbursement, MCIC would not rely on a promise from claimants to satisfy the Medicare lien. MCIC offered to reissue the check as previously issued or to issue a check directly to Medicare for the amount of the lien. MCIC included a new release that omitted some, but not all, of the language that had been struck from the prior release. Claimants then filed suit, and MCIC moved to enforce the parties’ settlement.

The issue before the Court was whether an enforceable settlement agreement was established. The Court noted that in a case almost directly on point, the Florida First District Court of Appeal held that (1) the parties’ dispute over language contained in a proposed settlement release by an insurance company constituted a lack of assent to an essential term of the parties’ proposed settlement agreement; (2) the insurer’s tender of a settlement check within the time limits stated in the offer did not constitute completion of the settlement agreement; and (3) the insurer’s subsequent submission of releases without objectionable terms was a new offer that the plaintiffs in that case were not obligated to accept.[9]  In that case, the court determined the objectionable release language (an indemnification clause) was an essential term of the proposed settlement agreement and that there was no meeting of the minds between the parties because said language was not agreed upon.[10]

Based thereon, the Court found there was no meeting of the minds in this case. The terms of the release is an essential element of any proposed settlement. The claimants expressed concerns about the proposed release language in the first release, and the second release submitted by MCIC omitted some, but not all, of the language the claimants struck from the first release. Moreover, the claimants’ objected to the inclusion of Medicare as a payee on the settlement check. The Court found that this too was an essential term of the agreement because the claimants stated they wanted to resolve any Medicare liens on their own accord.

Consequently, the Court denied MCIC’s motion to enforce the settlement, finding that the essential elements of the settlement were not agreed to and therefore no settlement agreement was established.


We recommend that an increased emphasis be placed on training claims staff to identify conditions contained in settlement demands, not only to comply with the conditions set forth by the claimant, but also to ensure that the tender of the settlement, check and proposed release do not contain any additional terms not specified in the claimant’s demand. We further recommend that multiple layers of claims staff and supervisors painstakingly review each demand letter that is intended for acceptance in order to ensure not only that the conditions in the demand are complied with, but that no additional terms are being added.

If you have any questions or would like to discuss these issues, please do not hesitate to contact the undersigned at your earliest convenience.

Very truly yours,



[1] The injured party and decedent’s estate.

[2] The claimant also requested an additional $650 for property damages.

[3] Nichols v. Hartford Ins. Co. of the Midwest, 834 So.2d 217, 219 (Fla. 1st DCA 2002).

[4] Giovo v. McDonald, 791 So.2d 38, 40 (Fla. 2d DCA 2001).

[5] The carrier also included a check for the addition $650 requested.

[7] Id.

[8] See Knowling v. Manavoglu, 73 So.3d 301, 303 (Fla. 5th DCA 2011) (“For acceptance of an offer to bind the maker of the offer it ‘must be absolute, unconditional, and identical with the terms of the offer.’” (quoting Montgomery v. English, 902 So.2d 836, 837 (Fla. 5th DCA 2005))).


[9] Nichols v. The Hartford Insurance Company of the Midwest, 834 So.2d 217, 220 (Fla.Dist.Ct.App.2002).

[10] Id. at 219–20.

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