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Offer of Judgment Invalid Where Insurer Required to Tender in Excess of Policy

In GONZALEZ v. CLAYWELL, 36 Fla. L. Weekly D1784a (Fla. 1st DCA August 15, 2011), the plaintiff issued a proposal for settlement to the defendant.  As background, the State of Florida Offer of Judgment Statute creates a right to recover reasonable costs and attorney’s fees incurred after a settlement offer is made when (1) a party has served a demand or offer for judgment, and (2) that party has recovered at trial a judgment at least twenty-five (25) percent more or less than the demand or offer. Dictiomatic, Inc. v. United States Fidelity & Guaranty Company, 127 F. Supp. 2d 1239, 1244 (Fla. 1999).

In the case at bar, the plaintiff suffered significant injuries in a vehicular collision and offered to settle her lawsuit for $240,000, if Gonzalez's insurance company, GEICO, tendered a check in the amount of $240,000 made payable to her. The offer was not accepted and, after a jury trial, the plaintiff was awarded a total judgment of $394,029.71, which was affirmed on appeal. Gonzalez v. Claywell, 24 So. 3d 1260 (Fla. 1st DCA 2009).

However, the Court found the plaintiff's proposal for settlement invalid and unenforceable. This is because it was impossible for Gonzalez to meet the conditions of the proposal. Specifically, the proposal required that GEICO, a nonparty, tender a check well in excess of its policy limits of $25,000, even though there has been no determination that GEICO is liable to pay more than its policy limits. The Court reasoned that because the proposal contained a condition that Gonzalez could not possibly perform, and divested him of independent control of the decision to settle, it was invalid and unenforceable.

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