Florida Appellate Court Rules Insurance Company Failed to Properly Execute Settlement Agreement on Behalf of Child Accident Victims

child's handsWhen it comes to children involved in car accidents, there are a number of special laws that apply to protect their interests. In the recent case of Allen v. Montalvan, et al., three children were injured in a car accident. The driver of the car in which the injured minors were riding was the grandmother of two of the children and the mother of the third. Unfortunately, the driver was killed in the accident. The other three passengers consisted of the mother and another minor child, both of whom suffered minor injuries in the accident.

Two days after the collision, the mother executed an agreement with a law firm to provide her family and her with legal representation, including the minor children injured in the accident. A term in this agreement provided the law firm with the right to handle legal claims on behalf of the minor children, including settlements. The law firm sent a letter to the family’s insurance carrier, requesting information about the policy’s coverage and limits. The insurance policy provided limits of $25,000 per person and $50,000 per incident.

The law firm had a discussion with the insurance carrier, the details of which are heavily disputed by both of the parties. According to the insurer, the employee with whom the law firm spoke said that the insurer would be tendering the policy limits to extinguish all bodily injury claims. She said the law firm requested two checks for $25,000 each, among other details. According to a lawyer at the firm, the conversation transpired differently. The insurer agreed to tender the full policy limit, but the parties did not discuss specific check and dollar amounts.

The insurer sent the law firm two checks in the amount of $25,000 each, which the law firm deposited in its trust account. The payments were eventually disbursed to the mother. Two years later, the law firm sent completed releases back to the insurer, each of which was signed by the mother and a witness. Roughly two weeks later, the mother, represented by new lawyers, filed a claim seeking damages for injuries sustained in the car accident. The mother claimed that the releases did not apply to the minors’ claims, only the grandmother’s and mother’s claims. More specifically, she noted that certain blanks in the release forms regarding the children’s releases were left blank. She alleged that this meant that the releases were not effective as to the minors’ claims.

On appeal, the Fourth District court concluded that the insurer, in good faith, left each space blank to allow the parties to determine the specific amounts payable to each minor. However, the insurer had an obligation to ensure that the settlement was effective and legally binding for the parties. Ultimately, the appellate court concluded that the settlement agreement was not executed effectively, and as a result, the mother was entitled to proceed with the second complaint seeking damages from the car accident.

When it comes to insurance companies and obtaining policy benefits, it can be difficult for victims to ensure that the insurer is playing by the rules and fulfilling its duties. At Lusk, Drasites & Tolisano, our dedicated car accident lawyers have substantial experience assisting clients throughout Southwest Florida, including in Fort Myers, Cape Coral, and Naples, with obtaining insurance policy benefits and asserting their rights. To schedule your free consultation, call us now at 1-800-283-7442 or contact us online.

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