There Was No Reasonable Dispute That Defendant Had Accepted And Agreed To Be Bound By The Terms Of The Offer.
In Newman v. Larios, Case No. G057542 (4th Dist., Div. 3 June 22, 2020) (unpublished), plaintiff sued two defendants for personal injuries he sustained when his motorcycle was struck by cars driven by defendants. After settling with one defendant, plaintiff presented the remaining defendant with a section 998 offer for $15,000 – the policy limit under defendant’s automobile insurance. Defendant’s counsel responded by letter stating that defendant’s insurance company accepted the offer for $15,000, and a request to proceed by way of Release and Dismissal with prejudice. Plaintiff, however, took the position that that litigation was not settled as defendant’s insurer was not a party to the action and, therefore, the 998 offer had not been accepted by defendant. Defendant then successfully filed a motion to enforce the settlement. Afterward, defendant filed the offer and acceptance, and judgment was entered against him in the amount of $15,000. Plaintiff appealed.
In an opinion authored by Justice Fybel, the 4/3 DCA affirmed – concluding that there was no reasonable dispute that defendant’s counsel was accepting the offer on defendant’s behalf and that defendant would be bound by the terms of the offer. Plaintiff was aware that defendant’s defense was provided under his automobile insurance policy, and that $15,000 represented defendant’s policy limits. Insurer had the right to settle for policy limits without defendant’s consent and had a duty to accept a reasonable settlement offer on its insured’s behalf.
To be sure there was no ambiguity as to where the appellate panel stood regarding this appeal, the 4/3 DCA had this to say, “There is no question [plaintiff] was ready and willing to settle the lawsuit and avoid a trial for payment of $15,000 – after all, [plaintiff] made the section 998 offer. The offer was accepted, meaning the lawsuit was resolved, trial was avoided, and court resources could be reserved instead for those cases that do not resolve through compromise and settlement. Technically speaking, State Farm, was not the party to the lawsuit, but to try to exploit that technicality, when the acceptance was signed by counsel for [defendant], is pure gamesmanship which we reject.”