Lunas v. Cooperativa de Seguros Multiples de Puerto Rico
2012 Fla. App. LEXIS 19105, 100 So. 3d 239, 2012 WL 5373445 (2012)
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Rule of Law:
An acceptance of a settlement offer must be unconditional and identical to the terms of the offer. Any variation in the acceptance regarding an essential term, such as the method of payment or the identity of payees, constitutes a counteroffer, not an acceptance, and thus no enforceable contract is formed.
Facts:
- Julio Lunas's home suffered sinkhole damage, which his insurer, Cooperativa de Seguros Multiples de Puerto Rico, agreed was a covered loss under his policy.
- On September 10, 2010, Lunas's attorney sent a letter to the insurer offering to settle the claim for unspecified 'policy limits' and demanded payment within seven days.
- On October 7, 2010, the insurer responded by sending repair reports and a release to be signed in exchange for a $115,861 settlement check.
- Following a subsequent phone call, the insurer's attorney sent a letter on October 28, 2010, memorializing Lunas's new offer to settle for $115,861, contingent upon payment via two separate checks: one for $85,000 to Lunas and his mortgagee (Wachovia), and another for $30,861 to Lunas, his law firm, and a public adjuster.
- On November 12, 2010, the insurer's attorney responded by sending a single check for the full $115,861, payable jointly to Lunas, his mortgagee (Bank of America), his law firm, and the public adjuster.
Procedural Posture:
- Julio Lunas filed a breach of contract lawsuit against his insurer, Cooperativa de Seguros Multiples de Puerto Rico, in a Florida trial court.
- During the litigation, the insurer filed a motion to enforce a settlement agreement.
- The trial court granted the insurer's motion, determined that a valid settlement agreement existed, and dismissed Lunas's complaint.
- Lunas, as the appellant, appealed the trial court's order of dismissal to the District Court of Appeal of Florida, Second District, with the insurer as the appellee.
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Issue:
Does an enforceable settlement agreement exist when the responding party's purported acceptance alters the terms of the offer, such as by sending a single check with different payees than requested in a two-check settlement demand?
Opinions:
Majority - Casanueva, Judge.
No, an enforceable settlement agreement does not exist under these circumstances. For a contract to be formed, there must be a 'meeting of the minds,' which requires that an acceptance be unconditional and identical to the offer's essential terms. The court reasoned that settlement agreements are governed by the objective test of contract law, meaning the parties must have 'said the same thing,' not just 'meant the same thing.' The insurer's response of sending a single check with different payees was not an acceptance of Lunas's two-check offer. Instead, it was a material deviation that constituted a counteroffer. Because Lunas never accepted this counteroffer, no binding settlement agreement was ever formed.
Analysis:
This case reinforces the strict application of the common law 'mirror image rule' to the formation of settlement agreements. The decision clarifies that terms relating to the structure of payment—such as the number of checks and the specific payees—are essential terms, not mere formalities. By treating the insurer's non-conforming response as a counteroffer, the court affirms that any deviation from the offer's terms prevents a 'meeting of the minds.' This serves as a critical reminder for practitioners that absolute precision is required in offer and acceptance communications to create a binding settlement.
