By: Jonathan Alvarez, Associate, West Palm Beach

Settlements arise as a result of an agreement between two parties. In theory, these agreements are contracts under the law. When an adjuster or defense attorney and a claimant’s attorney agree to settle a claim, it is understood that an enforceable contract has been created. However, simply agreeing to settle the claim is not exactly the same as settling the claim, and unforeseen circumstances may lead to problems in having the agreement being enforced at a later time.

Such was the case in Harden v. Kolb Enterprises, Inc., (OJCC# 14-014998, 1D15-0735) a recent 1st DCA decision. In Harden, the claimant’s attorney and the adjuster came to an oral agreement to settle the case. A few days later, the employer/carrier’s attorney sent the settlement papers, containing additional terms not originally discussed during the settlement negotiations. A month went by, and the claimant decided that she no longer wanted the settle the claim, and refused to sign the documents. A Motion to Enforce Settlement was filed by the employer/carrier, and the Court reasoned that the only explanation for the claimant’s change of mind was that she wanted to get additional medical treatment, and as a result refused to sign the settlement papers. The additional terms in the settlement papers were: 1) that all past and present medical benefits were being resolved, 2) that the right to medical care and treatment terminated upon execution of the settlement papers, 3) that the claimant indemnified and held the employer/carrier harmless from any medical bills, hospital charges, liens or subrogated claims of whatever nature, cost or expense, including but not limited to costs of defense and attorney’s fees for any such action or actions, including any liens, arising out of the injuries or damages sustained by the claimant, and 4) that the employer/carrier had 30 days to make payment on the settlement proceeds.

The First DCA affirmed the JCC’s findings, stating that the parties had agreed to settle the case, but only as to the terms discussed in the initial settlement negotiations. The JCC based his decision on an earlier case, Bonagura v. Home Depot, 991 So.2d 902 (Fla. 1^st DCA 2008), and a legal concept known as a “meeting of the minds.” “Meeting of the minds” refers to the situation where there is a common understanding among the parties as to the terms in the formation of a contract (agreement). In essence, the JCC found that like in the Bonagura case, any additional language in the written documents, not already agreed to, constituted a new offer to settle additional matters, and as such, the new offer did not need to be accepted. However, whether the additional terms are accepted has no bearing on the original, binding, oral settlement agreement. In the Harden case, because the adjuster and the claimant’s attorney never discussed the additional terms in the settlement papers, it cannot be said that a meeting of the minds had been reached as to those terms.

It is important to understand the implications of Harden, and its predecessor, Bonagura. The simple fact that an agreement to settle has taken place does not mean that the case has been settled. Ironically, all it means is that an agreement has taken place. There must be a common understanding between both parties as to each term before a court will enforce them. Unless each material term in the settlement agreement has been discussed and agreed to by both parties, a court of law will not enforce those terms as part of the settlement agreement. At the very least, certain steps can be taken to minimize the risk of having an unenforceable settlement agreement, especially when a shrewd claimant’s attorney can exploit such an opportunity. At a minimum, these items should be addressed between both parties and in writing:

1. That it is an overall settlement of the entire claim, to inlcude any and all other dates of accident with the employer;
2. When and how benefits end;
3. That the employer/carrier will prepare the settlement documents;
4. That any prior attorney’s fee liens or past fees owed to other attorneys are included in this settlement;
5. Whether subrogation liens are maintained or waived;
6. Whether there are any Medicare/Medicaid or MSA issues;
7. If there is an advance, that it comes out of the ultimate settlement, or how prior advances will be handled for repayment;
8. That the claimant will hold employer/carrier harmless for any unpaid unauthorized medical treatment, bills; and,
9. If permitted, the general release and effective date of resignation, and whether there is separate consideration required.

As always, if there are concerns, please contact one of us to assist with considerations for settlement, and securing an enforceable settlement contract.