Modifications To An Insurance Release Function As A Counteroffer

Modifications To An Insurance Release Function As A Counteroffer

Scratching Out Name On Release Is A Counteroffer


Insurance Bad Faith

In the case of Basner v. Bergdoll, Case Number 1D19-562 (Fla. 1st DCA October 23, 2019), Florida’s First DCA held that a handwritten modification to an insurance release was a counteroffer and that a settlement was not made.


Facts

This case arose out of a 2017 car accident. The insurance company for the Bergdolls’ tendered policy limits of $50,000 along with a release of all claims in an attempt to settle. The Basners scratched out one of the Bergdolls’ names on the release (the driver), held onto the check instead of cashing it, and attached a handwritten note that said “Do we have to release the driver?”

The insurance company did not respond after receiving this. Months later, another attorney for the Basners returned the check and notified the insurance company that they would be pursuing litigation. The insurance company claimed that there was a settlement.

In the lawsuit, the insurance company moved for summary judgment trying to enforce the settlement. The trial court granted the summary judgment for the insurance company finding that a settlement had been effectuated.


Modification Was Considered A Counteroffer

Settlement agreements in Florida are considered creatures of basic contract law. In this particular case, it was clear that scratching out a name on a release functioned as a rejection of the original offer and a counteroffer since a new term was added.