Florida law is clear that when it comes to ambiguity in auto insurance contracts, the disparity should be interpreted to favor the insured.

gavel21However, as the case of GEICO v. Ryan makes clear, ambiguity doesn’t always go in favor of a crash victim. Here, the ambiguity was contained not in the actual policy, but in a settlement proposal submitted by plaintiff to the insurer.

In a bid to secure uninsured/underinsured motorist coverage from her own insurance company following a crash, plaintiff submitted a proposed settlement that indicated a figure of $50,000, but spelled out the words, “one-hundred thousand dollars.”

That disparity may have cost her the case, according to the Fourth District Court of Appeals, which reversed the trial court judge’s ruling allowing a $200,000 jury verdict to stand. The appeals court ruled the difference created ambiguity and therefore, the settlement was unenforceable.

According to court records, after filing her lawsuit, plaintiff served defendant with a proposal for settlement. The proposed settlement was for $50,000, though the “one-hundred thousand” number was spelled out, followed shortly thereafter with the phrase, “shall not exceed $50,000.”

The case then proceeded to trial, and jurors awarded plaintiff $196,000. Plaintiff sought a motion for attorneys’ fees and costs.

At a hearing on that motion, the insurer argued the terms in the proposal for settlement weren’t consistent, thereby creating a “patent ambiguity,” which is an obvious inconsistency in the language of a written document. Plaintiff shot back that the policy limit for UM/UIM coverage was $50,000 and the company “knew exactly” what the proposal was for.

The trial court weighed the issue, and while noting “a little bit of confusion here,” he ruled the phrase “not exceed $50,000” clears up that confusion – as the figure appears twice and that was the policy limit. The court therefore ruled the proposed settlement was sufficiently clear and was not susceptible to more than one reasonable interpretation.

Trial court further noted the attorneys discussed the settlement, and the defense attorney was aware of the settlement proposal.

The court then entered a final judgment for plaintiff.

Defendant appealed.

In weighing the case, the 4th DCA noted the 5th DCA’s reversal of an automobile negligence case based on a proposed settlement that was ambiguous. In Stasio v. McManaway, the appellate court in 2006 noted insurer issued a proposal for settlement in which it offered to pay $60,000. However, the release attached to the proposal was for “fifty-nine thousand no/100 dollars.” Plaintiff rejected the proposal. Later at trial, jurors awarded her just $24,000.

Trial court granted attorneys’ fees based on the proposed settlement, indicating despite the typo, the amount was unequivocal. However, the 5th DCA reversed, finding the disparity created a patent ambiguity that required clarification or judicial interpretation.

The court ruled the same was true in this case, and that because all proposals have to be strictly construed, any that are ambiguous are therefore not enforceable. There was no basis in fact or law for trial judge to rule otherwise, appellate court ruled.

What this case drives home is the point that Florida car accident attorneys must be meticulous with every document and every detail in a personal injury case. Accident victims must only place their trust in experienced lawyers with proven success.

If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.

Additional Resources:

GEICO v. Ryan , March 11, 2015, Florida’s Fourth District Court of Appeal

More Blog Entries:

Midwestern Indem. Co. v. Brooks – UIM Coverage for Bicyclists, March 20, 2015, Fort Myers Car Accident Lawyer Blog