Additional Insurance Disclosure Voided Settlement

In the case of Fundora v. Dangond, Case Number 3D22-1749 (Fla. 3rd DCA May 1, 2024), Florida’s Third DCA held that when Progressive disclosed an additional policy of insurance that could have provided coverage to the Plaintiff, then the previously reached settlement for policy limits was void and unenforceable.  The Plaintiff’s demand (or offer of settlement) had a specific condition of settlement that required disclosure of all policies of insurance.

Facts of the Case

This case involved a car accident where Dangond and a vehicle owned by a co-defendant struck Fundora’s vehicle resulting in injury.  During the litigation of that case, the Plaintiff sent a demand to Progressive (who insured Dangond) requiring disclosure of all policies of insurance pursuant to 627.4137, Fla. Stat.  Progressive responded by disclosing a policy of insurance covering Dangond.  The insurance disclosure certified that it was “true and correct.”

Thereafter, the Plaintiff offered to settle and, in doing so, requested disclosure of additional known policies.  Such offer was contingent upon no other known policies of insurance.

On the same day that Progressive accepted the settlement demand, it disclosed an additional insurance policy applicable to a co-defendant.

The Third DCA reversed the trial court (which had upheld the settlement) under the circumstances and held that the settlement was unenforceable.

Saving Grace of Asking For Additional Policies

It is standard practice for personal injury attorneys in Florida to make a request for policy information at the beginning of a personal injury case.  Florida law requires insurers under section 627.4137, Fla. Stat. to provide policy information, including the applicable policy limits, other known policies to which coverage may apply, and whether there is any sort of a coverage defense known to the insurer.

It also standard practice for personal injury attorneys in Florida to condition a settlement in a demand letter to the disclosure of coverage made by the insurer in some way.  It is not always done in the manner described in this case, however, it is widely understood by both plaintiff and defense attorneys that the disclosure of coverage under section 627.4137, Fla. Stat. is going to be used in a demand and, in particular, to judge how much insurance can be demanded.  It is axiomatic that either an amended insurance disclosure or the failure to include information that would have been required pursuant to 627.4137, Fla. Stat. in the original insurance disclosure would be grounds for a plaintiff who relied upon such information to void a settlement reached on insufficient information

The fact that the co-defendant sought to benefit from Progressive’s error under the circumstances and defended an appeal is actually quite astonishing considering recent efforts in the Florida Bar to increase the level of professionalism among attorneys.  Considering that the settlement demand was accepted the same day as the additional disclosure was made, it is likely that the information was known before the acceptance was made.  In any event, the settlement was held to be unenforceable.  What we are not aware from the appellate opinion is how the case will finally end.  We can assume that more settlement funds are going to be demanded and more paid, however, coverage under the additional policy disclosed may not be so clear, particularly since it was a corporate policy.  Issues such as course and scope of employment will come into play as those issues are finally determined.

Get A Consultation About Your Case

At Russo Law, we can help you with your Florida personal injury case.  This case outlines a number of things that you get when you hire an attorney for your case.  Call us today to schedule a free consultation with a Lakeland car accident lawyer to discuss your particular case.