Breach For Failure To Pay Settlement Timely

Personal Injury

In the case of Michael Anthony Mortellaro, as PR for the Estate of Gloria C. Cooper, v. Caribe Health Center, Inc., Case Number 2D19-4473 (Fla. 2d DCA May 26, 2021), Florida’s Second DCA held that failure to pay a settlement agreement on time resulted in a material breach and further proceedings to enforce a final judgment.

Facts of the Case

This case started out as a premises liability case and evolved into a dispute over timely payment of the settlement. It appears that Caribe agreed to settle the plaintiff’s slip and fall case by payment of $100,000 if and only if 13 monthly payments were timely made. It also appears that failure to abide by the payments terms of the agreement would result in a $500,000 final judgment.

It also appears that Caribe was not timely on a number of payments and actions to cure a default were not properly made in time, however, the plaintiff still appears to have accepted such payments late and did not hold Caribe in default until the last $10,000 payment was made. At that point, it appears that a motion to enforce the settlement agreement was filed. At the hearing, the trial judge found that the tardiness was not a material breach of the settlement agreement and this appeal ensued.

On appeal, the Second DCA reiterated the agreement’s essential terms:

  1. Payment of $100,000 in total if and only if 13 monthly payments were timely made
  2. Due on the 9th day of each month
  3. If payment was not received within a 10-day cure period, the plaintiff had the option to declare a default and then seek full execution of a judgment in the amount of $500,000

The Second DCA thought that timely making 13 payments totaling $100,000 to avoid an additional liability for an additional $400,000 was not unfair as they reversed the trial judge and found that the failure to pay was a material breach.

Consent Judgment Settlement Can Be Dangerous

However, the real question in this case is why Caribe agreed to a settlement that it could ultimately pay but not do so timely. We cannot be sure whether this was disdain for the plaintiff’s claim or whether Caribe simply did not have the money. You would think that any settlement agreement that would put Caribe on such a financial edge would not have been voluntarily agreed to for a premises liability case. However, there were no reasons stated for the delays in payment described in the opinion. You would also think if Caribe simply did not have the money to pay then they would have negotiated more time to pay. But again, that appears not to have happened at a $400,000 price tag.

While we can only speculate as to why, the lesson from the court is that settlement agreements are to be taken seriously. If the court did not take this position, then defendants in personal injury cases could gain a slippery slope advantage in failing to pay or perform other conditions of the agreements themselves. This also means that both sides need to carefully read and consider the language in their settlement agreements as that language could very well come to fruition later.

Talk To A Lakeland Personal Injury Lawyer About Your Case

To be successful with your case, having a Florida personal injury attorney is recommended and, in a case such as this one, financial beneficial. If you or someone you know has suffered a personal injury, please give us a call for a free consultation to talk about your case.

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May 26, 2021