I GOT HIT – NOT MY FAULT – HOW COULD I END UP OWING MONEY?

There are people driving around Tampa Bay who have allowed their insurance to lapse.  There are people driving in Tampa Bay who never had enough insurance in the first place.  I will get into that further in another article.  In this article, I discuss how it is that some people end up owing money even where they didn’t cause the accident and they had plenty of insurance that was supposed to protect them.  Florida litigation cases can result in you owing money to the other side even when you are not at fault for the accident.  This is because of something called a Proposal for Settlement.  Due to the Rules in Florida, it is very important that you have an experienced attorney to guide you through your case.  Proposals for Settlement and Offers go back and forth in civil cases in Florida.  They go back and forth between the insurance company and the attorney who is representing you for your injuries.  Having an attorney who is personally involved in your case is crucial to knowing when you should accept or reject a settlement offer from the insurance company.  As Kenny Rogers said, “ you gotta know when to hold ‘em, know when to fold ‘em, know when to walk away . . .”

This article gets a little technical and so if you would like to save yourself the time of reading further, feel free to call (727) 669-2828 and one of our Attorneys can help you to understand why Proposals can leave you in a bad spot if you do not have the right attorney looking out for you.  The Attorneys at Perenich Law, including Steve Mortimer, can help you to understand the potential pitfalls of litigation in Florida.

In Florida, many cases settle without the need for an actual lawsuit.  The lawyers call this a pre-suit settlement.  In those cases, your attorney can make a “demand” to the insurance company.  This means that your attorney and his legal team have gathered all the relevant facts, data, documents, and bills and provided those to the insurance company.  In some cases, the insurance company makes an offer that you find acceptable (or at least not completely unacceptable).  If this happens you and your attorney can settle the case without having to file a lawsuit.

In some cases, this is the way to go as it will save you from all the time, expense, and frustration of going through a law suit.  However, there are cases where the insurance company makes no reasonable offer and you are basically forced to have your attorney file a law suit.  Once you are involved in a law suit, there are many rules and laws that apply that would not be relevant if you are simply in the process of obtaining a pre-suit settlement.

One example of a Rule that applies only in the context of a case that has ended up in a law suit is called the Proposal for Settlement Rule.  Proposals for Settlement can be a very effective tool to bring a law suit to an acceptable resolution.  Sometimes insurance companies don’t want to incur the risk of further expenses and damages on their side after a Proposal is filed by your attorney.  When used by a Plaintiff, it can create a fee arrangement such that the insurance company on the other side of the case has to pay your attorney for the time that he/she spends on your case.

When a plaintiff files a proposal for settlement, there are specific rules that must be followed in order to have the insurance company pay fees to your attorney at the conclusion of the trial.  If the Proposal is not accepted by the defendant and the Rules are followed correctly, you may be able to have the insurance company pay fees to your attorney.  Some of the Rules change from time to time.  For example, a relatively recent change states that it must be clear in the Proposal that the amount of money offered as a proposed settlement number are intended to put a complete end to the litigation.  In other words, that the money that the insurance company pays to you is intended to resolve everything that is being claimed as a part of the given law suit.  Other Rules have applied to Proposals over the last several years.  Some examples are as follows:

• A proposal shall be in writing and identify the applicable Florida law under which it is being made.  (typically F.S. 768.79 and Rule 1.442)

A proposal shall:

(2) name the party or parties making the proposal and the party or parties to whom the proposal is being made;

(3) identify the claim or claims the proposal is attempting to resolve;

(4) state with particularity any relevant conditions;

(5) state the total amount of the proposal and state with particularity all nonmonetary terms of the proposal;

(6) state with particularity the amount proposed to settle a claim for punitive damages, if any;

(7) state whether the proposal includes attorneys’ fees and whether attorneys’ fees are part of the legal claim.

There are further Rules about when a Proposal can be filed.  The timing is different depending on whether you are the plaintiff or the defendant.  Plaintiffs can typically file a Proposal 90 days after the Defendant is provided with a copy of the law suit (called a Complaint).

Also, if either side wishes to file a Proposal, it must be done at least 45 days before trial.

The law in Florida is designed to discourage people from exercising their right to a jury trial.  As mentioned, this can work to your benefit as a plaintiff.  If the insurance company refuses to accept a Proposal filed by your attorney and the jury decides to give more money than you and your attorney would have been willing to accept before trial, the Judge may end up telling the insurance company that they have to pay attorney fees, to your attorney, for time that they spent on your case.

The amount that the jury decides that you deserve must be at least 25% more than the amount that you and your attorney offered to settle for before the trial began.  There are various amounts that are added to and subtracted from the amount that the jury believes that you deserve (which is called the jury verdict).  But for purposes of simplicity, let me give you an example:

If you and your attorney file an official Proposal for Settlement for $10,000, then you are telling the insurance company that you are willing to end the law suit for $10,000.  Due to medical bills and fees, this might result in you ending up with $3,000.  The amount could be more and the amount could be less.  If the insurance company then refuses to pay the $10,000 and the case goes to trial, the jury will “return a verdict”.  This means that the people on the jury will write down on a piece of paper the amount of money that they believe that you deserve.  The jury can write down an amount that is a lot more or a lot less than $10,000.  The jury can give you no money at all.   The jury “deliberates” or makes their decision in a private room and typically no one is allowed to ask the jury why they gave a large amount of money or a small amount of money.  (the decision that the jury will ultimately make is very hard to predict because there are rules that prevent your attorney from giving the jury the whole story – in fact, in most cases, we are not allowed to tell the jury that the insurance company, as opposed to the individual driver who hit you in the accident, is the one that will end up paying for the damages at the end of the trial)

In some cases, the jury will give $13,000 or more after you and your attorney have offered to settle for $10,000 (via a Proposal for Settlement).  In those cases, the Judge may order the insurance company to pay for the time that your attorney has spent on your case.  This can end up meaning that the amount that you pay for your attorney’s services is lower than you originally anticipated.  In other words, you can end up getting more money, because most of the fees and costs for your attorney’s fees and expenses end up getting paid for by the insurance company.  In sum, the Proposal for Settlement can be a big benefit to you as a plaintiff.

On the other hand, a Proposal for Settlement that is filed by the insurance company, or their representatives, can present a major pitfall for you as a plaintiff in a law suit.  For example, if the insurance company files a Proposal for Settlement for $10,000 and then the jury decides to enter a verdict for $5,000, you, as a plaintiff, could end up owing money to the insurance company.  This is because the amount that the jury would have given in this example is at least 25% less than the amount for which the insurance company offered to settle the case via a Proposal for Settlement.  When this happens, the defense attorney (attorney for the other side) might end up attempting to collect their attorney fees and costs from you.  This would mean that while the jury leaves the court room, believing they have given you $5,000,  later the judge can say that you don’t get any of that money AND could even end up owing money to the other side.

Under the law, there are many facts and figures that go into calculating the “net judgment obtained”.  The net judgment obtained is the figure that the Judge uses to decide whether the amount to which you are entitled after the jury verdict is at least 25% more than the Proposal for Settlement that your attorney filed for you, or at least 25% less than the Proposal for Settlement that was filed by the defense attorney at the direction of the insurance company.

In sum, you need a good attorney to help you with all the ins and outs of the law in Florida. You need to know when to hold ‘em . . . know when to fold ‘em.  Feel free to call one of the attorneys at Perenich Law – 727-669-2828.  I’m Steve Mortimer and I’m happy to explain Proposals for Settlement or any area of your case.