Careful What You Ask for: An Insurer [Progressive] Fails to Properly Accept a Time-Limited Demand by Seeking to “Clarify” if Another Party may be Added to the Release – by Robb Cruser

Last week, in Bennett v. Novas, the Court of Appeals ruled against an insurer that was attempting to settle a claim on behalf of its insured. Below are the operative facts:

June 30, 2020:  Claimant Luis Novas sent a 30-day demand offering to “resolve my personal injury claim against Ronda Bennett and [Progressive Insurance]” adding, “..I will release all claims I have against Ronda Bennett and [Progressive Insurance] subject to a limited liability release…”

June 10, 2020:  Progressive letter acknowledged receipt of the demand and asked: “Could you please clarify if John F. Bennett can also be named on the limited liability release?”

July 7, 2020:  Progressive letter “accepting” the demand, along with the settlement check and requested affidavit. Novas returned the check informing Progressive that “…it had failed to properly accept his offer because its request to add John Bennett to the release constituted a counteroffer.”

The Court of Appeals found that Novas’ offer “twice identified the only two parties against which he wished to settle his claims: Bennett and Progressive.” And Progressive’s question about adding another party “evinces that Progressive Insurance ‘wanted to negotiate…over the inclusion of [John Bennett] in the release,’ and it therefore constituted a counteroffer.” Thus, the Court affirmed the trial court’s denial of Progressive’s Motion to Enforce the settlement.