Opinion
No. 1D20-724
05-25-2022
Sinoeun KOUNG, Lorm Soun, and Leang Ve, Appellants, v. Michael GIORDANO and Melissa Chevalier, Appellees.
Raymond L. Roebuck and Brian M. Guter of O'Hara Law Firm, Jacksonville, for Appellants. Martin H. Sitler and Nelson E. Sierra of Law Offices of Ronald E. Sholes, P.A., Jacksonville, for Appellees.
Raymond L. Roebuck and Brian M. Guter of O'Hara Law Firm, Jacksonville, for Appellants.
Martin H. Sitler and Nelson E. Sierra of Law Offices of Ronald E. Sholes, P.A., Jacksonville, for Appellees.
Tanenbaum, J.
On appeal is a non-final order in which the trial court determined, as a matter of law, that there was no settlement agreement between State Farm Automobile Insurance Company ("State Farm") and Michael Giordano. Giordano suffered bodily injury and property loss in a crash between his motor scooter and a car State Farm insured. State Farm provided the insurance information and settlement amounts that Giordano demanded in consideration for his promise to release any claims arising out of the accident. The trial court nevertheless said there was no agreement, based on a single legal proposition: that State Farm's insurance information disclosure—which had been certified as being true by a claims manager "under penalties of perjury"—did not comply with the technical requirement in section 627.4137 that it be "under oath." This was error. While the trial court's conclusion is contrary to the statutory language, any technical compliance by State Farm with a preexisting statutory obligation also was not part of the parties’ bargain and, at all events, is not relevant to the question whether a settlement agreement exists. For the reasons that follow, we hold there was a valid settlement agreement and reverse.
I.
As we stated at the beginning, there was a crash between a motor scooter operated by Giordano and a car insured by State Farm. Giordano retained Ronald E. Sholes, P.A. ("Sholes Firm") to provide him legal representation as he pursued his insurance claim with State Farm after the crash. The Sholes Firm made initial contact with State Farm by making a "formal" request for disclosure of the information listed in section 627.4137, Florida Statutes. That provision requires a liability insurer to provide the information, upon written request of a claimant, in "a statement, under oath , of a corporate officer or the insurer's claims manager or superintendent." § 627.4137(1), Fla. Stat. (emphasis supplied). There is no dispute that State Farm provided the required information. In fact, it did so within about two weeks. The claims manager declared, "[u]nder penalties of perjury," that the information being provided "is true and correct." He took this approach rather than swear to the truth of the disclosure before a notary. No one from the Sholes Firm indicated to the claims manager that there was a deficiency in this disclosure.
Around the same time, a lawyer from another firm supposedly retained by Giordano sent State Farm a similar request under section 627.4137. State Farm's claims manager provided the requested information in writing within two weeks, again declaring "under penalties of perjury" that the information was "true and correct." None of the lawyers representing Giordano indicated to the claims manager that there was a deficiency in that disclosure either. Undaunted, counsel from the Sholes Firm the following month sent a letter both notifying State Farm that it had been "Re Retained" and making another request (that makes three on behalf of Giordano) for the information pursuant to section 627.4137(1). For a third time, State Farm provided the statutorily required insurance information to a lawyer for Giordano in a letter declared by the claims manager "under penalties of perjury" to be "true and correct." At this point, there still was no mention by any of Giordano's lawyers that the claims manager had failed to comply with section 627.4137 in his disclosure.
The same day that the second Sholes-Firm-insurance-information request (and Giordano's third request overall) went out, a lawyer from the firm sent a separate letter to the State Farm claims manager offering to settle Giordano's claim. The letter explained that Giordano's medical bills exceeded the bodily injury policy limit. The letter also detailed Giordano's property damage, including "the reasonable loss of his totaled ... motor scooter," and referenced an enclosed copy "of the fully executed title" to the scooter, "[a]s per our earlier conversation." According to the letter, Giordano wanted "to conclude all of his claims at the same time as soon as possible" and was "willing to accept the bodily injury limits of $25,000 if there is no excess or umbrella policy." The letter mentioned that "[w]e will, of course, need complete compliance with Florida Statute 627.4137 from your insured and State Farm." Then it made an offer, as follows:
If State Farm tenders the full bodily injury liability limit of $25,000.00 (and any applicable, umbrella or excess insurance policy limits), the property damage of $3,564.63 and the insurance disclosures by April 23, 2016, Mr. Giordano
will sign a general release of Sinoeun Koung, State Farm, and any other State Farm insureds. This an offer to enter into a unilateral contract that can be accepted only by performance.
The offer letter also specified that there should be two checks, one for property damage and one for bodily injury, and it provided instructions for how the checks should be made out. It concluded with the statement that "Giordano is certainly interested in concluding this settlement as soon as possible."
Within the time period set out in the offer, the claims manager responded by letter, stating that State Farm accepted the offer to settle as "outlined" by the Sholes Firm. The letter enclosed two separate checks, each complying with the instructions set out in the offer letter; it also "enclosed a release for your client's review and signature." The letter concluded with an instruction that "the original title of the scooter" be sent "with return of the release." Two weeks later, a lawyer from the Sholes Firm sent a letter to the claims manager, indicating that Giordano "has rejected your proposed settlement." The letter indicated that the two settlement checks were being returned, and it enclosed "a courtesy copy of the complaint," which had been filed with the trial court against State Farm's insureds the same day.
The parties do not dispute that the third disclosure by State Farm, mentioned above, went to Giordano under separate cover following his offer but prior to the checks being sent.
To be clear about who the parties are, Sinoeun Koung was a permissive driver of the car insured by State Farm. Lorm Soun and Leang Ve owned the car. Melissa Chevalier is Giordano's wife and sued for loss of comfort.
State Farm's insureds defended against the suit in part by averring that Giordano contracted with the insurer to settle the claim stated in the complaint. The parties filed cross-motions to have the trial court determine this issue as a matter of law. The trial court did. It read the "oath" requirement in section 627.4137 as necessitating administration of an oath pursuant to section 92.50, Florida Statutes, which requires a signature and the official seal of the officer or person taking the oath. The trial court noted that the claims manager's disclosures were stated and signed "under penalties of perjury," so it concluded that the disclosures did not comply with section 627.4137. Based solely on its determination that the disclosures were not statutorily compliant, the court concluded that State Farm had not fully satisfied Giordano's performance conditions. It adjudicated that there was no settlement agreement as a matter of law. This adjudication alone is what we must review in this direct appeal.
II.
The primary point of disagreement here obviously is the business about the "oath." The trial court interpreted section 627.4137 to require that an insurance disclosure literally be sworn before an officer authorized to take oaths, and State Farm's disclosures were not. On this basis, the trial court found there to be no settlement agreement. We start then by putting this simple textual matter to rest.
Read in isolation, section 627.4137 does seem to demand that a claims manager swear out his disclosure before a notary or other authorized officer, but the trial court failed to account for section 92.525, Florida Statutes. State Farm's insureds argue on appeal that pursuant to this latter statute, a document verified as being true "under penalties of perjury" qualifies as "a statement, under oath" for the purpose of satisfying the verification requirement in section 627.4137. They are correct.
The statute begins by making itself applicable whenever there is a legal requirement "that a document be verified by a person." § 92.525(1), Fla. Stat. It is true that section 627.4137 requires a disclosure statement to be "under oath," not "verified." Section 92.525, however, ends with what "verified by a person" means: a requirement "that the document [ ] be signed or executed by a person and that the person [ ] state under oath or affirm that the facts or matters stated or recited in the document are true, or words of that import or effect." § 92.525(4)(c), Fla. Stat. (emphasis supplied). Reading these two provisions together (i.e. , subsection one and paragraph four-c), we can see that section 92.525 applies whenever a law, rule, or order otherwise requires the truthfulness of information to be confirmed in writing "under oath." The requirement in section 627.4137 that certain insurance information be provided in "a statement, under oath, of a [specified person]" easily fits within this parameter.
Does this mean that the State Farm claims manager had the option under section 92.525 to self-declare the veracity of the information he was providing "under penalties of perjury" in lieu of swearing to it before a notary? That is precisely how the statute operates. In between the first and last sentences of section 92.525, the statute lists three ways that "the verification may be accomplished." § 92.525(1)(a)–(c), Fla. Stat. The first two ways involve an "oath or affirmation taken or administered" before certain specified officers, like a judge, clerk, or deputy clerk of any court of record; or by a notary public. § 92.525(1)(a)–(b), Fla. Stat.; see §§ 92.50, 117.03, Fla. Stat. The third way, however, dispenses with the oath requirement entirely and allows "the signing of the written declaration prescribed in subsection (2)" to suffice as an alternative means of "verification." § 92.525(1)(c), Fla. Stat. The claims manager's information disclosure required by section 627.4137 contained the signature and "penalties of perjury" language, in the proper location, as "prescribed in subsection (2)." All three disclosures provided by the claims manager, then, complied with the requirements of section 627.4137 because they were the statutory equivalent of being stated "under oath." The trial court, then, was wrong in its statutory interpretation, and its order rendered in reliance on that interpretation cannot stand.
III.
We now come back to the question that gives us jurisdiction in this case: Was there a valid settlement agreement between State Farm and Giordano? It should come as no surprise that settlements "are highly favored and will be enforced whenever possible." Robbie v. City of Miami , 469 So. 2d 1384, 1385 (Fla. 1985). We in turn look past the gamesmanship in which Giordano's lawyers appeared to have engaged and focus instead on applying basic contract principles to answer the question before us. See id. (noting that settlement agreements "are governed by the rules for interpretation of contracts"). These days, a contract simply is a promise, the breach of which has a remedy provided by law. RESTATEMENT (SECOND) OF CONTRACTS § 1 (1981). For there to be a contract, there must be "a manifestation of mutual assent to the exchange and a consideration." RESTATEMENT (SECOND) OF CONTRACTS § 17 (1981) ; see St. Joe Corp. v. McIver , 875 So. 2d 375, 381 (Fla. 2004) (noting that for there to be a contract, there must be an "offer, acceptance, consideration and sufficient specification of essential terms"). For a valid unilateral contract like the one proposed by Giordano, the "offer of a promise," made in return for an act to be performed, becomes the contracted promise if accepted through performance by the offeree/promisee. RESTATEMENT (SECOND) OF CONTRACTS § 24 cmt. a (1981). This is what we have here.
See Fla. R. App. P. 9.130(a)(3)(C)(ix) (giving the district court jurisdiction, pursuant to article V, section 4(b)(1), to hear an appeal of a nonfinal order determining as a matter of law that a settlement agreement "never existed").
Still, we consider whether a settlement agreement exists in this case with two things in mind: the "gotcha" game that the Sholes Firm lawyers seemed to be playing when they rejected State Farm's full performance based on a previously unannounced technicality; and the ancient origin of the modern cause of action for breach of contract. Apropos to the apparent circumstances before us, the action is the successor to the common-law writ of assumpsit (meaning "he promised"), which originally sounded in tort like an action based on deceit or other wrongdoing where a party suffered harm from reliance on another's promised undertaking. See 3 Samuel Williston, a Treatise on the Law of Contracts § 7:1 at 7–8 (4th ed. 1992) ; see also 1 Arthur L. Corbin, Corbin on Contracts § 1.18 at 50–51 (rev. ed. 1993) (observing how demand for the enforcement of promises in England gave rise to a writ of assumpsit as a variation on the older writ of trespass on the case, which had allowed for recovery for injury from a wrongful or negligent act). The insureds in this case should not have to suffer Giordano's suit just because State Farm failed to contemplate a trap being set, having instead treated the offer by Giordano's counsel as having been extended in good faith. Cf. Restatement (Second) of Contracts § 71 cmt. b (1981) ("[T]he law is concerned with the external manifestation rather than the undisclosed mental state: it is enough that one party manifests an intention to induce the other's response and to be induced by it and that the other responds in accordance with the inducement.").
Cf. Restatement (First) of Contracts § 12 cmt. a (1932) ("In a unilateral contract the exchange for the promise is something other than a promise."); Kolodziej v. Mason , 774 F.3d 736, 740 n.3 (11th Cir. 2014) (distinguishing a bilateral contract, "with promises exchanged between two parties" from a unilateral contract, which "is, as the name implies, one-sided—one party promises to do something (for example, pay money) in exchange for performance (an act, forbearance, or conduct producing a certain result)").
An "offer of a promise" constitutes the promisor's "manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it." RESTATEMENT (SECOND) OF CONTRACTS § 24 (1981) ; see also id. § 2 & cmt. b (explaining that a "promise is a manifestation of intention to act ... in a specified way, so made as to justify a promisee in understanding that a commitment has been made," and is assessed by looking at "the external expression of intention as distinguished from undisclosed intention"). The undisputed facts before the trial court showed that Giordano offered a promise to release State Farm and its insureds from any claim arising out of the crash in return for the sum of $28,564.63. From the face of the offer letter, State Farm was justified in its understanding that Giordano had committed to settling the claim, in lieu of suit, for that amount.
To accept, State Farm had to perform two acts: disclose insurance information and deliver checks in the amounts and in the manner specified. For the offered promise to become a contracted promise, State Farm had to signify "reciprocal assent to a certain and definite proposition." Strong & Trowbridge Co. v. H. Baars & Co. , 60 Fla. 253, 54 So. 92, 93 (1910). The acceptance had to "be: (1) Absolute and unconditional; (2) identical with the terms of the offer; and (3) in the mode, at the place, and within the time expressly or impliedly required by the offer." Id. ; see also Bullock v. Harwick , 158 Fla. 834, 30 So. 2d 539, 541 (1947) (explaining that "acceptance is the means by which the minds of two parties are brought to agreement," so it must be "absolute, unambiguous [and] unequivocal" and must "not vary from the terms of the offer" (internal quotation and citation omitted). "It is also essential that the acceptance shall be made in the manner, at the place, and within the time expressly or impliedly designated in the offer." Strong & Trowbridge Co. , 54 So. at 94.
On this front, State Farm undisputedly accepted Giordano's offer on the terms presented. It did not express any intent to modify the offer. Everything about State Farm's performance manifested an objective intent to accept the bargain as stated in the letter. It delivered the two checks to the location specified, and they were made out in the manner and in the amounts demanded. State Farm also indisputably provided the information required by section 627.4137—at least once before the offer and once after the offer. Once State Farm's performance indicated its unequivocal acceptance, Giordano could not revoke his offer of promise. RESTATEMENT (SECOND) OF CONTRACTS § 24 cmt. a (1981); see Kendel v. Pontious , 261 So. 2d 167, 170 (Fla. 1972) (explaining that the right to revoke ends if the acceptance is communicated before notice of revocation is received). In fact, it became a contractual obligation on Giordano's part. Cf. Strong & Trowbridge Co. , 54 So. at 93 (explaining "that an offer must be accepted before it can become a binding promise"); RESTATEMENT (SECOND) OF CONTRACTS § 50 & cmt. b (explaining that "acceptance by performance requires that at least part of what the offer requests be performed or tendered," and "the beginning of performance or the tender of part performance of what is requested may both indicate assent and furnish consideration").
State Farm's performance also provided the consideration necessary to support Giordano's promise of a release of State Farm's insureds as a binding contractual obligation. Consideration simply "is the inducement to a contract." Tampa N. R. Co. v. City of Tampa , 104 Fla. 481, 140 So. 311, 312 (1932). "[I]t is the cause, motive, price, or impelling influence which induces one to enter into a contract." Id. "A contract may be supported by any act of the plaintiff from which the defendant derives a benefit, or it may be supported by any labor, detriment, or inconvenience, however small, sustained by the plaintiff, if such act as performed or inconvenience suffered is by the consent express or implied of defendant." Id. at 313. Performance by a promisee (like State Farm here) is sufficient consideration if it is an act that it "is not legally bound to do." Henderson v. Kendrick , 82 Fla. 110, 89 So. 635, 637 (1921) ; see also Rodriguez v. Powell , 127 Fla. 56, 172 So. 849, 850 (1937) ("A contract may be supported by any voluntary act of the plaintiff from which the defendant derives a benefit in return for defendant's promise to do something on his part in return therefor."). State Farm had no obligation to pay Giordano's disputed injury and loss claim, so its payments at Giordano's demand was consideration for his promise to execute a release.
Objectively speaking, the bargain Giordano sought to strike was limited to his disputed claim for bodily injury and property damage. Cf. RESTATEMENT (SECOND) OF CONTRACTS § 81 cmt. a (1981) ("Consideration requires that a performance or return promise be ‘bargained for’ in exchange for a promise."). Almost the entire offer letter from counsel was devoted to addressing how Giordano's bodily injury claim against State Farm's insureds exceeded the policy limit and how he calculated the amount of his property damage. The letter contains no mention of a contention by Giordano that State Farm's prior disclosures were statutorily deficient. If Giordano had an issue with the disclosures, his counsel should have made clear in the offer letter that statutory compliance was part of the dispute with State Farm that he intended to include as part of the bargain. Instead, the correspondence between Giordano's counsel and State Farm leaves no doubt that the bargain struck here was to settle for the bodily injury policy limit of $25,000 plus $3,564.63 in property damage. We will not give countenance to Giordano's effort to back out of the settlement (which he himself proposed, by the way) based on a purported technical noncompliance with a statutory requirement that was not expressly part of the negotiated deal.
One last thing. We hasten to note that Giordano cannot hold the settlement hostage over whether State Farm had fully complied with its preexisting legal obligation under the statute. The passing mention in the offer letter that Giordano's counsel "need[s] complete compliance with" section 627.4137 by State Farm and its insureds is of no moment. State Farm clearly recognized its obligation under the statute—it responded three times to Giordano's disclosure requests, after all. Performance of an act that already is required as an indisputable legal duty owed to the promisor is not consideration in support of a contract. See RESTATEMENT (FIRST) OF CONTRACTS § 76 (1932) ; cf. 3 SAMUEL WILLISTON, A TREATISE ON THE LAW OF CONTRACTS § 7:4 at 49 (4th ed. 1992) (noting leading principle that there is no consideration if the obligee receives no benefit other than what he already was entitled to and the other party does not have to do anything other than what he already was required to do); see also Brinson v. Herlong , 121 Fla. 505, 164 So. 137, 137 (1935). In other words, a demand that State Farm perform as it was statutorily required to do could not have been a negotiated or bargained-for term of contract. Whether Giordano's promise of a release is contractually binding on him cannot then turn on whether State Farm in fact did comply with the statute.
Along these same lines, we reject Giordano's argument that State Farm effectively counter-offered by including in its acceptance a reminder that Giordano needed to deliver title to the totaled motor scooter. Giordano admitted that the scooter was a total loss in his offer to settle, so by operation of statute and State Farm's acceptance, the title transfer was going to happen. See § 319.30(3) (requiring "[a]n insurance company that pays money as compensation for the total loss of a motor vehicle" to "obtain the certificate of title for the motor vehicle [ ], ... and, within 72 hours after receiving such certificate of title, forward such title ... to the department for processing"). The claims manager testified that this was the reason for mentioning the title.
The reminder by State Farm in its acceptance of Giordano's settlement offer, then, was not a proposed modification to the deal offered. A title transfer was inherent in the bargain proposed by Giordano. He was going to have to provide the title to State Farm in return for the settlement payment regardless of any mention in 627.4137, State Farm's mention of the title-transfer requirement could not insinuate performance of that pre-existing obligation into the bargain. It has no effect on whether there is a valid settlement.
Let us not forget that Giordano's settlement offer also referenced discussing the title and even enclosed a copy of it.
We also reject, without further comment, Giordano's alternate theory that there was no settlement agreement because the person who signed State Farm's disclosures was a "claim specialist," not the "claims manager" specified in section 627.4137(1).
IV.
The undisputed facts show that a valid settlement agreement was formed. The contract is unilateral, meaning that Giordano is bound by his promise to release State Farm and its insureds from the claim raised in the complaint, provided State Farm sends the checks back to Giordano's counsel.
REVERSED .
B. L. Thomas and Winokur, JJ., concur.