Florida's Fourth District Court of Appeal ruled that a settlement offer for ten (10%) percent of the intended amount can be rescinded after it was mistakenly sent to an insurer by a lawyer’s paralegal. The paralegal for an auto crash plaintiff had offered to settle for $10,000, rather than the $100,000 policy limit. Plaintiff's lawyer realized that a mistake had been made when State Farm Automobile Insurance Co. ("State Farm") quickly sent a $10,000 check the next day.
The appeals court said the trial judge should have granted the lawyer’s motion to withdraw the offer for two reasons.
- The error was “due to a unilateral mistake.”; &
- Plaintiff had not authorized an offer to settle for the lower amount.
The error occured when a $10,000 offer to the plaintiff’s own carrier for uninsured/underinsured coverage was sent instead of a $100,000 offer was supposed to be sent to State Farm, the defendant’s insurance company. In a motion to withdraw the offer, Plaintiff said the error was obvious because the defendant had already made offers to settle in excess of $10,000, and the plaintiff already had more than $58,000 in medical bills. The lawyer attached his email instructions to the paralegal.
State Farm argued that the contract could not be rescinded because there had been an offer, acceptance and valid consideration.
The appeals court cited a 1965 Florida Supreme Court case that held that a contract may be rescinded based on a unilateral mistake if the mistake is not due to an inexcusable lack of due care and rescission would not be inequitable.
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