Brandee Bower | Property Insurance Coverage Law Blog | July 28, 2015
There are many ways to settle a case, including discussions in person, via telephone or via email. Regardless, something in writing is usually set forth to memorialize the agreement and insure that the parties are on the same page. Word choice is important, as illustrated in the below case from Indiana.1
Sapp Family, LLC (Sapp) suffered storm damage and sought coverage from AMCO (prior carrier) and Cincinnati Insurance (current carrier). Both insurers denied the claim stating that the damages were done outside of their policy period, and Sapp sued.
In January 2015, Sapp and AMCO engaged in a series of emails regarding settlement. They agreed to certain terms including the amount of settlement, confidentiality, release of all claims and a stipulation of dismissal. Sapp’s attorney responded, “Agreed. Go ahead and draft the paperwork.” A month later, Sapp’s attorney asked for a status update and the defense attorney said that the check had been requested and paperwork had been started. A week later, Sapp’s attorney asked to suspend the paperwork because it was planning to reassess the weather history. AMCO sought to enforce the settlement.
Indiana favors settlement agreements and the enforcement of them.2 To be enforceable, there must be a meeting of the minds.3 Sapp argued that immediate payment was an essential term, which had been discussed, and it was not included in the settlement email, making this fatal. Where a specific time is not delineated, a reasonable amount of time is read into the contract.4 However, the trial court found that since a settlement check was ordered within a week of settlement, by law AMCO fulfilled its payment obligations of reasonableness. Sapp also claimed there was no meeting of the minds, but the court looked to additional emails and found that the parties expressed their intent to be bound. The motion to enforce settlement was granted.
We have all been guilty of firing off an email too quickly and not proofreading what we’ve written. But this case emphasizes how important the use of words can be. For lawyers, the difference between ‘may’ and ‘shall’ is vast. So if you are negotiating with an insurance company, please take the time to be certain that what you’ve written is truly what you mean. It could be the difference between reaching a settlement and unnecessary litigation.
1 Sapp Family, LLC v. AMCO Ins. Co., 2015 WL 4133959 (S.D. Ind. July 8, 2015).
2 Georgos v. Jackson, 790 N.E.2d 448, 453 (Ind. 2003).
3 Sands v. Helen HCI, LLC, 945 N.E.2d 176, 180 (Ind.Ct.App. 2011).
4 In re Estate of Moore, 714 N.E.2d 675, 677 (Ind.Ct.App. 1999).
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