EXCUSABLE NEGLECT SUPPORTED PLAINTIFF’S MOTION SEEKING TO WITHDRAW A PROPOSAL FOR SETTLEMENT THAT WAS MADE FOR $10,000.00 INSTEAD OF $100,000.00—TRIAL COURT ERRED IN DENYING THE MOTION TO WITHDRAW.
Dale v. Chaub, 45 Fla. L Weekly D1976 (Fla. 4th DCA August 19, 2020):
An attorney’s paralegal sent a proposal for settlement to an insurance company seeking the policy limits of $100,000.00. Instead of making the proposal for $100,000.00, the proposal erroneously stated it was for $10,000.00. The attorney realized the mistake when the defendant sent a check for $10,000.00 the next day.
Despite the obvious error, the court denied a motion to withdraw the proposal and later denied a motion for reconsideration, which was based upon the fact that the attorney did not have authority from the client to settle the claim for $10,000.00.
Plaintiff’s counsel decided to send a proposal for settlement and directed his paralegal to send on to each insurance company for their policy limits. The paralegal mistakenly misconstrued the instructions and sent the $10,000.00 one to the party where the policy limits were $100,000.00.
As soon as the defendant filed a notice of acceptance and issued the check for $10,000.00, the plaintiff’s attorney filed a motion to withdraw the proposal due to the paralegal’s inadvertent error in sending the wrong proposal. Attached to the motion was an email chain between the attorney and the paralegal, as well as the paralegal’s affidavit. The motion also pointed out that $10,000.00 was an obvious error because the plaintiff’s medical bills were in an excess of $58,000.00 and the defendant had already offered to settle the case in excess of $10,000.00.
At the hearing, the plaintiff’s attorney advised of the facts set forth in the motion, and also stated that he prepared the proposal for settlement himself, to avoid these kind of errors. He advised that the paralegal mistakenly prepared and served the proposal herself—which she should not have done—and did so without the attorney’s approval.
On a motion for reconsideration, the plaintiff also raised that there was no authority given to settle for that amount.
In Florida, a contract cannot be set aside on the basis of unilateral mistake unless (a) the mistake is the result of an inexcusable lack of due care or (b) the other party has so changed its position in reliance on the contract that rescission would be unconscionable.
In this case, the court found that the miscommunication between the paralegal and the attorney did not constitute inexcusable negligence. Additionally, because the settlement of a case requires the consent of the client, and because there was not authority from the client to settle for $10,000.00 (it was to settle for the policy limits of $100,000.00) that provided an additional reason for the court to grant the motion to withdraw the proposal.