Allen v. Montalvan – Florida Car Accident Settlement Reversed

Anytime children are parties to a car accident or injury lawsuit, Florida law requires the court to appoint a guardian ad litem to represent the minors’ interests in court before any pre-trial settlement can be approved.carcrash4

The recent case of Allen v. Montalvan, before Florida’s Fourth District Court of Appeal, shows what can happen when both sides — even when acting in good faith — fail to take this crucial step to ensure that a car accident settlement agreement is legally binding.

According to court records, plaintiffs — three minor children — were among six total people in a vehicle struck by defendant motorist (driving a vehicle owned by his wife, also a defendant). The person driving the vehicle was their grandmother. Their mother was also in the vehicle, as was an uncle. Tragically, the grandmother was killed in the crash. They, their mother and their uncle suffered varying degrees of injury.

Several days after the crash, the mother of the children sought legal advice and filed a claim for damages from the defendant driver’s insurer. The insurance company, rather than turn this into a long, protracted legal battle (as so often happens), agreed to tender the full policy limits.

The policy allowed for $25,000 per person and up to $50,000 per car accident. The mother, as representative of the grandmother’s estate, agreed to settle that claim for the per-person limit of $25,000. The remaining $25,000, as far as the insurance company understood, would go to settle all remaining claims for the other five people involved — including the three children. The insurer did not ask — and plaintiff attorney did not immediately stipulate — how much of that $25,000 was to go to the children. Neither did either side ensure the children’s interests were represented by a guardian ad litem, as required per F.S. 744.

Later, the attorney submitted notice to the insurer that the amount allocated to the children was $0, while the amount allocated to the mother and uncle was $25,000 total.

Mother later retained a different attorney who sought compensation for the children as a result of the crash.

Defendant’s auto insurance company intervened and argued the claims were barred as a result of the settlement, which was intended to resolve all pending claims. Plaintiff’s former attorney said his understanding was not that the settlement had settled all pending claims, but rather that it was a tendering of the full policy limits.

Mother argued this was a matter for a jury to decide. However, trial court determined the parties had a binding agreement and that the $50,000 settlement agreement resolved all claims.

Mother appealed and the 4th DCA reversed. In reaching this conclusion, the court pointed to F.S. 744.3025(1)(b), in which it is required that the court “shall appoint” a guardian ad litem to represent a minor’s interest before approval of a settlement of a minor’s claim in any case where the gross settlement amount meets or exceeds $50,000. Defendant insurer argued that the $25,000 allocated to the grandmother’s estate should not be included this $50,000 figure. That would mean the $25,000 earmarked for the remaining passengers wouldn’t meet the criteria necessary to ensure the interests of the children were furthered by an appointed guardian ad litem.

The appeals court disagreed.

Florida rules of evidence and prior case law supported the notion that in this instance, the gross settlement amount met the $50,000 threshold criteria.

The case has been remanded to the lower court for further proceeding.

If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.

Additional Resources:

Allen v. Montalvan, June 22, 2016, FL 4th DCA

More Blog Entries:

Tire Tread Blamed in Florida Car Accident That Killed Four Sisters, June 14, 2016, Miami Car Accident Lawyer Blog