County Civil Court:  INSURANCE – Statutory Interest – trial court did not err in finding that insured was not entitled to statutory interest pursuant to Section 627.4265 although insurer tendered settlement amount 2 days after payment deadline - parties’ settlement agreement stated that the settlement was contingent upon the receipt by Defense counsel of a general release and indemnification agreement, which Defense counsel ultimately provided – insured was not precluded from tendering his own release had he desired earlier payment – Final Judgment affirmed.  Kerwin v. Auto-Owners Ins. Co., Appeal No. 05-0038AP-88B (Fla. 6th Cir. App. Ct. April 13, 2006). 









vs.                                                                                Appeal No. 05-0038AP-88B








Appeal from Final Judgment

Pinellas County Court

Judge Walt Fullerton


Randy L. Stowell, Esquire

Attorney for Appellant


A. Wade James, Esquire

Attorney for Appellee




Ramsberger and Rondolino, JJ;

Demers, J., Dissenting


            THIS CAUSE came before the Court on appeal, filed by Timothy J. Kerwin (Kerwin), from the Final Judgment for Defendant, entered April 27, 2005, in favor of Auto-Owners Insurance Company (Auto-Owners).  Upon review of the briefs, the record and being otherwise fully advised, the Court affirms the Final Judgment. 

            The record shows that Kerwin was involved in an automobile accident on September 30, 2002, and sustained injuries.  As a result of the accident, Kerwin submitted a claim for damages against Auto-Owners under the parties’ insurance policy.  On November 24, 2004, the parties reached a settlement agreement in which Auto-Owners agreed to pay Kerwin the amount of

$ 528,000, payable within twenty days of the date of entry of the settlement agreement.  The settlement agreement also required Kerwin to voluntarily dismiss pending litigation and to sign a General Release and Indemnification Agreement holding Auto-Owners harmless from any third party liens or claims.  On December 15, 2004, Auto-Owners mailed Kerwin a check for

$ 528,000, along with an original Release, Indemnity and Confidentiality Agreement.  The letter requested that Kerwin, “[p]lease hold the settlement funds in trust until such time as your client has fully executed the Release, and return the original Release to the undersigned.”  Kerwin received the letter and check on December 16, 2005, and Kerwin executed the Release on December 17, 2005.  Kerwin then sued Auto-Owners for 21 days of interest at 12 %, or $ 3,645.39, pursuant to Florida Statutes, § 627.4265.  After a hearing on the matter, the trial court entered summary judgment in favor of Auto-Owners finding that the settlement payment was contingent upon the execution of the release.  The trial court held that Kerwin was not precluded from tendering his own release if he desired earlier payment.   

On appeal, Kerwin argues that the trial court erred as a matter of law in not awarding statutory interest pursuant to Florida Statutes, § 627.4265, and the parties’ settlement agreement, since it was undisputed that Auto-Owners tendered payment 2 days late.  Kerwin does not argue that there are disputed material facts.  In reviewing this issue, the Court finds that settlement agreements are interpreted and governed by the law of contracts.  See Spiegel v. H. Allen Homes, Inc., 834 So.2d 295, 297 (Fla. 4th DCA 2002).  The standard of review for construction of a contract and for summary judgment is de novo.  See Barnier v. Rainey, 890 So.2d 357, 359 (Fla. 1st DCA 2004).  In reviewing a settlement agreement, the appellate court is on equal footing with the trial court in interpreting the agreement.  See Ospina-Baraya v. Heiligers, 909 So.2d 465, 472 (Fla. 4th DCA 2005).

The applicable statutory provision is Florida Statutes, § 627.4265, which states:

In any case in which a person and an insurer have agreed in writing to the settlement of the claim, the insurer shall tender payment according to the terms of the agreement no later than 20 days after such settlement is reached.  The tender of payment may be conditioned upon execution by such person of a release mutually agreeable to the insurer and the claimant, but if the payment is not tendered within 20 days, or such other date as the agreement may provide, it shall bear interest at a rate of 12 percent per year from the date of the agreement; however, if the tender of payment is conditioned upon the execution of a release, the interest shall not begin to accrue until the executed release is tendered to the insurer.  (emphasis added).


The parties’ Stipulation states, in pertinent part:

2.  The Defendant(s) shall pay said sum through the offices of Plaintiff’s counsel of record within 20 days from the date of this stipulation.


3.  The Plaintiff(s) shall voluntarily dismiss this litigation with prejudice and execute and deliver to the Defendant(s) and his/her/their/it’s insurance company through the offices of Defendant’s counsel of record, General Release(s) and Indemnification Agreement(s) holding the Defendant(s) and his/her/their/it’s insurance company(ies) harmless from any third party liens or claims for which the Plaintiff(s) was/were able to legally collect and for which the Plaintiff(s) is/are legally liable only.


5.  This is contingent upon the clearing of funds and the receipt by the Defendant’s counsel of record of the dismissals, releases and indemnifications contemplated in paragraph 3 above.  (emphasis added).


In reviewing the above-cited statute and the parties’ Stipulation, the Court finds that § 627.4265 contemplates that a claimant and an insurer may agree to condition a settlement payment on the execution of a release.  The parties’ Stipulation, as set forth in number 5, specifically states that the agreement is contingent upon receipt by Defendant’s counsel of a release.  As the trial court found, if Kerwin desired earlier payment, he could have tendered his own release.  This Court agrees. 

One of the few cases interpreting § 627.4265 is Abe v. Ehrling, 768 So.2d 1225 (Fla. 3d DCA 2000).  In Abe, the Third District applied § 627.4265 in finding that the trial court erred in denying the plaintiff interest for late payment on a settlement amount of $ 600,000.00.[1]  See id. at 1227.  As cited in Abe, the defendant insurance company sent a letter, dated November 25, 1998, which stated:

This letter will confirm our conversation of yesterday afternoon wherein I offered the sum of $ 600,000.00 in full and complete settlement of the claims made by your clients, the Plaintiffs in the Abe litigation.  You have accepted that settlement offer.  Please confirm the acceptance in writing with a copy to other counsel. . . . Although it may at first sound unwieldy, I would like to obtain a release from each of your clients. [e.s.]  Id. at 1226.   


The Third District concluded that the letter made it clear that the parties’ settlement agreement was not contingent upon the execution of releases.  See id. at 1227; see also Klonel Chiropractic & Rehabilitation Center v. Progressive Express Ins. Co., 11 Fla. L. Weekly Supp. 1109 (Fla. Seminole Cty. Ct. Aug. 30, 2004)(finding that plaintiff was entitled to statutory interest when settlement agreement was not conditioned upon the execution of the release); Ward v. State Farm Mutual Automobile Ins. Co., 10 Fla. L. Weekly Supp. 119 (Fla. Hillsborough Cty. Ct. Dec. 5, 2002)(same); Clites v. United Services Automobile Association, 8 Fla. L. Weekly Supp. 391 (Fla. Hillsborough Cty. Ct. April 5, 2001)(same).  Conversely, as set forth above, the Stipulation in this case, particularly as clarified in number 5 of the agreement, clearly contemplates the execution of a release by the plaintiff as a condition of the settlement.  Accordingly, the Court finds that the trial court’s decision must be affirmed.

Demers, J., Dissent

            This case is controlled by §627.4265 and the language of the Stipulation entered into by the parties. The language of both is set forth in the majority opinion.

            The statute provides that parties can condition “tender of payment” upon execution of a mutually agreeable release. If they do so, the insurer must pay interest on the settlement from the time the executed release is tendered to the insurer. If they do not condition tender of payment on the execution of a release, the insurer must tender payment within 20 days or such other date agreed to by the parties. If the insurer fails to tender payment by the deadline, the insurer must pay interest from the date of the settlement agreement.

            In the case at bar, there is no dispute that the settlement agreement required payment within 20 days from the date of the stipulation. And there is no dispute that Auto-Owners failed to make the payment to Kerwin’s counsel until 22 days from the date of the agreement. Finally, there is no dispute that the amount of interest that accrued from the date of the stipulation is $3,645.39. Kerwin maintains that he is entitled to this sum as a matter of law.[2]  Auto-Owners maintains that Kerwin is not entitled to any interest as a matter of law.  The trial judge and the majority agree with the insurer’s position. I disagree. This disagreement turns on whether the settlement agreement conditioned tender of payment on delivery of an executed release or not. If it did, then the trial judge was correct. If it did not, then the trial judge erred and judgment should have been entered in favor of Kerwin. The majority holds that tender of payment was conditioned on delivery of the release.

            In reaching its decision, the majority treats tender of payment as being synonymous with a fully executed settlement that terminates litigation and bars future litigation. Auto-Owners is of the view that tender of payment only occurs when the Plaintiff’s lawyer puts the money in the hands of his/her client. Both positions are incorrect. A tender of payment occurs when the obligor transfers control of the involved funds to the obligee or the obligee’s agent. On the other hand, a fully executed settlement is accomplished when both parties have carried out all of their obligations under the agreement.[3]

            In the case at bar, the stipulation provides that, “the Defendant(s) shall pay said sum through the office of Plaintiff’s counsel of record within 20 days from the day of this stipulation.” This provision requires tender of payment within 20 days. There is no language in this clause that conditions this tender upon the execution of a release. Auto-Owners agrees to give up control and use of the money to Kerwin’s lawyer within 20 days. Both the majority and the trial judge suggest that if Kerwin had wanted earlier payment, he could have tendered his own release. That suggestion is incorrect. Even if Kerwin had tendered the release simultaneously with execution of the stipulation, under the clear language of the agreement Auto-Owners would still have had 20 days to tender payment to Plaintiff’s lawyer without incurring any obligation to pay interest.

            The majority view that Kerwin could have controlled the time that tender of payment was required, and that such tender was conditioned upon the execution of a release, arises from a misinterpretation of paragraph 5 of the stipulation. It provides that  “[t]his is contingent upon the clearing of funds and the receipt by the Defendant’s counsel of record of the dismissals, releases and indemnifications contemplated in paragraph 3 above.” The phrase, “[t]his is contingent upon…,” in this paragraph does not refer to tender of payment, but rather it refers to the fully executed settlement which would terminate litigation and bar future litigation. In other words, paragraph 5 means that the settlement will not be complete until all of the duties called for in the agreement have been performed, including tender of payment to the Plaintiff’s attorney, clearing of funds, dismissal, and execution and transmission of a release and indemnification to the Defendant. Thus, paragraph 5 makes completion of the agreement contingent upon execution of a release as well as other things, but it does not make the duty to tender payment contingent upon execution of a release.

            The majority’s interpretation of the agreement as making the tender of payment contingent upon the delivery of a release would render the 20 day deadline a nullity. And it is inappropriate to interpret an agreement in a way that renders a portion of the agreement meaningless.

            Additionally, the majority’s interpretation is inconsistent with the legislative intent of §627.4265. It is designed to prevent insurers from escaping the expense of litigation by agreeing to tender payment within a certain time, but then retaining control of the funds and profiting from them pass the agreed deadline. The legislature has decided that the insurer should forfeit the profit made between the date of the agreement and the deadline to discourage such conduct by the insurers. The majority holding allows an insurer to keep funds long after the agreed deadline and profit from those funds without paying any penalty as long as the insurer tenders payment to plaintiff’s lawyers before receipt of a release. Furthermore, it creates an incentive for the insurer to delay tender of payment until it receives a release. That is so because the insurer can collect interest on those funds for all the time preceding tender of the release and make payment immediately upon receipt of the release, resulting in little or no liability for interest. That is very likely to happen when you have a mediation agreement such as the one in the instant case that does not make it clear to the plaintiff that he or she cannot collect interest until a release is provided.

            In reaching its conclusion, the majority understandably relies on Abe v. Ehrling, 768 So.2d 1225 (Fla.3d DCA 2000). In that case, the insurer made payment of a substantial settlement prior to execution of a release, but beyond the 20 days provided by §627.4265, Fla. Stat. The plaintiffs argued that they were entitled to interest from the date of the agreement. The defendant argued that the settlement agreement was contingent upon execution of a release, and since payment was made before execution of a release, the statute did not require payment of interest. The appellant court concluded that the terms of the settlement did not require a release. The court said: “The settlement agreement was not conditioned upon the execution of releases. Section 627.4265 thus requires the payment of interest for late payment of $600,000.”  768 So.2d at 1227.

            Abe does not compel the result suggested by the majority in the instant case because it is factually distinguishable. In Abe, it is clear that neither the tender of payment nor the settlement agreement were conditioned upon the delivery of an executed release. Based on the insurer’s letter documenting the settlement in Abe it is apparent that the settlement was fully completed upon tender of payment. That was the only requirement of the settlement. Thus in Abe, the tender of payment and completion of the settlement agreement were one and the same. So the court understandably considered whether the settlement agreement was conditioned upon execution of a release. But the court did not address the situation in the case at bar. In contrast to the facts in Abe, in the instant case, the tender of payment to the plaintiff’s attorney, a voluntary dismissal, general release and indemnification agreement were all required by the settlement; so that tender of payment was not synonymous with a settlement agreement. Thus, the court in Abe did not address the issues in this case and it is not controlling.

            Full completion of the settlement agreement in the instant case so that it would bar litigation was conditioned upon execution and tender of a release. But tender of payment was only part of that settlement and it was not conditioned upon execution and tender of a release. The record conclusively establishes that Auto-Owners was suppose to have made the tender within 20 days of the stipulation, but did not make it until the 22nd day. The record also conclusively establishes that Kerwin is entitled to the sum of $3,645.39. Therefore, I would have reversed and remanded with instructions that judgment be entered in favor of Kerwin in the amount of $3,645.39.

            It is therefore,

ORDERED AND ADJUDGED that the Final Judgment for Defendant is affirmed.  It is further

ORDERED AND ADJUDGED that the Apellant’s Motion for Attorney Fees and Costs is denied.

DONE AND ORDERED in Chambers, at St. Petersburg, Pinellas County, Florida this _____ day of April 2006. 




                                                                                    DAVID A. DEMERS

                                                                                    Circuit Judge, Appellate Division







                                                                                    PETER RAMSBERGER

                                                                                    Circuit Judge, Appellate Division







                                                                                    ANTHONY RONDOLINO

                                                                                    Circuit Judge, Appellate Division

Copies furnished to:


Judge Walt Fullerton


Randy L Stowell, Esquire

8700 Fourth Street North

St. Petersburg, FL  33702


A. Wade James, Esquire

216 Mirror Lake Drive

St. Petersburg, FL  33701


[1] While the facts do not indicate how late the payment was, it obviously was not made within the statutory 20-day timeframe.

[2] There are several references in Auto-Owners’s brief that suggest it views Kerwin’s efforts to secure these funds as greed. It has occurred to me that Kerwin is pursuing what he believes are his legal rights. Similarly, Auto-Owners relied on its legal rights to retain the settlement funds for 20 days and to collect interest on those funds during that period. I doubt that the company thought of such permissible conduct as greed. Thus, I am puzzled as to why the company views Kerwin’s reliance on his legal rights as greed or how that is even relevant to the issues in this case.


[3] If the tender of payment were the only term of the settlement, then tender of payment and the settlement agreement would be one and the same.