Texas Court Rules in Favor of Insurance Company on “Verbal Release,” Limiting Injured Man with $15,000 in Medical Expenses to $500 Settlement Allegedly Entered Just Days After Crash – Gilbert v. Fitz

insurance adjuster

As any attorney who regularly represents those who have been injured or have lost loved ones due to a motor vehicle accident caused by another person’s negligence can tell you, it is very important to talk to an attorney before signing anything proffered by an insurance company. In fact, the best practice is to speak to an attorney before even talking to anyone from the defendant’s insurance company.

A recent case illustrates what can happen when this advice is not followed.

Facts of the Case

In the recent case of Gilbert v. Fitz, the plaintiff was a man who was involved in a car accident in which he was “rear-ended” by the defendant on July 22, 2014. The plaintiff’s medical expenses on the day of the accident totaled $4,806.75; by the time he was released by his physician, he had over $15,000 in medical bills. When the crash occurred, the defendant was driving another person’s automobile, which was insured under a liability policy issued by the Government Employees Insurance Company (GEICO).

A mere eight days after the crash (July 30, 2014), one of GEICO’s adjusters called the plaintiff and purportedly settled the bodily injury portion of his claim against the defendant for $500. GEICO then mailed the plaintiff a check (but not a written release) for $500. The plaintiff did not cash the check; instead, he hired an attorney to represent him on August 4, 2014. Relying on the “verbal release” obtained by its adjuster, GEICO insisted that the case had been settled and refused to negotiate further.

When the plaintiff filed suit against the defendant in 2015, the defendant filed a counterclaim for breach of contract. The trial court granted summary judgment to the defendant, dismissing the plaintiff’s suit and ordering specific performance of the settlement agreement. The court also awarded the defendant $10,000 in attorneys’ fees.

Decision of the Court of Appeals

The appellate court affirmed. First, the court noted the law with respect to an appellate court’s review of a trial court’s decision to grant (or deny) summary judgment; in such cases, the reviewing tribunal is to consider the evidence in the light most favorable to the non-moving party (here, the plaintiff). The court then reiterated the standard by which a motion for summary judgment is reviewed, namely the moving party’s entitlement to a judgment as a matter of law.

With regard to the issue of whether the defendant was entitled to summary judgment on the issue of breach of contract, the court noted that, in order to prevail on such a claim, the defendant had to show that there was a valid contract, that the moving party performed or tendered performance of that contract, that the opposing party breached the contract, and that there were damages resulting from the non-moving party’s breach of contract.

The court went on to observe that, under Texas law, oral agreements – including settlement agreements – are evaluated in the same manner as written contracts. To be enforceable, there must have been an offer, an acceptance, a meeting of the minds, consent by both parties, and execution and delivery of the contract with an intent that it be mutual and binding. According to the court, the defendant’s summary judgment evidence conclusively established that there had, in fact, been a meeting of the minds between the parties, such that a valid settlement agreement had been entered between the plaintiff and the defendant.

As to the plaintiff’s affirmative defense that the defendant (or, in actuality, GEICO) had materially breached or repudiated the settlement agreement, the court found that GEICO had only agreed to pay $500, rather than, as insisted by the plaintiff, all of the medical expenses that he incurred on the date of the accident. After reviewing the adjuster’s recording of the conversation with the plaintiff, the court found that there were no genuine issues of fact on the issues of material breach or repudiation, and thus the trial court’s grant of summary judgment to the defendant had been proper.

Have Questions About an East Texas Car Crash?

To put the skill and knowledge of a board-certified east Texas car accident attorney with three decades of personal injury experience to work on your case, call Earl Drott Law today at (903) 531-9300. We represent those who have been hurt or who have lost loved ones because of others’ negligence. If you or a loved one has been hurt in Tyler or Smith County, we are here to help. In most cases, we do not require payment of legal fees upfront; instead, we collect our fee if your case is settled or a judgement is entered in your favor.

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