Timing is Everything: Untimely “Payment” of Demand Letter Leads to a Confession of Judgment for Insurer
In the Personal Injury Protection context, if an insurer issues payment after a suit is filed, that payment could amount to a confession of judgment. As a result, it is important for insurers to be careful when making payment after the time to respond to a demand letter has expired.
In USAA Casualty Ins. Co. v. Emergency Physicians of Central Fla., USAA mailed overdue PIP payments a day before the suit was filed by Emergency Physicians. The payments were not received by the Plaintiff until after the suit had been filed. However, unsure of the exact timeline of payment, USAA inadvertently stipulated that payment was issued after the suit was filed and never withdrew the stipulation. The trial court ruled that because the stipulation had never been withdrawn, USAA had confessed judgment and entered an order allowing Plaintiff to recover reasonable attorney’s fees and costs.
USAA appealed the trial court’s decision to the Circuit Court sitting in its appellate capacity. The Circuit Court affirmed the trial court’s order. USAA appealed this decision to the District Court of Appeal. At the District level, USAA contended that Fla. Stat. § 627.736(4)(b)5 deems payment to have been made when it is correctly addressed and placed in the mailbox with proper postage. Therefore, because payment was issued a day before suit was filed, its payment could not amount to a confession. The District Court found that USAA waived this argument because it stipulated to the post-suit payment and did not move to set aside the stipulation once it became aware of the mistake and before asking for an appeal.
The outcome of this case was more a procedural consequence than a substantive loss. USAA lost its case on a technical battle and the Court did not resolve the “timing” question one way or the other. Notwithstanding, carriers should use caution when issuing payment after a demand letter has expired and review local court dockets to identify pending lawsuits that have not been served. Similarly, once in court, it is important to understand the exact payment timeline to avoid costly mistakes.
 Tampa Chiropractic Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., 141 So. 3d 1256, 1259 (Fla. 5th DCA 2014); Wollard v. Lloyd’s and Cos. Of Lloyd’s, 439 So. 2d 217, 218 (Fla. 1983).
 2D15-2154 (Fla. 5th DCA June 17, 2016).