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Accord and Satisfaction: How Doctors can Avoid Prematurely Settling a PIP Suit

A simple but often overlooked aspect of PIP (personal injury protection insurance) is that the Florida rules of civil procedure apply to Florida PIP Suits. Oftentimes, PIP carriers will pay medical providers a reduced amount for the services rendered to patients in automobile accidents. These incorrect payments are usually paid unilaterally by the insurer without any agreement whatsoever! The medical provider may have no idea that the check actually represents the settlement of the entire claim for PIP payments. That being said, there are easy steps to overcome these overlooked affirmative defenses.

Why and How an Accord and Satisfaction Occurs

According to Florida courts, in Martinez v. S. Bayshore Tower, an accord and satisfaction results when “the parties mutually intended to effect a settlement of an existing dispute by entering into a superseding agreement, and there is the actual performance in accordance with the new agreement.  Accord and satisfaction results as a matter of law when an offeree accepts a payment which is tendered only on the express condition that its receipt is to be deemed complete satisfaction of a disputed claim.”

In the PIP context and in laymen’s terms, an accord and satisfaction can occur over and over again, when for example, a provider sends a demand letter to the insurance company, and the insurance company responds by reimbursing the provider with a check. A dispute exists, as the medical provider is alleging that the insurance company didn’t reimburse him/her properly. Next, the insurance company will clearly state in large font on the front of the check (the proper way), something along the lines of, “THIS CHECK REPRESENTS FULL AND FINAL PAYMENT FOR ANY AND ALL PIP BENEFITS.” If the medical provider unknowingly cashes this check, the suit is over! Yes, you read that correctly, the suit goes away, despite no agreement to settle for the small amount tendered by the insurance carrier on the check. Cashing the check is the final step that “completes” the accord and satisfaction.

An accord and satisfaction must likewise contain language that is conspicuous (so that a reasonable person could locate the language and understand it), and so long as the claim was unliquidated (specific amount cannot be calculated at the time).

What should you do if you receive a check indicating full and final payment?

If you receive a check indicating full and final payment, it is essential that you call an experienced PIP litigation attorney. Insurance companies attempt to resolve claims without mutual understanding between their entity and the provider, in the form of “full and final” language on a check. It is important to read every check you receive from an insurance company. It seems overwhelming to read every check, but by doing your due diligence, you can save yourself the burden of losing out on thousands of dollars by prematurely settling your case due to a unilateral accord and satisfaction.

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