Opinion ID: 2682712
Heading Depth: 4
Heading Rank: 2

Heading: Breach of the Duty to Defend

Text: Having determined that MCC had a duty to defend J.B.D against Sun City, we now turn to the question of whether MCC breached this duty. It is undisputed that J.B.D. tendered the Sun City Counterclaim to MCC for defense and indemnification on May 6, 2009. On May 21, 2009 MCC sent J.B.D. a Reservation of Rights letter notifying J.B.D. that it was investigating the claim. At no point after sending this letter did MCC retain counsel or otherwise assist in defending for J.B.D. On July 15, 2009, acting on advice from its own retained counsel, J.B.D. agreed to settle all claims in the Sun City Counterclaim for $181,750.94. J.B.D. subsequently notified MCC of the settlement and again requested indemnification. Over a year later, MCC mailed J.B.D. a check for $5,717.77 to reimburse J.B.D.’s counsel for his services from the time of tender until the completion of the settlement. This check represented the value of J.B.D.’s attorney’s fees and expenses accrued from the date of tender up until the date of settlement less the 19 Case: 13-10138 Date Filed: 07/11/2014 Page: 20 of 25 $5,000 contractual deductible. J.B.D. responded by sending a letter to MCC demanding full reimbursement of the settlement value and notifying MCC of its intention to treat the check as a partial payment of that amount. The record is clear that MCC elected not to defend J.B.D. against Sun City in the underlying litigation from the time J.B.D. tendered the suit through the settlement date. This failure to appoint counsel is a clear breach of MCC’s duty to defend. MCC argues, however, that its payment of the $5,717.77 check acted as an “accord and satisfaction,” therefore curing the breach. Despite finding that MCC did not owe J.B.D. a duty to defend, the district court nonetheless ruled, as a matter of law, that this payment was not an “accord and satisfaction.” We agree. An “accord and satisfaction results as a matter of law when an offerree accepts payment which is tendered only on the express condition that its receipt is to be deemed a complete satisfaction of a disputed claim.” See Hannah v. James A. Ryder Corp., 380 So. 2d 507, 609–10 (Fla. 3rd DCA 1980) (citations omitted). J.B.D. did not accept payment on the express condition that its receipt would be a complete satisfaction of the lingering duty of defense dispute. Correspondences between the parties make clear that J.B.D. intended to treat the check as partial payment of the $181,750.94 settlement value J.B.D. believed MCC owed it. Accordingly, we affirm the district court’s denial of MCC’s motion for summary judgment on the accord and satisfaction issue and hold that MCC breached its 20 Case: 13-10138 Date Filed: 07/11/2014 Page: 21 of 25 contractual duty to defend under the MCC Policy as a matter of law by failing to provide J.B.D with counsel or otherwise defend J.B.D. against the Sun City Counterclaim. We remand the case to the district court for the sole purpose of determining whether, and to what extent, J.B.D. is entitled to damages, including consequential damages, as a result of MCC’s breach of its duty to defend J.B.D. from the time of tender through date of settlement.5