The Supreme Court of Puerto Rico has continued to rule in favor of the policyholders in Hurricane Maria claims.
In its most recent ruling, Diaz Altagracia v. MAPFRE,1 the insured had policy coverage for both structural and personal content. Unsatisfied with the insurer’s adjustment, the insured requested reconsideration but alleges that in this second adjustment the insurer incurred in false representations and unfair practices by not informing the possibility to reconsider or claim additional damages not included in the adjustment. The insured also alleged that his claim payment was delayed, underpaid and that covered damages were ignored. The insured filed a complaint and the insurer alleged that the elements of Accord & Satisfaction had been met when the claim was adjusted, two checks were issued to the client which he received, accepted and deposit without objection. The insured then counterclaimed that he never received the damage report related to his claim and not all his covered damages were considered, in addition, the insurer did not warn of the consequences of depositing the checks. Therefore, the elements of accord & satisfaction were not satisfied and there was undue advantage in favor of the insurer.
In this case, the court granted the insurer’s summary judgment due to Accord & Satisfaction, holding that the there was no evidence of vicious consent when accepting and depositing the checks. The appeals court also confirmed this judgment based on not finding any uncontroverted facts demonstrating that the insurer incurred in unfair acts or bad faith.
As discussed in, Accord & Satisfaction: Will My Insurance Claim Be Dismissed If I Deposit A Payment? – Part 2,2 the following are the basic elements that need to be in compliance in order for Accord & Satisfaction to apply:
- A claim must have a monetary value or a bonafide controversy must exist.
- The debtor makes a payment offer.
- The creditor accepts payment offer.
In addition, the payment must be made in absence of oppression or undue advantage from the debtor and there must be clear indications that the payment is total and final, therefore it will extinguish the obligation under contract. As I discussed last month in, Accord & Satisfaction: Puerto Rico Supreme Court Rules for Policyholder in Hurricane Maria Claim,3 the Supreme Court of Puerto Rico held in Feliciano Aguayo v. MAPFRE,4 that accord and satisfaction can’t be automatically applied to insurance claims and must be evaluated case by case. All elements should be in compliance with the requirements of Puerto Rico’s Insurance Code.
In Diaz Altagracia v. MAPFRE, the supreme court held that a real controversy existed related to the true value of the damages, information was not provided by the insurer, there was undue advantage in favor of the insurer, controversy in the intention of accepting the payment as final and unfair practices during the adjustment. Therefore, both prior courts limited their judgments to the basic elements without considering all the circumstances of this case and it is the court’s duty to guarantee the compliance of all doctrine and statue requirements to end a complaint in summary judgment. The supreme court reversed the appellate court and ordered the case returned to the trial court and proceed with the case based on its precedent in Feliciano Aguayo v. MAPFRE.
1 Diaz Altagracia v. MAPFRE, CC-2020-0149 (July 13, 2021).
4 Aguayo v. MAPFRE Pan American Ins. Co., 206 DPR — (May 28, 2021).