On September 20, 2017, Hurricane Maria caused catastrophes through its passing by Puerto Rico. As mentioned in past blogs,1 many policyholders filed their insurance claims and as soon as they received their response from the carrier along with a check, they proceeded to deposit the check unaware that even if they did not agree with the amounts, these were considered “total and final” payments and therefore, a waiver to their right to claim. Since then, as I have discussed on other blog posts, many policyholders have battled in court as to the application of accord & satisfaction doctrine to their claims.2
However, it was not until May 28, 2021, that the Supreme Court of Puerto Rico, in Aguayo v. MAPFRE Pan American Insurance Company,3 evaluated how the accord and satisfaction doctrine operates within the property insurance field. This is a very important decision for policyholders that are still waiting for carriers to pay their Hurricane Maria claims.
In Aguayo v. MAPFRE, the insured alleged that the trial and appellate courts erred in reasoning that the requirements complied with accord and satisfaction doctrine. The supreme court held that it was clear, the insured was right. The lower courts determined as sufficient facts the following events: the offering of the check as total payment, notification of closing the claim, and the deposit of the check. The courts applied the doctrine in a mechanical manner without considering the jurisprudential requirements—specifically, they did not consider the requirement of a bona fide (genuine) controversy and good faith in the offer in compliance with reasonable and just treatment. The lower courts only established that the insurer had sent a letter to the insured with the check and that he signed and deposited the check. But as discussed, the mere deposit of a check does not constitute accord and satisfaction, therefore the debt and the obligation is not extinguished. The lower courts also did not analyze the information included in the letter sent to the insured and, most importantly, if the insured clearly understood the letter and the consequences of accepting the payment, and if this would prevent him from requesting reconsideration.
Therefore, accord & satisfaction will be established when all the jurisprudential and statute requirements are in compliance. The waiver of any affirmative right conceded by law requires that the party waiving recognizes his right and has a clear intention to abandon it. The supreme court concluded there was no clear existence of the facts, or if the insurer complied with the reasonable just treatment to establish the precedence of accord and satisfaction through summary judgment. However, none of this prevents the parties from agreeing to settle the dispute or to use the mechanism of summary judgement if the requirements are present. This issue cannot be analyzed in a simple and mechanical way. The supreme court reversed the appellate court determination and ordered the case returned to the trial court and proceed with the case based on the decision.
This determination will absolutely become a precedent in Puerto Rico courts and will help many policyholders in their fight to resolve Hurricane Maria claims.
1 https://www.propertyinsurancecoveragelaw.com/2019/07/articles/insurance/accord-satisfaction-will-my-insurance-claim-be-dismissed-if-i-deposit-a-payment/; Posted July 21, 2019.
2 https://www.propertyinsurancecoveragelaw.com/2019/11/articles/insurance/merlin-law-group-pr-llc-wins-accord-and-satisfaction-appeal/, Posted on November 19, 2019. https://www.propertyinsurancecoveragelaw.com/2020/10/articles/insurance/puerto-rico-court-of-appeals-revokes-two-accord-satisfaction-rulings-on-hurricane-maria-claims/; Posted on October 23, 2020. https://www.propertyinsurancecoveragelaw.com/2021/01/articles/insurance/accord-satisfaction-will-my-insurance-claim-be-dismissed-if-i-deposit-a-payment-part-2/; Posted January 18, 2021
3 Aguayo v. MAPFRE Pan American Ins. Co., 206 DPR — (May 28, 2021).