When a victim’s lawyer makes an offer to an insurance company, the victim’s lawyer almost always includes terms as part of the offer. It is important for the insurance company to comply with the terms or else the lawyer can argue that the insurance company failed to abide by all of the terms and thereby rejected the offer.
At our law firm, we make it a habit that in every case we handle we include material terms that govern the terms of acceptance.
The Georgia Court of Appeals recently reversed a trial court erred in granting a motion to enforce a settlement agreement.
This appeal contested a trial court’s order granting a motion to enforce a settlement agreement. However, the Court of Appeals found that no settlement agreement was formed because the purported acceptance failed to comply with the terms of the offer to settle.
The plaintiff sent a written settlement offer to the defendant ‘s insurance company, claiming that alleging that he was injured when he was struck by a car driven by the Insurance Company’s insured. The offer was made pursuant to former OCGA § 9-11-67.1, which governs settlement offers for claims of injury arising from the use of a motor vehicle, and it contained the five material terms required by the version of the statute that was in effect at the time of the offer.
The offer also provided that certain acts were material to acceptance of the offer “and must be completed without variance of any sort to form a binding contract[.]”
Those mandatory acts included payment of $100,000 and delivery of a release that fully complied with every term and condition of the offer. As to the release, the offer required the following:
- A specific reference in the release to an affidavit of the plaintiff swearing that there was no other insurance coverage available;
- That the release had to only include signature lines for the plaintiffs and provided that the inclusion of a signature line for anyone else “for any purpose at all will be a counteroffer and rejection of this offer;” and
- That there be no language in the release indicating that it was a contract under seal.
The Insurance Company delivered a $100,000 check, a release, and other purported acceptance documents to the plaintiff. Thereafter, he returned the $100,000 check and documents to the insurance company. The plaintiff also sent a letter to the insurance company stating that it had not complied with all the terms of the offer and had therefore he rejected the offer.
The plaintiff subsequently filed a complaint against the defendant, seeking damages for injuries allegedly caused by her negligence in hitting him with her car while he was on a bicycle. The defendant answered the complaint and also filed a motion to enforce a settlement agreement purportedly created by her insurance company’s acceptance of the plaintiff’s offer to settle.
The trial court entered an order granting the defendant’s motion to enforce a settlement agreement and dismissing the plaintiff’s action. He appeals from that order.
The Decision by the Court of Appeals
The offer must be accepted unequivocally and without variance of any sort
The plaintiff argued that the trial court erred in granting the defendant’s motion to enforce a settlement agreement and dismissing his action. Presiding Judge Christopher J. McFadden, writing for a panel that included Chief Judge Brian M. Rickman and Senior Appellate Judge Herbert E. Phipps, explained, citing a 2021 decision:
[T]he version of OCGA § 9-11-67.1 in effect at the time [Ligon] made [his] settlement offer in this case was enacted against the backdrop of a large body of law on contract formation generally and settlement formation specifically. As part of that existing law, settlement agreements must meet the same requirements of formation and enforceability as other contracts. … That existing law [also] includes the fundamental principle that an offeror is the master of his or her offer and free to set the terms thereof.
Thus, Judge McFadden said that an offer may call for “acceptance by the doing of some act, as opposed to a mere oral or written statement of acceptance of certain terms.”
“An acceptance, the judge opined, “must comply with the requirements of the offer as to the performance to be rendered. An offeree’s failure to comply with the precise terms of an offer is generally fatal to the formation of a valid contract.”
Judge McFadden found that in this case, the insurance company’s offer to settle expressly provided that certain terms of the offer were material requirements of acceptance and that the failure to comply with those requirements would constitute a rejection of the offer.
The insurance company, however, failed to comply with the precise terms of the offer by failing to deliver a release that fully complied with the terms of the offer. Among other things, the release didn’t comply with the offer requirement in that:
- It included specific reference to an affidavit stating that there was no other insurance coverage available;
- The release included a signature line for someone other than the plaintiff for the purpose of notarizing the document, despite the offer expressly stating that “inclusion of a place on the release for a signature of anyone other than [the plaintiff] for any purpose at all will be a counteroffer and rejection”; and
- The release included language indicating that it was made under seal, despite the offer’s plain language that “[t]he release must not include … any alteration of the standard six-year period of limitations for written contracts … such as placing the contract under seal[.]”
The judgment was reversed because the Court of Appeals held that no settlement agreement was formed because the purported acceptance failed to comply with the terms of the offer to settle. The defendant’s insurer failed to comply with the precise terms of the offer by failing to deliver a release that fully complied with the terms of the offer. Ligon v. Hu, 2022 Ga. App. LEXIS 144 (Ga. App. March 11, 2022).
Contact an experienced Atlanta personal injury lawyer whom Atlanta residents trust every day. Please contact our lawyers at Tobin Injury Law for a free no-obligation consultation. We have worked with auto accidents victims all across the state and have worked on hundreds of settlement demands over the years.
We offer free consultations to all prospective clients and we even offer help if you decide to send your own settlement demand. Contact an Atlanta personal injury attorney at Tobin Injury Law 24 hours a day, 7 days a week by calling 404-JUSTICE (404-587-8423) or using our online contact form.