When is a Settlement Release a Counteroffer?

When is a Settlement Release a Counteroffer in an Auto Accident Case?

A judge decided an insurance company’s Motion to Intervene and Motion to Enforce Settlement stemming from an automobile accident in a parking lot on Roosevelt Highway in Fulton County, Georgia. At issue was whether the parties entered into a valid settlement agreement.


After a car accident in December 2021, the plaintiff filed a personal injury lawsuit alleging he was injured due to the defendant’s negligence and sought damages for his injuries.

In October 2022, the plaintiff made an offer to settle his case under Georgia’s Offer of Settlement, O.C.G.A. § 9-11-68. The offer attached a “General Release” and was served on the defendant’s counsel and sent to the insurance company. A few days later, the insurance company’s claims supervisor called the plaintiff’s attorney to accept the plaintiff’s offer and followed up with an email. In the email, she sent a release of claims for the plaintiff to sign as part of the agreement and clarified that she would need a W-9 so payment could be made. The claims supervisor emailed the plaintiff’s counsel two more times regarding the release.

On January 4, 2023, the plaintiff’s counsel sent a letter to the claims supervisor that read, in part, “We do not accept your offer of $25,000.00 to settle this claim.”

The insurance company argued it didn’t send the settlement check because the plaintiff didn’t provide an executed W-9 form.

The Court’s Analysis

Judge Susan E. Edlein in Fulton County State Court wrote that there are well-settled principles that guide an inquiry into whether parties entered into a settlement agreement. In a 2023 decision, the Court of Appeals explained:

Under Georgia law, an agreement alleged to be in settlement and compromise of a pending lawsuit must meet the same requisites of formation and enforceability as any other contract. In this regard, it is well settled that an agreement between two parties will occur only when the minds of the parties meet at the same time, upon the same subject matter, and in the same sense. An answer to an offer will not amount to an acceptance, so as to result in a contract, unless it is unconditional and identical with the terms of the offer. To constitute a contract, the offer must be accepted unequivocally and without variance of any sort. No contract exists until all essential terms have been agreed to, and the failure to agree to even one essential term means there is no agreement to be enforced. In determining if parties had the mutual assent or meeting of the minds necessary to reach agreement, courts apply an objective theory of intent whereby one party’s intention is deemed to be that meaning a reasonable person in the position of the other contracting party would ascribe to the first party’s manifestations of assent.

In addition, an offeree’s failure to comply with the precise terms of an offer is generally fatal to the formation of a valid contract, and the party asserting the existence of a contract has the burden of proving its existence and its terms.

Judge Edlein noted that the parties didn’t dispute that the plaintiff sent a General Release and the insurance company returned a “Release of All Claims.”

The insurer asserted that it accepted all the essential terms of the plaintiff’s offer, and its release neither altered the terms of the plaintiff’s offer nor constituted a counteroffer. But the plaintiff responded that the insurance company “actually made a counter-offer when it changed key conditions of the Offer of Settlement including the general release to be executed.”

But the judge wrote that a purported acceptance of a plaintiff’s settlement offer that imposes conditions or attempts to release parties other than the named defendant-offeree will be construed as a counter-offer to the offer to settle for the policy limits.

Here, the differences in the releases constituted a counter-offer. As a result, the settlement agreement wasn’t enforceable, and the insurance company’s Motion to Enforce the Settlement Agreement was denied. Bell v. Richardson, 2023 Ga. State LEXIS 3501(Ga. Fulton Cnty. October 12, 2023).

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