How Should You Respond to an Insurance Company’s Offer of Settlement?

How Should You Respond to an Insurance Company’s Offer of Settlement?

A recent state court case addressed an insurance company’s Motion to Intervene and Motion to Enforce Settlement and was decided by a comparison of the offer and the response.

This case arises out of an automobile collision between two Georgia motorists on December 31, 2021 in a parking lot located on Roosevelt Highway in Fulton County. The plaintiff sued alleging he was injured due to the defendant’s negligence and sought damages for his injuries.

Before trial, Judge Susan E. Edlein granted the parties leave to file motion on the issue of settlement, and the insurance company filed its Motion to Intervene and Motion to Enforce Settlement.

The Court’s Analysis

Judge Edlein wrote that under Georgia law, an agreement alleged to be in settlement and compromise of a pending lawsuit must satisfy the same requisites of formation and enforceability as any other contract.

To that end, 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 won’t amount to an acceptance, so as to result in a contract, unless it’s unconditional and identical with the terms of the offer. To constitute a contract, the offer must be accepted unequivocally and without any variance.

The judge went on to explain that no contract exists until all essential terms have been agreed to, and the failure to agree to even one essential term means there’s 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.

An offeree’s failure to comply with the precise terms of an offer is generally fatal to the formation of a valid contract, the judge wrote, quoting a 2023 decision. In addition, the party asserting the existence of a contract has the burden of proving its existence and its terms.

On October 26, 2022, the plaintiff made an offer to settle his case pursuant to O.C.G.A. § 9-11-68. The Offer attached a “General Release.” The Offer was served on the defendant’s counsel and sent to the insurance company.

On November 14, 2022, the insurance company’s claims supervisor called the plaintiff’s attorney to accept his Offer and followed-up with an email. In the claims supervisor’s email, she “sent a release of claims for the plaintiff to sign as part of the agreement and clarified that a W-9 would need to be sent to [her] so that payment could be made with Plaintiff’s counsel included on the check.” On November 21 and December 6, 2022, the claims supervisor emailed the plaintiff’s counsel’s office regarding the release.

On January 4, 2023, the plaintiff’s attorney 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 failed to provide an executed W-9 form.

The parties didn’t dispute that the plaintiff sent a General Release and that the insurance company returned a “Release of All Claims.” The insurance company argued 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 counter-offer.

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.”

The plaintiff’s General Release offered to release:

FOR THE SOLE CONSIDERATION OF Twenty-Five Thousand Dollars (S25,000.00), the receipt and sufficiency whereof is hereby acknowledged, Undersigned hereby releases and forever discharges MICHAEL THE DEFENDANT, their heirs, executors, administrators, agents and assigns, hereinafter called ”Releasees,” none of whom admit any liability but all expressly deny any liability, from any and all claims, demands, damages, actions, causes of action or suits of whatsoever kind or nature, and particularly on account of bodily injuries, known and unknown, and which have resulted or may in the future develop, sustained by COLUMBUS THE PLAINTIFF, or arising out of damage or loss, direct or indirect, sustained by Undersigned in consequence of an incident that occurred on or about December 31, 2021, in Fulton County, Georgia.

The insurance company’s Release read as follows:

Judge Edlein said that a purported acceptance of a plaintiff’s settlement offer which 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. The differences in the releases here constituted a counter-offer. As a result, the settlement agreement was not enforceable.

As a consequence, the insurance company’s Motion to Enforce Settlement Agreement was denied. Bell v. Richardson, 2023 Ga. State LEXIS 3501 (Ga Fulton County October 12, 2023).

Contact Us

Offers and releases from insurance companies can be tricky, and you should work with an experienced Atlanta personal injury lawyer Atlanta residents trust every day. At Tobin Injury Law, we offer a free no-obligation consultation. We have represented accident 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.