Exactly When is an Auto Accident Settlement Offer Accepted?
An appeal arose out of a January 2022 motor vehicle collision between two motorists—the accident victim (the plaintiff) and State Farm’s insured (the defendant). The costs associated with the plaintiff’s injuries exceeded the defendant’s policy limits; nonetheless, his attorney made a pre-suit offer to State Farm to settle his claims for the policy limits, which State Farm tried to accept. However, the plaintiff’s counsel rejected State Farm’s acceptance, arguing that State Farm failed to meet the terms of the demand.
The plaintiff filed suit, and the defendant filed a motion to enforce the settlement. The trial court denied the defendant’s motion, and the case proceeded to trial, resulting in a substantial jury verdict in the plaintiff’s favor.
The Court of Appeals was asked to resolve the question of whether the plaintiff’s offer to settle and State Farm’s attempted acceptance of that offer resulted in a binding settlement agreement pursuant to the 2021 version of O.C.G.A. § 9-11-67.1, which governs the communications in this case.
What Does the Statute Say?
O.C.G.A. § 9-11-67.1 governs offers made prior to the filing of an answer to settle personal injury claims arising from injuries due to automobile accidents. It was originally enacted in 2013 in an effort to address lingering ambiguities and continued litigation regarding the scope of an insurer’s duty with respect to a time-limit settlement demand once our Supreme Court determined that an insurer may be liable to its insured for a bad faith failure to settle a claim. The statute was amended in 2021 to expand upon the statutory material terms of a settlement demand and add a provision that, “unless otherwise agreed by both the offeror and the recipients in writing,” those material terms “shall be the only terms which can be included in an offer to settle made under” the statute. The 2021 amendment further added that, “the recipients of an offer to settle made under this Code section may accept the same by providing written acceptance of the material terms outlined in subsection (a) of this Code section in their entirety.”
State Farm and the Settlement Offer
In this case, following the motor vehicle accident, the plaintiff’s counsel sent State Farm a letter on May 23, 2022, offering to settle his claims against the defendant in exchange for payment of the $100,000 personal-injury policy limit. The settlement offer explicitly set forth the material terms being made pursuant to O.C.G.A. § 9-11-67.1(a)(1) that included that:
- the offer must be accepted within 35 days;
- the monetary payment must be for the full amount of the policy limits;
- the release would extend only to the defendant, and the plaintiff would agree to release the defendant, except to the extent other insurance coverage was available to cover the plaintiff’s claims;
- the release would be a limited release that preserved the plaintiff’s right to seek all other insurance coverage through any other policies of insurance;
- the claims being released would include only the personal injury/bodily injury claims held by the plaintiff against the defendant; and
- State Farm must provide written acceptance of all of the material terms pursuant to O.C.G.A. § 9-11-67.1(b)(2).
The letter provided that “the material terms made pursuant to O.C.G.A. 9-11-67.1(a)(1), outlined immediately above, must be accepted unequivocally and without variance of any sort.”
Relevant to this appeal, the settlement offer further provided that in addition to the materials terms made listed above pursuant to O.C.G.A. 9-11-67.1(a)(1), the following actions must be completed to form a binding settlement contract, and completion of each and every one of the following actions, without variance of any sort, is required under this written offer of compromise to form a binding settlement agreement:
Pursuant to O.C.G.A. 9-11-67.1(g), State Farm is required to make payment within forty-five (45) days from State Farm’s receipt of this offer… State Farm’s payment may be made through any of the methods outlined under O.C.G.A. 9-11- 67.1(f). However, should payment be made by money order, cashier’s check, draft, or bank check, such payment shall be made payable to the plaintiff’s law firm in trust for the plaintiff.
The letter went on to state:
This offer of compromise cannot be accepted by a mere statement of unconditional acceptance of this offer; instead, acceptance of this offer requires full performance of all actions required herein – without variance of any sort – in addition to written acceptance of the material terms of this offer made pursuant to O.C.G.A. 9-11-67.1(a)(1).
State Farm’s attorney sent a letter conveying State Farm’s “acceptance of your May 23, 2022 settlement demand” that included a proposed limited release and a sworn statement by a State Farm representative that all policies had been disclosed. The letter also indicated that a check would be forthcoming. When the check arrived, it was issued to that law firms & the plaintiff and included a notation on the back that it “MUST BE ENDORSED BY ALL PAYEES.”
The plaintiff subsequently filed a negligence action against the defendant, contending that the non-conforming check (the inclusion of an “&” in the payment line and the requirement that the check must be endorsed by all payees) amounted to a rejection of the settlement offer. The defendant answered the complaint, then filed a motion to enforce the settlement agreement. Following a hearing, the trial court denied the motion, and the case proceeded to trial. The jury awarded a substantial monetary award in favor of the plaintiff, and the trial court entered judgment on the verdict.
The defendant contended that his written acceptance of the settlement offer created a binding settlement agreement exclusively as to the material terms of O.C.G.A. § 9-11-67.1(a) and that the additional terms with which he didn’t comply were irrelevant with respect to the formation of a binding contract. The Court disagreed.
State Farm bound by the acceptance of the terms of the offer
Presiding Judge Brian M. Rickman of the Georgia Court of Appeals reasoned that although the 2021 amendment to O.C.G.A. § 9-11-67.1 gave an insurer the option of accepting a settlement offer only under the statutory terms in subsection (a), it didn’t eliminate the freedom to mutually agree in writing to be bound by conditions outside of those terms.
Here, State Farm accepted the plaintiff’s May 23, 2022 settlement demand without limitation. As such, it agreed to be bound not only to the statutory terms, but also by the additional conditions set forth in the letter, including the demand that, should State Farm pay by check, it must be made out as directed “without variance of any sort.”
The judgment was affirmed. McGovern v. Rowland, 2026 Ga. App. LEXIS 351 *; 2026 LX 334792 (Ga. App. June 29, 2026)
Contact us
As you can see, settlement offers need to be scrutinized very carefully. Work with the pros.
Contact an experienced Atlanta personal injury lawyer Atlanta residents trust every day. We’ve worked with auto accidents victims all across the state. We offer FREE consultations to all prospective clients. Contact an Atlanta personal injury attorney at Tobin Injury Law 24 hours a day, seven days a week by calling 404-JUSTICE (404-587-8423) or using our online contact form.