Facts
In Redfearn, the Plaintiffs’ father was struck and killed while inside a disabled vehicle in the grassy area of the northbound emergency lane on Interstate 85.
As a result of the subject collision, the Plaintiffs made a one-time policy limit settlement offer to State Farm pursuant to the 2021 version of O.C.G.A. § 9-11-67.1. The Plaintiffs’ offer, among other things, contained a provision requiring payment be made 41 days after State Farm's receipt of the offer, and another which stated:
[a]s an act necessary to accept this Offer, State Farm must draft and deliver a limited release that complies with the requirements of this Offer exactly as they are specified, required, and stated in this Offer, and any variance between the language of the limited release and the requirements of this Offer exactly as they are specified, required, and stated in this Offer, even if minor or accidental, will constitute a rejection of this Offer.
The offer further stated that “it will be a rejection of this Offer if the settlement payment or any other document sent by State Farm includes any terms, conditions, descriptions, expirations or restrictions that are not expressly permitted in this Offer.”
Eight days later State Farm wrote back their intention to accept the Plaintiffs' offer enclosing a check and a proposed release. In the letter, State Farm wrote that it “agrees that any inconsistencies between [the Plaintiffs’] Offer and O.C.G.A. § 9-11-67.1 do not invalidate [the Plaintiffs’] Offer and the terms, conditions and acts required by [the Plaintiffs’] Offer are controlled by [the Plaintiff’s] Offer and not by O.C.G.A. § 9-11-67.1.
The Plaintiffs returned claiming that State Farm failed to accept their offer and filed the subject action. The Defendant answered and moved to enforce the settlement. The trial court denied the Defendant’s motion finding that they failed to accept the Plaintiffs’ offer by:
- Requiring payment to be endorsed by all payees
- Omitting commas in the payee's name on the check
- Including claim number, named insured, and date of loss on the payment
- Sending payment eight days after the offer was received
- Failing to deliver a release containing identical language to the offer
The Defendant filed an interlocutory appeal.
Issues & Holdings
The court considered two issues under the 2021 version of O.C.G.A. § 9-11-67.1. First, whether a binding settlement agreement was created regardless of whether the Defendant agreed with the Plaintiffs’ additional non-statutory terms. Second, regardless of O.C.G.A. § 9-11-67.1, whether State Farm performed all acts necessary to perfect acceptance without variance.
The court ultimately held that due to the deficiencies in State Farm’s purported acceptance, there was no binding settlement agreement and affirmed the trial court’s denial of the Defendant’s motion to enforce the settlement.
Reasoning
First, the court held that a binding settlement agreement was not created under O.C.G.A. § 9-11-67.1, despite State Farm’s contention that it accepted the Plaintiffs’ offer by communicating its acceptance of the offer’s material statutory terms. The court observed that offers under O.C.G.A. § 9-11-67.1 have traditionally been viewed as unilateral contracts, or offers that invite acceptance by performance rather than by communication. Thus, in order to accept the offer, insurers are required to accept by satisfying the plaintiff’s offer “without variance of any sort,” and a failure to comply with the precise terms of the offer is fatal to the formation of a valid contract.
Second, the court held that because the settlement check required an additional condition, the parties did not have a meeting of the minds. Therefore, it had not performed all necessary acts to perfect acceptance. The court expressly did not consider the other deficiencies in State Farm’s purported acceptance, finding the check restriction alone was enough to preclude acceptance.
Conclusion
In 2024, O.C.G.A. § 9-11-67.1 underwent significant changes for the first time in over a decade. As illustrated by Redfearn, O.C.G.A. § 9-11-67.1 was a plaintiff-supportive rule. It gave plaintiffs great control over the terms of their offers, and a defendant’s failure to strictly adhere to those terms exposed them to excess liability.
Subsection (a) now states “[a]ny offer to settle a tort claim for personal injury [. . .] from a motor vehicle collision shall be an offer to enter into a bilateral contract. Thus, the court’s reasoning above is now likely abrogated by statute. Notably, subsection (g)(1)(A) now states “ there shall be no civil action arising from an alleged failure by the recipient [. . .], where the recipient provides the offerer [. . .] a writing that purports to accept in their entirety the material terms of the offer, with the exception of the amount of payment.
The 2024 changes do not end there. The statutory terms provided under subsection (b) include:
- The required date of acceptance by the recipient
- The amount of payment
- The party the claimant will release
- The type of release
- The claims to be released are now considered “material terms”
Thus, any additional terms or conditions than those listed in subsection (b) are now considered “immaterial.”
Significantly, subsection (c) provides that the variance of the recipient of an immaterial term no longer subjects them to a civil action from a failure of the recipient to accept an offer to settle.
Redfearn would have likely had a different outcome under the 2024 version of the statute. State Farm’s communication of acceptance of an offer’s material terms would likely be enough to create an enforceable bilateral contract. Even if it didn’t, under the 2024 version, State Farm would have faced limited exposure for failure to meet the immaterial terms of the plaintiffs’ offer.
This is not an exhaustive list of all the 2024 amendments O.C.G.A. § 9-11-67.1. Plaintiff’s lawyers should carefully consider the new construction of the statute, and ensure subsequent demands adhere to its requirements.
Citation: Redfearn v. Moore, 371 Ga. App. 655, 902 S.E.2d 233, A24A1028 (Ga. Ct. App. May 23, 2024)
