Facts
In the case of Pierce v. Banks, Aaron Pierce, Plaintiff, sought damages from Kyndyl Banks and Octavius Avery Smith, Defendants, for injuries that arose out of a motor vehicle accident. Plaintiff sent a pre-suit settlement offer for the policy limits of $25,000 from the insurance company pursuant to O.C.G.A. § 9-11-67.1.
The offer included the following terms: accept the terms of the offer in writing within 31 days; if a payee is required, it should be paid to the order of “Aaron Pierce and Brooks Injury Law, LLC”; payment had to be received 15 days after written acceptance of the offer; and, that any settlement payment or any other documents sent by the insurance company must not include any “terms, conditions, descriptions, expirations, or restrictions that are not expressly permitted in [the] offer.”
Counsel for the insurance company responded with a letter, noting that the insurer “authorized [her] to accept” the offer. The acceptance package with the letter also included a settlement check, which was paid to the order of “Aaron Pierce and Brooks Injury Law LLC” and included a notation that the check was void after 180 days.
Counsel for Plaintiff responded to the insurance company, letting the insurer know that the “purported acceptance” was actually a rejection since it was not identical to the offer. Plaintiff explained that the letter didn’t state that the offer was accepted, that the settlement check payee was missing a comma, that payment was not received 15 days AFTER the written acceptance, and that the check included an additional provision about the check being void after 180 days.
As a result, Plaintiff filed the lawsuit and sought summary judgment on the question of whether the parties reached a pre-suit settlement. Defendants opposed the motion for summary judgment and filed a motion to enforce the settlement. The trial court denied Plaintiff’s motion and granted Defendants’ motion to enforce the settlement. Plaintiff appealed.
Issue & Holding
The issue in this case is whether there was a binding pre-suit settlement agreement pursuant to O.C.G.A. § 9-11-67.1 (before the statute was amended on July 1, 2021). The Court of Appeals held that there was no pre-suit settlement agreement because Defendants failed to unequivocally accept the settlement offer with identical terms to the offer. The Court of Appeals reversed the judgment of the trial court and remanded the case for further proceedings.
Reasoning
The Court of Appeals held that the trial court erred in granting the motion to enforce the settlement because the offeror has the freedom to set the terms for an offer to be accepted and the purported acceptance did not comply with the settlement offer.
The type of contract at issue in this case is a unilateral contract rather than a bilateral contract. A unilateral contract requires an acceptance with an act that is set by the unilateral offer. Grange Mut. Cas. Co. v. Woodard, 300 Ga. 848 (2017). The offer can only be accepted by doing the required act. Barnes v. Martin-Price, 353 Ga. App. 621, 624 (2020).
On the other hand, a bilateral contract is one in which the parties had a mutual intent to be bound by the contract. This type of contract exists based on an agreement of material terms. Defendants argued that the settlement agreement occurred because they complied with the material terms of the offer and did not need to agree on non-material matters for a contract to form. The Court of Appeals disagreed with this argument since Plaintiff presented a unilateral offer that required certain terms to be complied with as an act of acceptance.
Specifically, the Court of Appeals agreed that the insurance company’s failure to send the settlement check 15 days after the written acceptance was a failure to comply with the terms of the offer, since the insurance company sent the check at the time of the written acceptance—before the 15 day requirement. (In the concurring opinion, we learn that Plaintiff required the check to be sent 15 days after written acceptance in order to comply with terms of his own health insurance company and the medical benefits reimbursement statute.)
Additionally, the Court of Appeals found that the note on the settlement check about the check being void after 180 days was an additional term, making the acceptance non-identical to Plaintiff’s offer. Defendants argued that it is the bank who added the additional note; therefore, Defendants complied with the offer. The Court of Appeals did not find this argument convincing because Defendants could have chosen another form of payment to comply with the terms of the offer; however, Defendants elected a payment method that could not satisfy the terms of the offer.
Based on the Court of Appeals’ decision on these issues, it did not address the plaintiff’s argument that there was no settlement because counsel for the insurer had merely stated that a settlement was “authorized” instead of actually accepting it. The Court of Appeals also declined to address the issue of whether the missing comma in the settlement check invalidated the acceptance.
Conclusion
Pierce v. Banks reminds us that an offeror has no restriction with setting the terms of the offer in a settlement agreement. However, the Court does caution parties not to use this freedom for gamesmanship versus zealous advocacy. (Pierce, concurring opinion). Additionally, Pierce reminds us that a settlement offer is a unilateral offer that requires performance in order for a settlement agreement to be formed.
To learn more about The Champion Firm and the personal injury practice areas we cover, visit our main website here. If you’re an attorney seeking to refer a case or partner with us as co-counsel, learn more here.
Citation: Pierce v. Banks, et al., No. A23A0394 (Ga. Ct. App. June 28, 2023)
