Articles Posted in SETTLEMENT

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Posted by Susan J. Levy and H. Lee Pruett

In almost every case that crosses our desks these days, plaintiffs make an offer of settlement and set a time limit for acceptance, striking fear in the heart of my clients who then ask: will a court find that we acted in bad faith by refusing to settle within the time limit? The seminal case on this issue is Southern General Ins. Co. v. Holt, 262 Ga. 267, 416 S.E.2d 274 (1992). In Holt, the plaintiff’s attorney made a time-limited settlement offer for policy limits of $15,000. The plaintiff’s attorney advised the insurer the plaintiff’s medical bills totaled more than $10,000 and the lost wages exceeded $5,000. The letter included a doctor’s report indicating the plaintiff had a herniated disc, and included medical bills totaling over $6,000. The plaintiff’s attorney later sent proof of additional expenses of over $4,000. In a last letter to the insurer, the plaintiff’s attorney extended the offer to settle within policy limits for five additional days and included in the letter a certified copy of the plaintiff’s complete medical records. The insurer neither sought more time to evaluate the claim nor responded to the offer before it expired. The insurer offered to settle the case within limits only after the plaintiff’s attorney had withdrawn the offer. A jury returned a verdict in favor of the plaintiff for $82,000. The insured assigned to the plaintiff her claim against the insurer for negligent or bad faith refusal to settle within the policy limits. The plaintiff in this suit sought the excess of $67,000, plus interest.
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Posted by Christina Cribbs
The Supreme Court of Georgia issued a long-awaited opinion in McReynolds v. Krebs on March 23, 2012. Both the plaintiffs’ bar and defense lawyers were anxious to learn how the Supreme Court would interpret Georgia’s Apportionment statute (1). While Plaintiff Krebs prevailed in this case, it is likely that the future implications of the Krebs decision will be more favorable to defendants than to plaintiffs.
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Posted by H. Lee Pruett

The Georgia Court of Appeals recently issued an opinion which should assist defendants seeking to enforce settlement agreements. In Smith v. Hall, Case No. A11A1042 (Ga. Ct. App., July 21, 2011), the plaintiff’s attorney sent a letter to the defendant’s attorney demanding insurance policy limits of $25,000 by a certain date. The letter also stated that any deviation or delay in the acceptance would be considered a rejection. Defendant’s attorney wrote back within the deadline, stating the demand was accepted, and including a check for $25,000 along with a release, affidavit of no liens, and an attorney certificate of no liens. Defendant’s attorney wrote that the general release pertained to his client and his client’s insurer, that he understood there were no other parties or insurance involved, but if there were, they would consider a limited release so Plaintiff could pursue any other insurance. Plaintiff’s attorney returned the check and said the response was a rejection of the demand/offer. Defendant filed a motion to enforce the settlement agreement. The trial granted the motion, and Plaintiff appealed.

The Court of Appeals affirmed. Plaintiff argued that there was no acceptance because it included a general release which sought to release parties other than Defendant. The Court rejected this argument and agreed with Defendant that the settlement documents included with the letter “were not a mandatory element.” Defendant unequivocally accepted the demand by stating, “we hereby accept your demand for settlement.” Defendant’s “inclusion of a general release was merely a suggestion of how to terminate the lawsuit.” To effectively accept the offer to settle, it was not necessary for Defendant to present a release “in a form acceptable to plaintiff.” The Court distinguished Johnson v. Martin, 142 Ga. App. 311 (1977), in which the Court held there was no settlement where the defendant’s acceptance of the offer came with a release which included parties other than the defendant. By contrast, in Smith, Hall was the only named defendant, and “she was willing to discuss the terms of a release so that Smith could pursue his claims to the extent there was other insurance.”