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Posted by H. Lee Pruett

On June 23, 2006, a truck driver insured by Great West Casualty Company clipped a car while changing lanes, causing an accident. Minutes later, another truck rear-ended a car which had slowed because of the first accident. Nora Bloomfield, a passenger in the car, was killed in the second collision. Bloomfield’s husband brought a wrongful death action against both truck drivers, their employers, and their insurers. The Great West defendants made a $25,000 offer of settlement pursuant to O.C.G.A. § 9-11-68. Plaintiff rejected it. At trial, the jury found the second truck driver 100% at fault for the wrongful death. Great West then sought $69,000 in attorney’s fees pursuant to the statute as the amount awarded-$0-was less than the amount offered to settle. The trial court denied the request on the grounds that the $25,000 offer was not made in “good faith,” and, in Great West Cas. Co. v. Bloomfield, Case No. A11A1454 (Ga. Ct. App., Dec. 1, 2011), the Court of Appeals affirmed. This surprising result should be a reminder that attorney’s fees are not automatic even when the verdict clearly authorizes their payment and the defendant gives good reasons for the offer.

Under the statute, if the plaintiff rejects the defendant’s offer of settlement, and the final judgment is one of no liability, or less than 75% of the offer, “the defendant shall be entitled to recover reasonable attorney’s fees and expenses,” dated from the rejection of the offer. O.C.G.A. § 9-11-68(b)(1) (emphasis added). The trial court, however, “may determine that an offer was not made in good faith” and disallow an award of attorney’s fees. O.C.G.A. § 9-11-68(d)(2). In Great West, the trial court stated the defendant’s $25,000 offer was neither reasonable nor realistic in this wrongful death case, citing the Great West driver’s payment of his traffic citation (for the first accident), the fact that Great West made the offer without interviewing or deposing the first police officer on the scene, and Great West’s $1 million offer at trial absent any new facts or discovery.

Deferring to the trial court’s broad discretion, the Court of Appeals held first that a defense verdict alone is insufficient in determining whether a settlement offer is made in good faith. “[W]hile the defense verdict is relevant to the issue of good faith, it is not conclusive.” Great West argued there were two separate collisions, and the jury found the second truck driver completely at fault for Plaintiff’s damages; Great West made the nominal offer because it believed its driver bore no responsibility. Ignoring the whole notion of proximate cause, however, the Court of Appeals said simply, “without the first collision, there would not have been a second one.” The Court also found the trial court properly considered Great West’s $1 million offer at trial as a factor in determining whether the first offer was in good faith, despite Great West’s explanation that it was simply reacting to “the events as they unfolded during trial,” including compelling testimony about the deceased’s horrible suffering after the accident.

In a spirited dissent joined by Judge Blackwell, Judge Adams dismantled one by one the trial court’s reasons for finding bad faith. First, the Great West driver’s payment of his traffic citation “is not, by itself, an admission of guilt.” Even if it was an admission, it went to the first accident only, and Great West maintained throughout the case that the first accident was not the proximate cause of the death. Second, Great West’s failure to interview the police officer who investigated the first accident should not have been a factor because, one, there is no requirement under the statute at issue that discovery be completed before an offer is made, and, two, Great West could not have anticipated that the officer would testify concerning the second accident. Finally, the trial court erroneously faulted Great West for making the $1 million offer at trial without any new discovery compelling the offer. The dissent argued that it was perfectly reasonable for Great West to react to the evidence unfolding at trial and to be concerned that the testimony “about Nora Bloomfield’s pain and suffering as she struggled to get out of the car could have a profound effect on the jury” and cause it to find against both truck drivers. “As any litigator knows, no guarantee exists that a jury will follow the law urged upon them, especially when a plaintiff appears to be deserving of a recovery.”

As the Great West decision now stands, however, there is no guarantee a defendant will get attorney’s fees, even when it complies with the offer of settlement statute, makes what it considers a good faith offer based on an assessment of no liability, and gets a defense verdict at trial.