Pre-Lawsuit Settlement Offer Can Condition Timely Payment

Some people are surprised to learn that compensation for car accident injuries and wrongful death does not always require a case to go to trial. In fact, some cases may not even require a lawsuit at all. car insurance

Although you should never accept an insurance company’s offer for pre-suit settlement without first discussing the matter with an experienced accident lawyer, there are some instances where your attorney can negotiate a fair deal with insurers without the time and expense of a lawsuit.

Recently, the Georgia Supreme Court considered a certified question from the U.S. Court of Appeals for the Eleventh Circuit regarding whether it’s lawful to set certain conditions that require action – such as timely payment – in order for the agreement to be valid. The court ruled that nothing in state law prohibits a claimant from making conditions on a pre-suit offer. 

According to the court’s opinion, the facts of the auto accident were not in dispute. Defendant driver was operating his car in Georgia when he struck a pickup truck operated by plaintiff. Plaintiff’s adult daughter was a passenger in that vehicle, and she was killed instantly. Plaintiff also suffered injuries.

Defendant’s vehicle was insured under a personal policy issued by defendant insurer, which carried liability limits of up to $50,000 per person and a maximum of $100,000 per accident.

The insurer assigned the claim to one of its agents. Plaintiffs (driver and his wife) hired an attorney. That injury lawyer sent the insurance agent a settlement offer, which entailed a limited release of claims against the driver and his auto insurer in exchange for a payment of the $100,000 policy limit. But that wasn’t all. Contained in boldface writing were certain conditions to the agreement, with which defendants were required to “strictly and fully comply.” Among those conditions was a provision indicating defendant had to notify plaintiff’s attorney of their decision to accept in writing within 30 days of the offer’s receipt. Payment by check was to occur within 10 days of written acceptance. The notice made it clear that, “Timely payment is an essential element of acceptance.”

Both sides agreed the insurer had until the end of July 2014 to accept. Two days before the deadline, the insurance agent sent a written letter indicating acceptance of the settlement offer. That letter indicated two checks for $50,000 each would follow in the next 10 days. The agent then e-mailed the attorney seven days later to say the checks were being issued that day.

However, two weeks later, plaintiff’s attorney e-mailed to say the checks never arrived. The insurer offered to reissue new checks and overnight them, but the attorney rejected this offer. The agent nonetheless wrote the attorney’s office and included the settlement checks in this correspondence, wherein she apologized for the delay, explaining there had been an error in addressing them to the attorney’s office.

Plaintiff’s attorney rejected the checks, and sent a return letter saying the untimely response to the settlement offer meant he would be filing a personal injury lawsuit. This speaks to the fact that plaintiff’s attorney had confidence that he would be able to win more at trial than in the settlement.

The insurer responded by filing a lawsuit against plaintiffs for breach of contract. Both parties filed cross motions for summary judgment. Plaintiffs argued there was no contract because the contract was contingent upon the insurer remitting timely payment, which it failed to do.

The Eleventh Circuit certified the question to the state supreme court regarding whether the law prohibits pre-suit offers from being conditioned in this way. The court then ruled: It does not.

Contact the Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:

Grange Mutual Casualty Co. v. Woodard, March 6, 2017, Georgia Supreme Court

More Blog Entries:

Court: Auto Insurance Still Required Despite Driver’s Sudden Emergency, March 10, 2017, Wrongful Death Attorney Blog

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