Georgia Court of Appeals Refuses to Enforce Settlement Agreement Citing Demand in “Counteroffer”

Many personal injury actions involve car or other motor vehicle accidents. Typically, the drivers’ insurance companies get involved to help settle and resolve the matter. The importance of knowing and understanding the local laws applicable to a personal injury claim cannot be overstated. In a recent case, Kemper v. Brown, Ga. Ct. App. (2014), the court threw out a purported settlement agreement, concluding that the insurance company’s response to the settlement offer constituted a counteroffer, instead of a mutually agreed upon settlement. To ensure that someone with experience and dedication handles your case, you are encouraged to contact a local Atlanta personal injury attorney with a proven success record representing victims in car accident cases.

In the case mentioned above, the plaintiff, Kemper, was injured when a vehicle driven by Brown struck her motorcycle. Kemper sustained serious injuries and was taken to Atlanta Medical Center to receive emergency treatment for her injuries. Law enforcement charged Brown with several traffic violations, including driving under the influence and reckless driving. Each party had automobile insurance: Kemper was insured by Progressive Insurance Company and Brown was insured by Equity Insurance Company, who later assigned the claim to its third-party carrier (claims administrator), Statewide Claims Services. The policy under Equity contained a $25,000 per person bodily coverage limit.

Kemper sent a demand letter to Statewide, requesting that it send the maximum amount under the insurance policy, and in response, Kemper promised to sign a limited release. She set forth a deadline and information concerning to whom the check should be made payable. In response, Statewide sent the $25,000 check attached to a letter to Kemper, agreeing to settle the claims, but adding a demand that the money received be placed in an escrow account with respect to any liens pending. Due to this language in the letter, Kemper considered it a counteroffer, rejected the terms and filed suit against Brown.

Brown filed a motion to enforce the settlement agreement. The trial court granted the motion and Kemper appealed, arguing that the purported settlement agreement was not enforceable because Brown’s response (via Statewide Insurance) was not unconditional or identical to the terms of her offer. The key element rendering Brown’s response a counteroffer was Statewide’s demand that Kemper place the settlement funds into an escrow account. The court of appeals agreed and reversed the trial court’s decision.

Essentially, the court reviewed the evidence in light of contract formation principles, and found the new terms to be a counteroffer. Statewide used the term “demand” with the respect to the escrow account, indicating that that was a condition that Kemper was required to satisfy in order for acceptance to be effective. The demand was interpreted as a mandatory direction, construed as a counteroffer rather than an unequivocal and unconditional acceptance. Based on this reasoning, the court held that no binding settlement agreement was formed.

As one can see from this case, it is important to be represented and advised by an injury attorney with experience handling settlement negotiations and communications in personal injury matters.

If you have been injured in an automobile accident due to another’s negligence, the first thing you should do after seeking medical treatment and contacting law enforcement is to contact an experienced Atlanta injury attorney as soon as possible. Stephen M. Ozcomert has over 20 years of experience handling personal injury cases, representing individuals who have been injured as a result of another’s negligent driving in Atlanta and throughout Georgia. Call us today at (404)-370-1000 to schedule your free initial consultation, or you can reach us through our website.