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Georgia Court Refuses to Enforce Settlement

In many Georgia litigation cases, actually filing a complaint in court is the option of last resort. Particularly in accident cases where the liability of one party is clear, both parties can typically avoid the time and expense of court time if they can agree to a settlement before a complaint is ever filed. These types of pre-filing resolutions are increasingly popular as parties look to minimize risk and keep costs low. When engaging in settlement, however, the parties must be careful to keep tabs on pending offers and upcoming deadlines or risk losing the opportunity to settle prior to litigation.

This is illustrated in a recent case before the Georgia Court of Appeals. In that case, Y.C. was driving her vehicle in Georgia when she was injured in an accident where M.S. hit her car. After the two parties exchanged information, Y.C. hired an attorney and the attorney sent a demand letter to M.S. for the amount of M.S.’s policy limits, $25,000. The demand letter indicated that M.S. had 30 days to provide payment or the offer would be withdrawn. Over the next few weeks, the parties exchanged emails about the details of a possible settlement, including inquiries into whether any liens existed and how payment would be made. M.S.’s counsel explained that he was “facilitating settlement of the matter.” However, the 30 days passed without actual payment of the demand.

Several weeks later, M.S.’s attorney tendered the payment of the $25,000 check, but Y.C.’s counsel explained that they were rejecting the check because M.S. had delayed beyond the deadline imposed in the demand letter. Y.C. then filed a lawsuit against M.S. for negligence. M.S. filed a motion to enforce the settlement agreement between the parties, but the court denied it, finding that under the terms of the demand letter, M.S. had not accepted Y.C.’s offer. The case continued to trial and the jury awarded Y.C. $700,000. M.S. appealed.

On appeal, M.S. argued that the court should have considered outside evidence and the context of the parties’ negotiations in determining whether an offer and acceptance of settlement had occurred. Specifically, M.S. argued that when his attorney indicated he was facilitating “settlement” and asked about the procedure for payment, this was clearly meant to be an acceptance of the settlement offer.

The appeals court disagreed. It noted that the demand letter was very express in making clear that the demand would expire within 30 days if it was not clearly accepted and payment was not made. While the parties exchanged emails about information and logistical concerns, M.S.’s attorney never expressly agreed to the $25,000 amount nor stated in writing that he was accepting Y.C.’s offer. The court of appeals explained that while outside evidence can sometimes be used to infer the intent of the parties where language is ambiguous, it cannot be used to insert terms into writings that do not actually exist. Here there was no language about acceptance or amount, and M.S. could not use outside circumstances to “suggest” that that is what the email exchanges were supposed to mean.

M.S. also argued that to the extent there was confusion about whether the settlement was accepted, that was an issue for the jury to decide. Again, the court of appeals disagreed. It noted that whether acceptance occurred was essentially a question of contract formation, and that the issue of contract formation is a question of law for the court to consider.

When engaging in settlement negotiations, it is imperative that parties do so with express language and clear instructions. One should never assume that another party understands what you mean, but should instead make sure that it is conveyed in clear and unequivocal language. Atlanta car accident attorney Stephen M. Ozcomert can assist you in settlement negotiations and, if those are not successful, aggressively fight for your interests in court. Call us today at (404) 370-1000 to schedule a free initial consultation, or you can reach us through our website.

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