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Georgia Supreme Court: Holt Demands under O.C.G.A. § 9-11-67.1 Can Require Timely Payment as a Condition of Acceptance

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By Tyler Bryant Walker:

In a much anticipated decision, the Georgia Supreme Court ruled Monday that pre-suit settlement demands under O.C.G.A. § 9-11-67.1 can require performance of a specific act in order to accept the demand. The issue was before the Court on a certified question from the Eleventh Circuit asking whether the statute allows pre-suit demands to require payment as a condition of acceptance. The Supreme Court said yes.  

Enacted in 2013, O.C.G.A. § 9-11-67.1 lays out the requirements for pre-suit settlement demands for bodily injury claims involving motor vehicles. The statute requires the offer remain open for 30 days, during which time the recipient can accept the offer in writing. Upon written acceptance, the settling party has a minimum of ten days to issue payment. O.C.G.A. § 9-11-67.1(g). In the case before the Supreme Court, Grange Mutual Cas. Co. v. Woodard et al, the injured claimant made a policy-limits demand which complied with the statutory requirements. However, the demand also required payment within ten days of acceptance, noting that “timely payment is an essential element of acceptance.” The insurer accepted the offer within 30 days and then issued the check, but it was mailed to the wrong address. When the error was brought to the insurer’s attention, it offered to issue a new check and overnight it to the correct address, but the claimant refused, arguing there was no settlement because the insurer had allegedly missed the ten-day payment deadline. The insurer then filed suit to enforce the settlement.

The issue ultimately came before the Georgia Supreme Court, who ruled that O.C.G.A. § 9-11-67.1 does not prohibit a claimant from conditioning settlement upon the performance of some act, namely timely payment. While the statute does require that a demand contain certain terms (settlement amount, type of release, parties to be released), the Court reasoned there was nothing in the statute which prohibited additional settlement terms such as payment within a certain date. 

The Court declined to answer the ultimate issue in the case – whether an enforceable settlement was reached – instead sending the case back to the Eleventh Circuit for a ruling on that issue. The Eleventh Circuit will likely be tasked with deciding when payment is deemed “made” – upon issuance, upon receipt, or at some point in between? Woodard thus promises to provide greater clarity in the interpretation of O.C.G.A. § 9-11-67.1 and give litigants further guidance in responding to time-limited demands under Georgia law. Until then, the safest course of action is to ensure payment arrives within the time set forth in the demand.

 

For questions about this case, please contact Tyler Bryant Walker at Tyler.Walker@gmlj.com or (404) -926-4154. To read the Court’s opinion, click here.   

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