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Georgia Court Upholds Disputed Accident Settlement, Reverses Award of Attorney’s Fees

What constitutes a binding settlement in a personal injury matter? The Georgia Court of Appeals recently addressed this question in a case arising from a 2010 motor vehicle accident. The parties disagreed as to whether their settlement talks produced an enforceable agreement.

The accident in question seriously injured one man, who incurred significant medical expenses. The driver of the other vehicle that caused the victim’s injuries had an insurance policy with a $25,000 limit. The victim offered to settle with the driver for that amount.

The victim requested a $25,000 check, together with a limited-liability release and proof of the coverage limit by a certain date. The driver’s attorney responded by seeking clarification with respect to the terms of the limited-liability release. The attorney provided sample language and invited comments from the victim and his attorney. The victim’s attorney then responded with his own draft of a release. The driver’s attorney responded with additional proposed revisions.

When the victim’s attorney failed to respond with any further comments, the driver’s attorney sent the victim a letter unconditionally accepting the terms of the last proposal, together with the $25,000 check and other requested documentation. The letter emphasized the terms of the release remained conditional and invited further comment and revisions, if necessary.

More than two months elapsed without any reply from the victim’s attorney. Finally, the victim returned the check along with what he deemed a rejection of the driver’s “counteroffer.” The driver then filed suit in state court seeking enforcement of what he considered a binding settlement agreement. The victim filed a counter-suit on his personal injury claim.

A Partial Win for the Victim

The trial court granted summary judgment to the driver–agreeing there was a binding settlement agreement–and assessed $6,400 against the driver for attorney’s fees and costs. Normally, courts do not award such costs except in cases where a party acts in bad faith or is “stubbornly litigious.” The victim appealed both the summary judgment and the award of attorney’s fees.

Judge Stephen A. Louis Dillard, writing for a three-judge panel of the Georgia Court of Appeals, upheld the summary judgment but dismissed the award of costs. The victim’s key argument was that the driver inserted additional language into the proposed limited-liability release, and that this constituted a counter-offer. But Judge Dillard noted that the driver afforded the victim with ample opportunity to respond with his own revisions. That the victim never did so, together with the fact the additional language did not affect the basic terms of the settlement, suggested to Judge Dillard and the panel that there was, in fact, a “meeting of the minds” and thus a binding contract.

As for the question of attorney’s fees, the trial court simply exceeded its authority under the law. In Georgia, a trial court can never award attorney’s fees for cases decided at summary judgment. As Judge Dillard explained, the Georgia Supreme Court has held attorney’s fees may only be awarded after a case is adjudicated on the facts, either before a jury or a judge sitting as the trier of fact, not a judge deciding a case solely on the pleadings of the parties.