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Georgia Court Reverses $700,000 Auto Accident Verdict

Despite what you might think, most auto accident claims are settled out of court between the injured victim and the negligent driver’s insurance company. Only when settlement negotiations break down will a plaintiff normally resort to litigation, which requires a significant commitment of time and resources. In many cases, it is the defense’s unnecessary delays that cause the settlement talks to fail in the first place.

Stephens v. Castano-Castano

Consider this recent decision from the Georgia Court of Appeals. This case began when a defendant failed to respond in time to a settlement offer. Although the plaintiff proceeded to trial and won a substantial jury verdict, the Court of Appeals ordered a new trial based on an erroneous ruling by the trial judge.

The accident itself took place sometime in 2013. In September 2013, the plaintiff’s personal injury lawyer sent the defendant’s auto insurance company a settlement demand letter. This is common practice in personal injury claims. Here, the letter said the plaintiff would settle any outstanding claims against the defendant in the amount for the limit of the defendant’s liability policy, which was $25,000.

The demand letter included a 30-day time limit for acceptance. About 12 days into this 30-day period, a representative of the insurance company contacted the plaintiff’s lawyer and said she needed more time to obtain instructions from the defendant’s attorney. The plaintiff’s attorney agreed to wait to hear back from defense counsel, but did not extend the actual 30-day deadline. In fact, it was not until November 5–two months after the plaintiff’s attorney sent the demand letter–that defense counsel made contact and indicated they would agree to pay the $25,000. At this point, however, the plaintiff declared the defendant had “failed to timely respond to the settlement demand” and proceeded to file a personal injury lawsuit.

Before the trial court, the defendant argued that its belated acceptance of the plaintiff’s settlement offer created a legally binding contract. The judge disagreed. The case proceeded to trial and the jury ruled in favor of the plaintiff and awarded $700,000 in damages.

Unfortunately, the Georgia Court of Appeals reversed the judgment due to another issue unrelated to the issue of the aborted settlement talks. At trial, the jury heard expert testimony from the plaintiff’s treating physician regarding her injuries in the car accident. The defense wanted to cross-examine the doctor with respect to “his financial interest in the case.” More precisely, the defense wanted the jury to know that the doctor “had a lien on any recovery in the case,” which may have biased his testimony.

The trial judge refused to allow this line of questioning. The Court of Appeals said that was a mistake. The doctor’s financial interest “highly relevant to the issue of his credibility and potential bias.” By holding the lien, the doctor “has become an investor of sorts in the lawsuit,” and the jury had a right to know that fact before reaching its decision. Accordingly, the Court of Appeals ordered a new trial.

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