Ga. Court of Appeals Rules Family Accepted Binding Settlement Offer Arising From Fatal 2014 Accident

It is not uncommon following an auto accident for the negligent driver’s insurance company to make a settlement offer. If the victim accepts the offer, that forms a legally binding settlement agreement. In other words, if the victim later tries to back out of the deal, the insurer has the right to go to court and seek enforcement of the original settlement.

Barnes v. Martin-Pierce

This is exactly what happened in a recent case before the Georgia Court of Appeals, Barnes v. Martin-Prince. This case involves a fatal 2014 car accident. The defendant in this case was driving her car when she “crossed over the centerline of the highway into oncoming traffic and collided with” another vehicle, according to court records. The driver of the other vehicle, a 62-year-old man, died from his injuries. Police later arrested the defendant for DUI and vehicular manslaughter. She would plead guilty to those charges and receive a seven-year prison sentence.

Separately, the family of the deceased man hired a personal injury lawyer and notified the defendant’s insurance company of their potential wrongful death claim. The insurer promptly replied that it would “unconditionally” offer the family $25,000, which was the limits of the defendant’s insurance policy. The attorney and the insurer then exchanged several emails regarding the terms of a limited release and a check for $25,000.

The family also wanted to speak directly to the defendant regarding her alcohol consumption on the night of the accident. Apparently, the family was considering suing the nightclub that had served the plaintiff under Georgia’s Dram Shop Act. The insurance company notified the family’s lawyer that it was not representing or defending the defendant outside the terms of negotiating the limited release.

When the defendant refused to speak with the family’s lawyer, they decided to file a personal injury lawsuit against her for purposes of conducting discovery. Once again, the insurer informed the family it would not provide the defendant with any legal assistance in this matter. The insurer then sent the attorney a check for $25,000, which the lawyer deposited in his firm’s escrow account.

Meanwhile, the defendant failed to answer the family’s lawsuit. The trial court noted the defendant was in default. More than two years passed, when the defendant filed a new motion. She claimed her insurance company reached a binding settlement two years earlier and the court should enforce its terms.

The trial court denied the defendant’s motion. The Court of Appeals reversed, however, and said there was an enforceable settlement agreement. The appeals court pointed to two things. First, there was a “meeting of the minds,” which was a necessary condition for any legal contract. Basically, the family asked for a limited release as a condition of accepting the insurer’s $25,000 settlement offer. The insurance company provided the release. The family argued that they then demanded speaking with the defendant as an additional condition. But the Court of Appeals said this request “was not contradictory to the execution of a limited liability release” and not part of any “counter-offer.”

Second, the family’s attorney actually deposited the insurance company’s settlement check. The fact that he deposited it in an escrow account, rather than the client’s personal accounts, did not matter. The act of depositing “amounted to an accord and satisfaction,” which “discharged” any legal claims the family had against the defendant.