Baker v. Huff
323 Ga. App. 357
| Ga. Ct. App. | 2013Background
- Single-car 2002 accident killed driver Harlan Huff; passenger Joshua Huff severely injured. Liberty Mutual insured the car with $100,000 per-person limits.
- Joshua (through attorney Neff) made time-limited demands to settle for the $100,000 policy limits in June 2003 and October 2003; Liberty Mutual ultimately tendered limits in January 2004 but after the June offer deadline and after receiving additional medical records.
- Joshua sued Harlan’s Estate and recovered a $278,806 judgment; Liberty Mutual paid policy limits leaving an excess judgment against the Estate; Estate asserted a bad-faith/negligence claim against Liberty Mutual for failing to timely accept the offers.
- Patricia Huff (former executrix) and attorney Bonnie Baker/Meadows & Macie negotiated settlement attempts for the Estate; later disputes led to probate removal and consolidated civil claims including UFTA, malpractice, breach of fiduciary duty, and bad-faith failure-to-settle.
- The trial court denied summary judgment for defendants; interlocutory appeals followed. The Court of Appeals analyzed whether Liberty Mutual unreasonably refused the time-limited offers and whether related claims against other defendants survived if the insurer’s claim failed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Liberty Mutual acted in bad faith or negligently by not accepting June 19, 2003 time-limited $100,000 demand | Neff/Joshua: demand was a Holt offer; insurer had clear liability and should have tendered within 10 days | Liberty: had insufficient information (revoked auth, no current records, prior head injury, unresolved impairment) and could not reasonably value claim within deadline | Denied as to June 19 demand — insurer entitled to summary judgment because no reasonable trier could find refusal was unreasonable |
| Whether Liberty Mutual is liable for failing to accept October 2003 offers to settle for policy limits | Estate: October offers reasserted policy-limit settlement and insurer delayed, causing excess judgment | Liberty: October 28 letter modified the October 22 offer to seek $100,000 for pain-and-suffering only (partial release), inviting negotiation beyond policy limits | Liberty Mutual entitled to summary judgment on October offers — October 28 modified the earlier offer so insurer had no duty to accept |
| Whether bad-faith/failure-to-settle claim is a breach of contract | Estate: alleges contractual breach of insurer obligations | Liberty: failure-to-settle is tort, not contract | Court: summary judgment for Liberty on contract claim — it is a tort, not breach of contract |
| Whether UFTA, malpractice, fiduciary-duty claims against Baker, Meadows, and Patricia Huff survive if insurer’s bad-faith claim fails | Estate: defendants conspired to diminish Estate asset (the bad-faith claim) and violated UFTA and fiduciary duties | Defendants: if no underlying bad-faith claim, no asset was diminished and related claims fail | Court: summary judgment for those defendants — because Liberty Mutual’s liability on bad-faith claim fails, there was no asset to have been fraudulently transferred or diminished |
Key Cases Cited
- Southern Gen. Ins. Co. v. Holt, 262 Ga. 267 (Holt explains jury inquiry for insurer refusal to accept time-limited policy-limit offers)
- Cotton States Mut. Ins. Co. v. Brightman, 276 Ga. 683 (insurer duty to respond when knowledge of liability and damages; no duty to negotiate beyond policy limits)
- Fortner v. Grange Mut. Ins. Co., 286 Ga. 189 (reasonableness judged by ordinarily prudent insurer standard)
- U.S. Fidelity & Guar. Co. v. Evans, 116 Ga. App. 93 (adopts "unreasonable risk" test for insurer liability in failing to settle)
- Lau's Corp. v. Haskins, 261 Ga. 491 (summary judgment standards affirmed)
- Government Employees Ins. Co. v. Gingold, 249 Ga. 156 (insurer entitled to summary judgment when no reasonable opportunity to settle)
- Raines v. Maughan, 312 Ga. App. 303 (expert testimony not required where issues are within common knowledge)