Hughes v. First Acceptance Insurance Company of Georgia, Inc.
343 Ga. App. 693
| Ga. Ct. App. | 2017Background
- Aug. 29, 2008: multi-vehicle collision caused by Ronald Jackson (decedent); Jina Hong (minor) suffered traumatic brain injury. Jackson insured by First Acceptance (BI limits $25,000/$50,000).
- June 2, 2009: counsel for An and Hong faxed two letters to First Acceptance’s counsel indicating willingness to settle Hong’s claim within insured’s policy limits, requested insurance information, and conditioned settlement on receipt of that information within 30 days.
- First Acceptance’s counsel reviewed the faxes but did not timely respond; counsel later said the June 2 letters were inadvertently misplaced. A settlement conference was scheduled for Sept. 1, 2009, which An/Hong did not attend.
- Jan.–Oct. 2010: First Acceptance made offers up to the $50,000 policy limit; An/Hong rejected. Trial in July 2012 resulted in a $5,334,220 judgment for Hong. First Acceptance tendered $25,000.
- June 2014: Administrator Hughes sued First Acceptance for negligent or bad-faith failure to settle (seeking excess judgment recovery, punitive damages, and attorney fees). Trial court granted summary judgment to First Acceptance on all claims; Hughes appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether First Acceptance negligently/bad-faith refused to settle within policy limits | June 2 letters constituted a time-limited offer to settle Hong’s claim within policy limits; insurer’s lack of timely response makes it liable as a matter of law | No clear, enforceable time-limited settlement to a single claimant; insurer had multiple claimants and lacked basis to know Hong’s claim alone could exhaust limits; insurer acted reasonably | Reversed as to failure-to-settle claim: genuine issues of material fact exist about existence/terms of offer and insurer’s reasonableness; jury question remains |
| Whether punitive damages are warranted | Punitive damages may be available if insurer acted with willful/wanton misconduct or conscious indifference | No evidence of willful, wanton, or conscious indifference to support punitive damages | Affirmed as to punitive damages: plaintiff failed to point to record evidence of willful/wanton conduct; summary judgment for insurer upheld |
| Whether attorney fees (bad faith) are recoverable | Attorney fees under OCGA §13‑6‑11 available if insurer acted in bad faith | No evidence of bad faith | Affirmed as to attorney fees: plaintiff abandoned/failed to identify evidence or legal argument to oppose summary judgment |
| Whether plaintiff (Hughes) was entitled to summary judgment | Insurer’s nonresponse to June 2 letters entitles Hughes to judgment as a matter of law | Disputed facts preclude summary judgment; issue for jury | Denied: trial court correctly denied Hughes’s motion because the evidence presents jury questions rather than entitlement to judgment as a matter of law |
Key Cases Cited
- Cotton States Mut. Ins. Co. v. Brightman, 276 Ga. 683 (insurer liable for excess judgment if ordinarily prudent insurer would have considered trying the case an unreasonable risk)
- Southern General Ins. Co. v. Holt, 262 Ga. 267 (insurer must give insured equal consideration; time-limited offers do not automatically create bad faith liability)
- Baker v. Huff, 323 Ga. App. 357 (standard for negligent/bad-faith failure to settle: ordinarily prudent insurer, jury issues)
- Miller v. Ga. Interlocal Risk Mgmt. Agency, 232 Ga. App. 231 (insurer may in good faith settle part of multiple claims without notifying others)
- Fortner v. Grange Mut. Ins. Co., 286 Ga. 189 (reasonableness judged by ordinarily prudent insurer standard)