Lead Opinion
This appeal in a personal injury case arising from an automobile accident is before this Court on certified questions from the United States Court of Appeals for the Eleventh Circuit. At issue is the proper interpretation of OCGA § 9-11-67.1, which governs the formation of settlement agreements pursuant to a pre-suit “offer to settle a tort claim for personal injury, bodily injury, or death arising from the use of a motor vehicle and prepared by or with the assistance of an attorney on behalf of a claimant or claimants” (a “Pre-Suit Offer”). OCGA § 9-11-67.1(a). We conclude that OCGA § 9-11-67.1 does not prohibit a claimant from conditioning acceptance of a Pre-Suit Offer upon the performance of some act, including a timely payment. We leave it to the Eleventh Circuit to apply this principle to the facts of this case.
1. Factual and, procedural background
The relevant facts are largely undisputed. On March 20, 2014, Thomas Dempsey was driving his car in Georgia when he collided with a pickup truck operated by Boris Woodard in which Woodard’s adult daughter, Anna Woodard, was a passenger. Both Woodards were injured, and Anna died of her injuries. Dempsey’s vehicle was insured under a personal automobile liability policy issued by Grange Mutual Casualty Company (“Grange”) with liability limits of $50,000 per person, $100,000 per accident. Grange assigned claims representative Heather Conn to handle Boris Woodard’s personal injury claim, as well as Boris and Susan Woodard’s wrongful death claim for Anna. The Woodards selected T. Shane Peagler of the Law Offices of Michael Lawson Neff, PC., to represent them in the matter.
On June 19, 2014, Peagler sent Conn a letter making a settlement offer, under the heading, “Offer to Settle Tort Claims Made Pursuant to OCGA § 9-11-67.1 and OCGA § 51-12-14.” In his letter, Peagler said that the Woodards offered a limited release of their claims against the Dempseys and Grange in exchange for the $ 100,000 policy limit. The letter contained a list of demands under the boldface heading, “Note: The following items must be noted and fully and strictly complied with in order to accept this offer[.]” Among those demands were the following:
• “Pursuant to O.C.G.A. § 9-11-67.1, you have 30 days from your receipt of this offer to accept it.”
• “Your acceptance of this offer must be in writing to me at the above address shown in my letterhead. If we do not actually receive a timely acceptance, this offer will be deemed rejected, and wewill file a lawsuit against your insureds to recover the total amount of losses caused by your insureds, instead of the limited amount afforded by your coverage and other coverage that may be available.”
• The Dempseys and a Grange officer were required to provide affidavits swearing that the insurance coverage from Grange was the only coverage available and that no excess or umbrella policies were available. “All three affidavits must be received in my office within ten (10) days after your written acceptance of this offer to settle. Timely compliance with this paragraph is an essential element of acceptance.”
• “Ifpayment is not tendered in cash pursuant to OCGA § 9-11-67.1 (f)(1), payment in the amount of $50,000 must be made payable to ‘Boris and Susan Woodard and Michael L. Neff, their attorney for the wrongful death of their daughter, Anna Woodard,’ within ten (10) days after your written acceptance of this offer to settle. Timely payment is an essential element of acceptance.”
• “Ifpayment is not tendered in cash pursuant to OCGA § 9-11-67.1 (f)(1), payment in the amount of $50,000 must be made payable to ‘Boris Woodard and Michael L. Neff, his attorney’ within ten (10) days after your written acceptance of this offer to settle. Timely payment is an essential element of acceptance.”
Peagler agreed that Grange had until July 23, 2014, to accept the offer. In a letter dated July 22, 2014, Conn told Peagler, “We accept your demand as outlined in your correspondence of June 23, 2014.” The letter stated that the requested affidavits and checks would follow under separate cover within ten days. Conn e-mailed Peagler the affidavits on July 29, stating that the checks were being issued that day.
Conn and Neff spoke on August 12, 2014, and Neff informed Conn that the checks had not arrived. Neff told Conn this meant the parties had not reached a binding settlement agreement. Conn offered to reissue new checks for overnight delivery, but Neff was unwilling to accept them. Conn nonetheless wrote to Neff’s office after their conversation, including settlement checks with the correspondence. She apologized, explaining that the original checks were issued on July 29 but there was an error in addressing them to Neff’s office. On August 14, Neff sent Conn a letter returning the checks and stating that the Woodards rejected Grange’s untimely response to the settlement offer and would be filing a lawsuit.
Grange filed a lawsuit against the Woodards in the United States District Court for the Northern District of Georgia. The one-count complaint alleged breach of the settlement contract and sought relief “up to and including an award of specific performance.” The parties filed cross-motions for summary judgment. The Woodards argued that the parties did not reach a settlement agreement because the demand letter required Grange to remit payment timely as a condition of acceptance, which Grange failed to satisfy. Grange argued that Georgia law rendered void the Woodards’ attempt to require timely payment as a condition of acceptance. Both parties cited OCGA § 9-11-67.1, which provides in relevant part as follows:
(a) Prior to the filing of a civil action, any offer to settle a tort claim for personal injury, bodily injury, or death arising from the use of a motor vehicle and prepared by or with the assistance of an attorney on behalf of a claimant or claimants shall be in writing and contain the following material terms:
(1) The time period within which such offer must be accepted, which shall be not less than 30 days from receipt of the offer;
(2) Amount of monetary payment;
(3) The party or parties the claimant or claimants will release if such offer is accepted;
(4) The type of release, if any, the claimant or claimants will provide to each releasee; and
(5) The claims to be released.
(b) The recipients of an offer to settle made under this Code section may accept the same by providing written acceptance of the material terms outlined in subsection (a) of this Code section in their entirety.
(c) Nothing in this Code section is intended to prohibit parties from reaching a settlement agreement in a manner and under terms otherwise agreeable to the parties.
(d) Upon receipt of an offer to settle set forth in subsection (a) of this Code section, the recipients shall have the right to seek clarification regarding terms, liens, subrogation claims, standing to release claims, medical bills, medical records, and other relevant facts. An attempt to seek reasonable clarification shall not be deemed a counteroffer.
(g) Nothing in this Code section shall prohibit a party making an offer to settle from requiring payment within a specified period; provided, however, that such period shall be not less than ten days after the written acceptance of the offer to settle.
The district court agreed with the Woodards that the statute does not prohibit a party from requiring payment as a condition of acceptance, and found that Grange did not satisfy the Woodards’ terms of acceptance through written acceptance alone. The district court also rejected Grange’s argument that even if payment was an essential element of acceptance, the insurer had satisfied that provision when it issued settlement checks payable to the Woodards in a timely manner. The district court denied Grange’s motion for summary judgment and granted summary judgment to the Woodards.
Grange appealed to the Eleventh Circuit, which concluded that OCGA § 9-11-67.1 was “arguably ambiguous with respect to its requirements.” Grange Mut. Cas. Co. v. Woodard,
(1) Under Georgia law and the facts of this case, did the parties enter a binding settlement agreement when the insurer Grange accepted the Woodards’ offer in writing?
(2) Under Georgia law, does OCGA § 9-11-67.1 permit unilateral contracts whereby offerors may demand acceptance in the form of performance before there is a binding, enforceable settlement contract?
(3) Under Georgia law and the facts of this case, did OCGA § 9-11-67.1 permit the Woodards to demand timely payment as a condition of accepting their offer?
(4) Under Georgia law and the facts of this case, if there was a binding settlement agreement, did the insurer Grange breach that agreement as to payment, and what is the remedy under Georgia law? Id. at 1300-1301.
2. Analysis
a. Background principles of law
The Eleventh Circuit’s certified questions call on us to interpret key provisions of OCGA § 9-11-67.1.
When we consider the meaning of a statute, we must presume that the General Assembly meant what it said and said what it meant. To that end, we must afford the statutory text its plain and ordinary meaning, we must view the statutory text in the context in which it appears, and we must read the statutory text in its most naturaland reasonable way, as an ordinary speaker of the English language would. . . . [I]f the statutory text is clear and unambiguous, we attribute to the statute its plain meaning, and our search for statutory meaning is at an end.
Deal v. Coleman,
In enacting OCGA § 9-11-67. l,theGeneral Assembly actedagainst the backdrop of a large body of law on contract formation generally and settlement formation specifically As part of that existing law, “settlement agreements must meet the same requirements of formation and enforceability as other contracts.” Torres v. Elkin,
an answer to an offer will not amount to an acceptance, so as to result in a contract, unless it is unconditional and identical with the terms of the offer. To constitute a contract, the offer must be accepted unequivocally and without variance of any sort. Apurported acceptance of a plaintiff’s settlement offer which imposes conditions will be construed as a counteroffer to the offer to settle for the policy limits.
Frickey v. Jones,
Similarly, it is also a fundamental principle of contract law that “an offeror is the master of his or her offer, and free to set the terms thereof.” Atkinson v. Cook,
“The common-law rules are still of force and effect in this State, except where they have been changed by express statutory enactment or by necessary implication.” Humphreys v. State,
First, subsection (a) provides that a Pre-Suit Offer “shall . . . contain the following [five] material terms.” Although “contain” may sometimes be a term of exclusivity, it also has non-exclusive meanings. See, e.g., Webster’s II New College Dictionary, 249 (3d ed. 2005) (defining “contain” variously as “[t]o have within” and “[t]o have as component parts”). Although these different definitions create some ambiguity in the abstract, in considering how a word is used in a statute, “we must view the statutory text in the context in which it appears[.]” Deal,
Subsection (g) bolsters this reading. It provides, “Nothing in this Code section shall prohibit a party making an offer to settle from requiring payment within a specified period; provided, however, that such period shall be not less than ten days after the written acceptance of the offer to settle.” This shows that prompt payment may be a term of settlement in a Pre-Suit Offer, as
Additionally, subsection (c) provides, “Nothing in this Code section is intended to prohibit parties from reaching a settlement agreement in a manner and under terms otherwise agreeable to the parties.” Given the mandatory language of subsection (a) specifying terms that “shall” be included in a Pre-Suit Offer, the most natural reading of this provision is that the statute does not preclude a Pre-Suit Offer from requiring acceptance of terms in addition to those set forth in subsection (a). And the use of the word “manner” in subsection (c) indicates that not only are additional “terms” permissible, but a claimant may ask the recipient of a Pre-Suit Offer to do something to accept the offer beyond stating the recipient’s acceptance in writing.
Emphasizing the language of subsection (b), Grange argues that the statute plainly provides that if a Pre-Suit Offer contains the five terms listed in subsection (a), and those five terms are accepted unequivocally, without alteration, and in writing, then a settlement is created (at least where the demand is made pursuant to the statute explicitly). Subsection (b) provides that a recipient of “an offer to settle made under this Code section may accept the same by providing written acceptance of the material terms outlined in subsection (a) of this Code section in their entirety.” We agree that this language means that a Pre-Suit Offer must be accepted in writing, at least as to the five terms listed in subsection (a). We do not agree that this language means that a Pre-Suit Offer cannot also require some additional act to effectuate acceptance, however. As set forth above, the common law is well established that (1) the offeror is the master of his or her offer, and (2) agreement requires a meeting of the minds on all material terms. Reading the statute consistent with those principles, we do not equate the phrase “written acceptance” with necessarily effectuating a binding settlement, as the dissent does. Rather, written acceptance of Pre-Suit Offers is necessary to effectuate a binding settlement, but whether it is sufficient depends on the offer; if the recipient of a Pre-Suit Offer is asked to do something more to accept, the parties do not have a meeting of the minds if the recipient does not also perform that action. Subsection (b) does not explicitly forbid a Pre-Suit Offer from requiring an additional action to accept the offer. It thus does not expressly contravene those common law principles.
The statute, including subsection (b), does not contravene those principles by necessary implication, either. Grange argues that to allow one making a Pre-Suit Offer to demand terms other than those set forth in subsection (a) or to require means of acceptance in addition to written acceptance would render the statute meaningless, particularly robbing subsections (a) and (b) of any force or effect. It is true that “a legislative body should always be presumed to mean something by the passage of an act, and an act should not be so construed as to render it absolutely meaningless[.]” Scott v. Mayor & Council of Mt. Airy,
In understanding the work that OCGA § 9-11-67.1 performs, it is helpful to recall the legal environment in which it was enacted. Our 1992 decision on an insurer’s duty to its insured when faced with a settlement demand, Southern Gen. Ins. Co. v. Holt,
Grange suggested at oral argument that, as long as the claimant “invokes” OCGA § 9-11-67.1 in making his or her offer, the claimant is not entitled to make a “non-conforming offer,” i.e., one that has terms additional to
3. Response to certified questions
For the foregoing reasons, we answer Question (2) in the affirmative. Yes, OCGA § 9-11-67.1 permits “unilateral” contracts whereby Pre-Suit Offers may demand acceptance in the form of performance (in addition to the statutorily mandated written acceptance) before there is a binding enforceable settlement contract. And, with respect to the general issue of law behind Question (3) (although we decline to consider it in the context of the facts of this case), we conclude that OCGA § 9-11-67.1 does not preclude a Pre-Suit Offer from demanding timely payment as a condition of acceptance. However, we respectfully decline to answer the Eleventh Circuit’s questions to the extent that they call us to decide the ultimate issues in the case, i.e., Question (1), which asks whether the parties entered into a binding settlement agreement, and Question (4), which asks about the consequences if the parties did reach an agreement. See PNC Bank, Nat. Assn. v. Smith,
Certified questions answered in part.
Notes
In addition to the parties’ briefs and presentations at oral argument, the Court was assisted in its task by helpful amicus briefs from the Georgia Defense Lawyers Association, which filed a brief with the Eleventh Circuit in this case, and the Georgia Trial Lawyers Association.
Although Grange cites Craddock v. Greenhut Constr. Co., 423 F2d 111, 114 (5th Cir. 1970) for the proposition that unilateral contracts are disfavored, that is not to say that they are disallowed. In Craddock, the Fifth Circuit found that the trial court erred in interpreting a contractor’s request for famishment of a performance bond as defining the exclusive means for accepting an offer, as opposed to establishing a condition subsequent modifying the contractor’s obligation to award a subcontract. Id. at 114. The appellate court relied in part on the premise that unclear language must be resolved against the draftsman or the party for whose benefit the term is inserted, and the court noted that the contractor “had the power and the ability to clearly require that its offer must be accepted by the act of furnishing the bond.” Id. In Jackson Elec. Membership Corp. v. Ga. Power Co.,
Yet another example of “contain” being used non-exclusively.
Although this case does not call on us to consider whether Grange acted in bad faith, Georgia case law on insurers’ duties to their insured, specifically our decision in Holt, looms in the background. Therein we held that a trial court properly put to a jury the question of an insurer’s bad faith where the insurer refused to settle a plaintiff’s claim for policy limits within the time frame set by plaintiff’s counsel where liability was clear and the plaintiff’s medical bills and lost wages exceeded the policy limits. Holt,
See Baker v. Huff,
See McReynolds v. Krebs,
See Holt,
The dissent suggests that our reading of the statute is wrong because it undermines the General Assembly’s goal in passing OCGA § 9-11-67.1 —that is, to reduce bad faith claims. As explained above, the statute indeed limits claimants’ ability to present settlement offers with short deadlines. However, it says nothing about bad faith claims. And we may not add meaning to a statute to further what we perceive to have been the General Assembly’s policy goals in enacting the legislation. That a statute does not fully solve a problem that we perceive it to address does not mean we misread the statute; rather, it may mean only that the General Assembly struck a delicate balance in addressing controversial issues. We are bound to construe the statute as it is written. “A statute draws its meaning . . . from its text.” Chan v. Ellis,
Grange also suggested that an insurer’s response to such an offer could not be the basis for a bad faith claim. We express no opinion here as to the implications for bad faith claims our construction of the statute may have.
Dissenting Opinion
dissenting.
Because the plain language of OCGA § 9-11-67.1 (g) prohibits a claimant from conditioning acceptance of a Pre-Suit Offer upon the making of a timely payment, I must respectfully dissent from the majority’s erroneous decision concluding otherwise.
Pursuant to OCGA § 9-11-67.1 (g):
Nothing in this Code section shall prohibit a party making an offer to settle from requiring payment within a specified period; provided, however, that such period shall be not less than ten days after the written acceptance of the offer to settle.
(Emphasis supplied.)
In interpreting this Code section, “we apply the fundamental rules of statutory construction that require us to construe [the] statute according to its terms, to give words their plain and ordinary meaning, and to avoid a construction that makes some language mere surplusage.” (Citations omitted.) Slakman v. Continental Cas. Co.,
Bearing these principles in mind, a straightforward reading of OCGA § 9-11-67.1 (g) reveals that the General Assembly intended to separate the payment component of an already formed settlement agreement from the acceptance of an offer that creates an enforceable settlement agreement in the first instance. Indeed, a party making an offer to settle may only “requir[e] payment within a specified period [of not less than ten days] after the written acceptance of the offer to settle” has already taken place. The statute does not contemplate that the payment requirement can be a “condition precedent to” or a “contemporaneous” requirement for the acceptance of a settlement offer, but specifically segregates payment, which can only be required and enforced “after” a conforming settlement offer is accepted, from the conforming offer itself. In this regard, it cannot be said that the common law cited by the majority, and that runs contrary to the plain meaning of the statute indicated here with respect to Pre-Suit Offers, has not been “changed by [the] express statutory enactment [of OCGA § 9-11-67.1 (g)] or by necessary implication.” (Citation and punctuation omitted.) Humphreys v. State,
In short, OCGA § 9-11-67.1 (g) creates a two-step process with respect to settlement agreements in the specific circumstances covered by the statute: step one is to create an enforceable settlement agreement through a conforming Pre-Suit Offer and the acceptance of that offer; and step two allows a claimant to require payment on the now binding settlement agreement within a time frame of no less than ten days.
Although other parts of OCGA § 9-11-67.1 allow for a claimant to insert additional terms into a Pre-Suit Offer beyond the minimum requirements of OCGA § 9-11-67.1 (a) (see OCGA § 9-11-67.1 (c)), those other parts of the statute must be read in harmony with OCGA § 9-11-67.1 (g). In this regard, if a party inserts additional terms into a Pre-Suit Offer that run contrary to the acceptable parameters created by OCGA § 9-11-67.1 (g), it cannot be said that the Pre-Suit Offer has been made in conformity with the requirements of OCGA § 9-11-67.1 as a whole. OCGA § 9-11-67.1 (c) provides:
Nothing in this Code section is intended to prohibit parties from reaching a settlement agreement in a manner and under terms otherwise agreeable to the parties.
In order for subsection (g) of OCGA § 9-11-67.1 to have any meaning at all, subsection (c) can only mean that parties may reach a settlement agreement “in a manner and under terms otherwise agreeable to the parties” as long as those terms do not run afoul of the requirement of OCGA § 9-11-67.1 (g) that an enforceable settlement agreement must first be reached before a claimant can enforce a demand for payment within a period of not less than ten days. To interpret OCGA § 9-11-67.1 (c) as allowing for a claimant to condition “acceptance” of a Pre-Suit Offer on the payment of the settlement itself, as the majority has, is to render OCGA § 9-11-67.1 (g) meaningless and undermine the plain meaning of the statutory scheme as crafted by the legislature.
In this connection, the majority’s reliance on the parties’ freedom to contract in any manner that they please and an offeror’s status as the master of his or her offer is misleading. Insofar as tort claims and offers to settle “arising from the use of a motor vehicle and prepared by or with the assistance of an attorney on behalf of a claimant or claimants” are concerned (OCGA § 9-11-67.1 (a)), an offeror is only the master of his or her offer to the extent permitted by OCGA § 9-11-67.1. In this specificcontextofPre-SuitOffers, OCGA § 9-11-67.1 has expressly set forth the parameters within which pre-suit settlement offers must exist now and in the future, and a party may not ignore those parameters in creating a Pre-Suit Offer while purporting to comply with the statute at the same time.
Indeed, as the Eleventh Circuit noted in this case:
It has been posited that the General Assembly’s goal in passing § 9-11-67.1 was to address the negative effects of [case law] . . . [that had been] enabling plaintiffs to present settlement offers with impossible deadlines and expose the insurance company to potential “bad faith” claims when it is unable or unwilling to abide. In enacting § 9-11-67.1, the General Assemblyreportedly sought to reduce bad-faith claims by giving insurance companies adequate time to investigate claims and offers before having to decide whether to settle. The Act was arguably meant to be a compromise between the plaintiff and defense bars and to reduce procedural quibbling over the technical sufficiency of a settlement offer.
(Citations and punctuation omitted.) Grange Mut. Cas. Co. v. Woodard,
Here, the plaintiffs’ Pre-Suit Offer did not conform with the requirements of OCGA § 9-11-67.1 due to the addition of terms that conditioned acceptance of the offer on payment, which violated the plain terms of OCGA § 9-11-67.1 (g). However, by allowing plaintiffs to make payment on a non-conforming Pre-Suit Offer a condition precedent to the “acceptance” of that offer based on an erroneous interpretation of the statute, the majority has re-opened the door for “plaintiffs to present settlement offers with impossible deadlines [that] expose the insurance company to potential ‘bad faith’ claims” (Grange,
I am authorized to state that Justice Blackwell joins in this dissent.