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GA Supreme Court Rules for Ins. Company in Bad Faith Settlement Negotiations Case

March 21, 2019

GEORGIA – The Georgia Supreme Court has issued a ruling in favor of an insurance company in a bad faith settlement negotiations case, according to an online news report from The Court reinstated a summary judgment order from the trial court that found the insurance company was not negligent in failing to settle within policy limits on a car accident claim.

In August 2008, a driver caused a vehicle crash that injured several people. The at-fault driver died in the collision, and the injured parties made claims against his automobile insurance policy with First Acceptance. The policy limits were $25,000 for each person and $50,000 for each accident. 

Counsel for First Acceptance contacted all of the injured parties and requested a settlement conference. Two of the injured persons, a mother and daughter, responded through a letter from their counsel that they were interested in attending a conference or settling for the policy limits. When First Acceptance attempted to schedule the conference, the mother and daughter then declined to attend and also rejected an offer from the company to settle for the policy limits. 

The mother and daughter filed a lawsuit in connection with the accident, and a jury awarded them $5.3 million in damages. The estate of the at-fault driver then sued First Acceptance for $5.3 million, alleging that the company was negligent and acted in bad faith in failing to settle for the policy limits when the mother and daughter were willing. 

The trial court granted summary judgement in favor of First Acceptance, and the appellate court reversed that ruling. The Georgia Supreme Court agreed to hear the case, and on March 11, it issued a ruling reinstating the summary judgment order. The Court found that an insurance company’s duty to settle a claim is triggered by a valid offer from the injured party. 

The Court found that no such duty existed in this case, as the letter from the mother and daughter’s lawyer expressed a willingness to participate in settlement and did not constitute a valid offer with a deadline to accept. 

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Category: Auto Accidents

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