Amanda Newton v. Steve Ragland

• Court: Court of Appeals of Georgia
• Decided: November 18, 2013
• Docket: A13A1541
• Status: Published

Opinion

SECOND DIVISION BARNES, P. J., MILLER and RAY, JJ.

NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. http://www.gaappeals.us/rules/

November 18, 2013

In the Court of Appeals of Georgia A13A1541. NEWTON v. RAGLAND.

RAY, Judge.

In this personal-injury action arising from a motor-vehicle accident, Amanda

Newton appeals from the trial court’s order denying her motion to enforce a

settlement agreement with the plaintiff, Steve Ragland, and from the judgment and

award of attorneys fees entered against her after a jury trial. For the reasons explained

below, we reverse the trial court’s orders.

We apply a de novo standard of review to a trial court’s order on a motion to enforce a settlement agreement. Because the issues raised are analogous to those in a motion for summary judgment, in order to succeed on a motion to enforce a settlement agreement, a party must show the [C]ourt that the documents, affidavits, depositions and other evidence in the record reveal that there is no evidence sufficient to create a jury issue on at least one essential element of the Appellant’s case. Thus, we view the evidence in a light most favorable to the nonmoving party.

(Citation and punctuation omitted.) Johnson v. Dekalb County, 314 Ga. App. 790,

791 (726 SE2d 102) (2012).

The record in this case shows that on March 22, 2009, Ragland and Newton

were involved in a motor vehicle accident, in which Newton ran a red light at an

intersection and struck Ragland’s vehicle. Ragland suffered severe injuries. At the

time of the collision, Newton’s vehicle was covered by two insurance policies: her

automobile liability insurance, a USAA General Indemnity Company policy, and a

Zurich Insurance Company policy held by the car dealership that owned the car she

was driving at the time of the accident. Both policies had a per person bodily

coverage limit of $25,000. Ragland also had $175,000 in underinsured/uninsured

motors (“UM”) coverage through the vehicles he owned.

On July 27, 2009, Ragland’s attorney sent a letter to claims adjusters at Zurich

and USAA. The letter, in relevant part, noted

It is my understanding that the total combined liability coverage for this accident is $50,000.00, with $25,000.00 from USAA and $25,000.00 from Zurich. On behalf of [Ragland], I have been authorized to demand these amounts in return for a limited liability release pursuant to OCGA

2 § 33-24-41.1. . . . This demand is contingent upon two separate checks in the amount of $25,000.00 each no later than noon (eastern daylight savings time) on August 7, 2009. . . . Please be aware there is UM coverage available at least $175,000.00 and in order to obtain that, your payment as set out above is essential. Mr. Ragland will be going off short term disability on Friday, July 31, 2009 and the long term disability will not be effective until September 1, 2009. Therefore there is a gap in payments and time is of the essence. Any variation to the above terms outlined above will be considered a rejection. This offer is only being made once.

On August 6, 2009, the USAA claims adjuster sent a letter and a $25,000 check

to Ragland’s attorney. That letter, in relevant part, stated “[w]e’ve settled the . . .

claim . . . . Please complete the attached release and return it. Your signature(s) must

be witnessed.” The claims adjuster attached a general, or full, release form instead of

a limited liability release form.

Before noon on August 7, 2009, Ragland’s attorney faxed a letter to the USAA

claims adjuster confirming that he had received USAA’s $25,000 check prior to the

deadline. His letter further stated the following:

We have not had any discussions regarding the package that I received today. Unless I hear otherwise, I assume that your tender of the

3 $25,000.00 is conditioned upon Mr. Ragland signing the release and thereby agreeing to hold harmless, defend, and indemnify the insurer for all claims and for any amounts the insured is required to pay as a result of claims asserted against the insurer that are outlined in paragraph four (4) of the release, including any and all attorney fees incurred. . . .

The letter did not mention that the release provided by USAA’s claims adjuster was

general and not limited. The letter also did not state that Ragland would not sign the

liability waiver. The record before us is silent as to whether USAA provided any

response to the letter or when USAA was even aware of the letter.

On August 10, 2009, Ragland filed his complaint in this case through a

different attorney. Two days later, Ragland’s original attorney informed the USAA

claims adjuster by letter that Ragland had terminated him as counsel, and he returned

USAA’s $25,000 check, which had been made jointly payable to Ragland and his law

firm, and asserted an attorney’s lien of $8,710.56.

Newton was served with the complaint in the instant action on August 18,

2009. On August 28, 2009, Ragland’s new attorney informed the USAA claims

adjuster that Ragland took the position that USAA had rejected his settlement offer

by providing a general release rather than a limited liability release. Newton filed an

answer and a motion to enforce the settlement agreement, which the trial court

4 denied. In its order, the trial court concluded that USAA “rejected [Ragland’s]

demand by enclosing a general release and stating that [Ragland’s] signature on the

general release ‘must’ be witnessed, rather than enclosing a limited liability release.”

1. In her first enumeration of error, Newton contends that the trial court erred

in denying her motion to enforce the settlement agreement because a contract to settle

was formed when USAA sent the policy limits to Ragland by his offer letter’s due

date. We agree.

“[T]he law . . . favors compromise, and when parties have entered into a

definite, certain, and unambiguous agreement to settle, it should be enforced.”

(Punctuation and footnote omitted.) Greenwald v. Kersh, 275 Ga. App. 724, 726 (621

SE2d 465) (2005). However, a settlement agreement is subject to the same

requirements of contract formation as other contracts. Id. at 725-726. Thus, when

inquiring whether the parties entered into a settlement agreement, this Court is

“limited to those terms upon which the parties themselves have mutually agreed.”

(Footnote and punctuation omitted.) Sherman v. Dickey, __ Ga. App. __ (1) (744

SE2d 408) (2013). If no such mutual agreement exists, then there is no enforceable

contract between the parties. Id. Thus,

5 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. The offer must be accepted unequivocally and without variance of any sort. And if a purported acceptance of the plaintiff’s settlement offer imposes any new conditions, it constitutes a counteroffer rather than an acceptance.

Id. With these principles in mind, we now turn to Newton’s argument on appeal.

Newton contends that Ragland’s offer in the present case was to enter into a

unilateral contract, which was formed upon USAA’s performance of sending a check

to Ragland’s counsel within the time frame demanded. Thus, Newton argues, payment

was the only action needed to accept Ragland’s offer to settle and that the parties had

reached a meeting of the minds sufficient to form a contract, regardless of what

release USAA sent with said payment. This is especially true, Newton contends,

because Ragland’s offer letter did not demand or request USAA to prepare the limited

liability release to be signed in exchange for payment. Ragland, on the other hand,

contends that USAA’s acceptance of his offer was not “unconditional and identical

with the terms of the offer, [because Ragland] was left to question what release

USAA would require him to sign and what rights he would give up by accepting the

money.” (Punctuation omitted.)

6 Although the general release provided by USAA included additional terms not

acceptable to Ragland, “it is well settled that the mere inclusion of a release form

unacceptable to the plaintiff does not alter the fact that a meeting of the minds had

occurred with regard to the terms of the settlement.” (Citations omitted.) Turner v.

Williamson, 321 Ga. App. 209, 213 (2) (738 SE2d 712) (2013). Further, “[w]hen

determining whether a purported acceptance imposes conditions rendering it a

counter-offer, our courts have drawn a distinction for ‘precatory words.’” (Citations

omitted.) Turner, supra at 212. Precatory words are those words that indicate

“entreaty, recommendation, or expectation rather than any mandatory direction.”

(Citation and punctuation omitted.) Herring v. Dunning, 213 Ga. App. 695, 699 (446

SE2d 199) (1994).

The present case is factually similar to Turner v. Williamson, supra. In Turner,

plaintiffs’ counsel sent to the insurance company an offer to settle for the policy

limits in exchange for a limited liability release pursuant to OCGA § 32-24-41.1. Id.

at 210-211. The insurance company accepted the offer; it sent a check for policy

limits, a proposed release that added additional language beyond that included in the

limited liability release statute, and a letter requesting that the injured party “please”

sign the included release form in front of witnesses and return it. Id. The plaintiffs’

7 counsel then informed the insurance company that his clients were rejecting the

“counteroffer.” Id. On appeal from the trial court’s denial of the insurance company’s

motion to enforce the settlement agreement, this Court held that because the insurance

company’s acceptance letter included “precatory words rather than mandatory

words[,]” and “contained no language conditioning acceptance upon execution of a

particular release form[,]” any variation in the terms of the liability release agreement

sent by the insurance company did not impose a new condition of settlement, and that

the trial court erred in denying the insurance company’s motion to enforce the

settlement agreement. Id. at 213-214 (2). In so holding, the Turner Court noted that

the presentation of a proper release in a form acceptable to plaintiff may have been a condition of defendant’s performance but it was not an act necessary to acceptance of plaintiff’s offer to settle for the policy limits. Moreover, since the agreement to terminate the controversy had already been created, the defendant’s subsequent proffer of a release form which plaintiff believed was not in compliance with the understanding of the parties would not be a rejection of the previously accepted offer.

(Citation omitted). Id. at 214 (2) (quoting Herring v. Dunning, supra at 699-700.

The terms of Ragland’s offer in the present case stated that he would execute

a limited liability release pursuant to OCGA § 33-24-41.1 in exchange for the policy

limits by a certain deadline. USAA’s tender of the policy limits by Ragland’s deadline

8 constituted acceptance of the offer. The language contained in USAA’s acceptance

letter requesting that Ragland “please complete the attached release and return it”

used precatory rather than mandatory words, and we are constrained under the

precedent of Turner to hold that USAA’s inclusion of a general liability release form

rather than a limited liability release form did not impose a new condition of

settlement. The fact that USAA used a mandatory directive in a later sentence in its

acceptance letter, that “[y]our signature(s) must be witnessed[,]” does not change our

analysis, as this directive only related to how Ragland and his counsel were to sign

the release; it did not mandate that a certain release be signed. Therefore, USAA

complied with the terms of Ragland’s offer by submitting a $25,000 check within the

offer’s deadline, and the trial court erred in denying USAA’s motion to enforce the

settlement agreement. Compare Frickey v. Jones, 280 Ga. 573, 575-576 (630 SE2d

374) (2006) (purported acceptance letter was conditioned settlement upon resolution

of medical liens not mentioned in offer and was determined to be a counteroffer);

Anderson v. Benton, 295 Ga. App. 851, 855 (1) (673 SE2d 338) (2009) (purported

acceptance expressly contingent upon execution of included release that did not

comply with release terms specified in plaintiff’s offer).

9 Although Ragland’s counsel faxed a letter to USAA immediately after

receiving USAA’s settlement check and acceptance letter stating that “I assume that

your tender of the $25,000.00 is conditioned upon Mr. Ragland signing the [attached]

release[,]” that fax was sent after USAA had accepted Ragland’s settlement offer by

tendering a check for the policy limits within the deadline and after a binding contract

had been formed. See Herring, supra (“An offer may be accepted . . . by either a

promise to do a thing contemplated therein, or by the actual doing of the thing. The

offer must be accepted in the manner specified by it; and if it calls for a promise, then

a promise must be made; or if it calls for an act, it can be accepted only by the doing

of the act”) (citation and punctuation omitted).

Based upon the above, we therefore conclude that the trial court erred by

denying USAA’s motion to enforce the settlement agreement.

2. USAA contends that the trial court erred in finding that Ragland was entitled

to attorney fees and expenses of litigation under OCGA § 9-11-68. Because of our

holding in Division 1, we agree and reverse the award of attorney fees and expenses

of litigation awarded to Ragland.

Judgment reversed. Barnes, P. J., and Miller, J., concur.