Expiration Dates on Settlement Checks and Precise Delivery Dates: New Impediments to Time-Limited Demand Responses in Georgia

June 30, 2023 by on News

Expiration Date on Settlement Check and Non-Compliance with Exact Delivery Date for Payment Deemed Rejection and Counteroffer of Time-Limited Demand in Georgia

In a June 28, 2023 opinion, a three-judge panel of the Georgia Court of Appeals held that the act of including an expiration date on a settlement check will be construed as a rejection and counteroffer if a claimant’s demand includes a prohibition on “expirations.”  Pierce v. Banks, et al., Case No. A23A0394, 2023 Ga. App. LEXIS 347* (Ga. App. 2023).  In this same ruling, the court also held that an offeror could require a specific delivery date for the settlement payment as a condition of acceptance so long as the demand still allows the recipient the required minimum of 10 days from acceptance to make payment as required by O.C.G.A. § 9-11-67.1(g).

In this recent opinion, a claimant’s attorney, representing a party injured in a motorcycle accident, presented an insurer with a pre-answer Holt demand pursuant to O.C.G.A. § 9-11-67.1 wherein the claimant offered to settle the bodily injury claims in exchange for a payment of the tortfeasor’s bodily injury liability limits of $25,000.  As an act necessary to accept the demand, the claimant’s counsel indicated that the settlement payment must be received  15 days after the written acceptance of the offer.  Furthermore, to accept the time-limited demand, claimant’s counsel prohibited any addition of terms, conditions, descriptions, expirations, or restrictions that were not expressly permitted in the time-limited demand.

After attempting to accept the time-limited demand (offer) by sending a settlement payment check for $25,000, the claimant’s counsel argued no binding settlement agreement had in fact been reached because the acts necessary to accept the time-limited demand had not been strictly followed—namely the settlement check arrived earlier than 15 days after written acceptance instead of exactly 15 days after acceptance, and the settlement check contained a 180-day expiration date printed on the face of the check that constituted a prohibited expiration.  The attorney for the insurer attempting to accept the time-limited demand  subsequently moved to enforce the purported tentative settlement agreement, and the trial court granted that motion, denying claimant counsel’s motion for summary judgment on the contract formation issue.  The claimant’s counsel appealed this decision to the Georgia Court of Appeals.

In analyzing the contract formation issue, a three-judge panel of the Georgia Court of Appeals concluded that the type of contract offered by claimant’s counsel was unilateral rather than bilateral.  As such, the offeror can call for acceptance by an act rather than communication, and “if an offer calls for an act, it can be accepted only by the doing of the act.”  Barnes v. Martin-Price, 353 Ga. App. 621, 624(1), 838 SE2d 916 (2020).  Furthermore, the acceptance by act must be “identical” and “without any variance of any sort.”  Id.See also Wright v. Nelson, 358 Ga.  App. 871, 874, 856 SE2d 421 (2021); Duenas v. Cook, 347 Ga. App. 436, 441, 818 SE2d 629 (2018).  Relying upon the holding of de Paz v. de Pineda, 361 Ga. App. at 294, 864 SE2d 134 (2021), where the Georgia Court of Appeals previously held, “An offeree’s failure to comply with the precise terms of an offer is generally fatal to the formation of a valid contract,” the Georgia Court of Appeals rejected the settling carrier’s arguments that the terms causing disagreement were non-material terms and concluded that no valid contract was formed.

The appellate court panel held that, as the master of his or her offer, the claimant’s counsel was within her rights to require the settlement payment to be received on the precise 15th day after written acceptance of the offer was received—not earlier or later—and that such a term did not violate O.C.G.A. § 9-11-67.1(g)’s requirement that a settling party be given at least 10 days from the date of acceptance to make payment.  As such, the appellate court held that the fact that the settlement check was received earlier than the 15th day after acceptance was sufficient to conclude that no valid contract was formed due to the settling carrier’s failure to deliver the check on precisely on the 15th day after acceptance.

Finally, the claimant’s counsel argued on appeal that the pre-printed “void after 180 days” phrase on a check constituted an expiration that was prohibited in the terms of the original time-limited demand (offer).  The attorneys for the insurer attempting to enforce the purported tentative settlement agreement argued that the restricting language on the check did not constitute a restriction or expiration because the restriction was added by the bank—not the accepting party and that bank checks have an expiration date by law under O.C.G.A. § 11-4-404, and that a bank check with a notification that it is void after 180 days is the same as one without such notification printed on it.

In analyzing the issues surrounding the 180-day expiration date on the settlement check, the appellate court indicated that the plain language of O.C.G.A. § 11-4-404 does not dictate that a check is automatically void after 180 days; rather, the code section merely provides that the bank is not obligated to honor a check that is presented 180 days after its date—but that it can still honor it in good faith if it chooses to do so.  The appellate court also made note of the fact that the settling party could have made the settlement payment using some other method that did not have the 180-day expiration date on the check.  Ultimately, the appellate court held that there was no formation of a binding contract (settlement agreement) because the 180-day expiration phrase printed on the check did not strictly comply with the conditions of acceptance listed in the initial time-limited Holt demand by adding an expiration that was prohibited in the terms of the original demand.

This new ruling underscores the need for insurers to involve counsel early and to make every effort to comply with every single term of a time-limited Holt demand—even those that seem minute, mundane, or insignificant at first glance—if it desires to accept the time-limited demand (offer).  With this new ruling, insurers are likely going to be forced to utilize other payment methods like electronic wire transfers to make time-sensitive settlement payments, or they will otherwise be forced to employ private couriers or shipping services with guaranteed delivery dates to ensure that settlement payment checks are delivered by the precise date required by the conditions of acceptance of a time-limited Holt demand if the carrier desires to accept the demand (offer).  Additionally, insurers who receive a time-limited Holt demand will very likely have to ask their banks to remove the expiration phrase of “void after 180 days” that are pre-printed on many institutional checks.  Acceptance of a unilateral contract offer like a time-limited Holt demand in Georgia requires incredible attention to detail, and most insurers will need to re-examine and modify long-held institutional practices in light of this new ruling.

Boyd & Jenerette, P.A.’s Georgia attorneys stand ready to assist insurers with navigating this new landscape for responses to time-limited Holt demands.


On July 18, 2023, a petition for writ of certiorari was filed with the Georgia Supreme Court that we are currently monitoring.

If you have any questions about this update or would like to refer a case in Georgia, please contact our attorneys.

Payton D. Bramlett
Direct: 912.216.4363
Email: pbramlett@boydjen.com

About Payton D. Bramlett

Payton D. Bramlett is an experienced, outcome-oriented attorney in the Savannah office of Boyd & Jenerette, P.A., where he focuses his practice in the areas of insurance defense, general liability, and personal injury litigation including automobile, trucking, and premises liability.  Mr. Bramlett also handles property damage cases including construction defect cases. Throughout his career, Mr. Bramlett has obtained favorable results for clients in both bench and jury trials in some of the most plaintiff-friendly jurisdictions in Georgia.

Mr. Bramlett handles all phases of litigation in state and federal trial and appellate courts, and when possible, resolves cases pre-trial in a cost-effective manner through negotiation, mediation, and other forms of alternative dispute resolution. Mr. Bramlett also assists insurers in navigating time-limited, pre-answer demands and frequently serves as bad faith / excess oversight counsel in complex, high-value claims where extracontractual exposure is likely for insurers.

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