Voicemails Seeking Clarification Deemed Rejection and Counteroffer of Time-Limited Demand in Georgia

September 3, 2021 by on News

In a recent decision, the Georgia Court of Appeals held that the act of an insurance company leaving a voicemail to seek clarification was in fact a rejection and counteroffer of the claimant’s time-limited O.C.G.A. § 9-11-67.1 demand.  White v. Cheek, 2021 WL 2024866 (Ga. App. 2021).

After receiving a time-limited Holt / O.C.G.A. § 9-11-67.1 demand from claimant’s counsel, a GEICO claims professional called claimant’s counsel to arrange a recorded statement of the claimant to determine the extent of GEICO’s insured’s liability.  When making these phone calls, the GEICO claims professional left two voicemails for claimant’s counsel to request the recorded interview of claimant.  Claimant’s counsel interpreted these voicemails to be a rejection and counteroffer of the initial O.C.G.A. § 9-11-67.1 demand and sent written correspondence to GEICO to that effect.  Subsequently, GEICO’s counsel sent correspondence to accept the O.C.G.A. § 9-11-67.1 demand, only to have claimant’s counsel tell GEICO that the offer had already been rejected.

GEICO then filed a motion to enforce settlement, which was denied by the trial court, and the Georgia Court of Appeals upheld the trial court’s ruling.  While the Court of Appeals acknowledged the insurer’s right to seek clarification under O.C.G.A. § 9-11-67.1(d), the Court held that, “Nothing in the plain language of OCGA § 9-11-67.1...limited Cheek’s ability as the offeror to require that a request for clarification be in writing,” and that as a result, GEICO’s attempt to orally clarify constituted a rejection of the offer. 2021 WL 2024866 at *4.

One bright spot in the ruling for insurers was Judge McFadden’s dissent.  In his dissent, he expressed concern over claimant’s onerous terms and requirements in the demand in this case which was 22 single spaced pages with 16 different footnotes containing a variety of threats.  In Judge McFadden’s view, the significant additional work required by a convoluted demand of this nature tended to show that the offeror lacked any genuine intent to actually settle the claim in the first place such that a bad faith claim would be meritless.

In terms of practical considerations for insurers, this decision demonstrates the extreme caution that must be exercised in responding to a time-limited Holt / O.C.G.A. § 9-11-67.1 demand and underscores why it is so important to involve legal counsel early in the process of responding to a time-limited Holt / O.C.G.A. § 9-11-67.1 demand since counsel can assist claims professionals in navigating the many pitfalls associated with responding to these demands.  Even the seemingly innocuous act of leaving a voicemail to seek clarification may be deemed a counteroffer and rejection of the offer.  Such a rejection could obviously lead to a subsequent bad faith failure to settle claim from an insured.  To help significantly reduce this risk, insurers should retain counsel as early as possible to have the benefit of guidance from attorneys who possess experience responding to these demands and navigating the pitfalls associated with O.C.G.A. § 9-11-67.1.

Former Chief Justice Leah Sears, in her capacity as a practicing attorney, has filed a petition for writ of certiorari of the Georgia Court of Appeals’ ruling, and the Georgia Defense Lawyers Association (GDLA) has filed an amicus brief in support of the petition.  Stay tuned for a final ruling on this issue...

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

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

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