Earlier this year, Georgia law regarding time limited demands in personal injury matters arising out of motor vehicle collisions was changed to make every offer to settle extended in such cases an offer to enter into a bilateral contract. Specifically, OCGA § 9-11-67.1, was amended to state, in part, that "[a]ny offer to settle a tort claim for personal injury, bodily injury, or death arising from a motor vehicle collision shall be an offer to enter into a bilateral contract." O.C.G.A. § 9-11-67.1(a).
Inclusion of the "bilateral contract" language is significant. A bilateral contract is a contract in which the parties embrace "reciprocal duties and obligations." Aspironal Laboratories v. Rosenblat, 34 Ga. App. 255 (1925). Therefore, making every settlement offer extended in a motor vehicle personal injury case an offer to enter a bilateral contract significantly reduces the ability of the offeror, typically a claimant or a plaintiff, to declare that the non-performance of an immaterial term or the imperfect performance of a material term, constitutes a rejection of the offer. In other words, once accepted, the settlement offer becomes a bilateral contract requiring performance by both parties.
While the 2024 amendment to OCGA § 9-11-67.1 is a huge step toward minimizing bad faith exposure for insurers caused by innocent missteps in overly complex "Gotcha" demands, it does not create a complete stop gap to potential exposure. Plaintiffs' attorneys remain free to craft their policy limits demands in the way they want them crafted. Undoubtedly, they will find ways to craft those demands to encourage missteps in performance which will result in litigation over the meaning of the statute. And that is where the significance of the bilateral contract comes into play because a party is only excused from its obligation to perform a bilateral contract, where the other party breaches the contract through performance of its obligations in such a way "as to indicate an intention to repudiate the contract". See 15 Williston on Contracts § 43:17 (4th ed.); see also Taliafaro, Inc. v. Rose, 220 Ga. App 249 (1996).
OCGA § 9-11-67.1, as amended, makes clear what terms are material and what terms are not material. See OCGA § 9-11-67.1(b)(1). As such, once the demand is accepted per the terms of the statute, the offeror, typically the claimant/plaintiff, is obligated to perform provided that the offeree, typically the tortfeasors insure, does not perform its obligations related to the material terms in such a way as to "indicate an intention to repudiate the contract." See 15 Williston on Contracts, supra. In other words, where a written acceptance is properly made, innocent mistakes in performance of an overly complex demand should not tank the settlement.
The complexity of contracts and the concepts of offer and acceptance were weaponized by some among the plaintiffs' bar to secure settlements for their clients of more than the available policy limits. With its mandate that settlement offers, i.e. demands, in automobile personal injury matters be construed as bilateral contracts, OCGA § 9-11-67.1, as amended in 2024, will reduce the prevalence and effectiveness of the overly complex demand and, consequently, make it harder for plaintiffs' attorneys to set up an insurer in automobile claims.
All that said, if you are faced with a complex demand in a automobile personal injury claim, it is always recommended that you consult with an attorney that is well-versed in the requirements of the amended statute, the case law leading up to the amendments to the statute, and the nuances of bilateral contracts.
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