Amendments of O.C.G.A. § 9-11-67.1 Not Likely to Have the Intended Effects

O.C.G.A. § 9-11-67.1, is the Georgia statute that applies to pre-suit demands in personal injury claims arising from the use of a motor vehicle. The purported intent behind its enactment was to reign in the ability of attorneys to issue overly complex demands in cases where damages greatly exceed policy limits, and to set up an insurer for a negligent failure to settle a claim. See White v. Cheek 360 Ga. App. 557, 564 (2021).  To effectuate that intent, the statute sought to limit the material terms needed to form an enforceable settlement agreement and to place limitations on the deadlines that could be imposed by an attorney for the purpose of accepting and funding a settlement.

In 2017, however, the Supreme Court of Georgia in Grange Mut. Cas. Co. v Woodard, relying in large part on subsection (g) of the statute that provided for “prompt payment” of a settlement once accepted, concluded that O.C.G.A. § 9-11-67.1 “merely sets forth five terms that, at a minimum, must be included” in a pre-suit settlement offer, that other terms are permissible, and that a claimant “may ask the recipient of a Pre-Suit Offer to do something to accept the offer beyond stating the recipient’s acceptance in writing.” Grange Mut. Cas. Co. v Woodard 300 Ga. App. 848, 854 (2017). In so doing, the Supreme Court rendered the statute meaningless undermining the “plain meaning of the statutory scheme as crafted by the legislature.” Id. at 860-861.

Enacted on May 4, 2021, amendments to O.C.G.A. § 9-11-67.1, were signed into law in a purported effort to address the Supreme Court’s holding in Woodard and to restore the statutory scheme intended by the legislature to curtail the overly complex set-up demands. Despite the good-faith intentions of the amendment, however, it may not eliminate the onerous time-limited demands that the defense bar has been plagued by.

The 2021 amendment O.C.G.A. § 9-11-67.1 was ostensibly revised to tighten up the required material terms and cut down on the inclusion of additional terms not set forth in subsection (a) of the statute. In that regard, subsection (a) went from “shall be in writing and contain the following material terms” to “shall be in writing and . . . shall contain the following material terms. . “ (emphasis added). Additionally, the legislature added a new subsection, (b)(1), which states that “[u]nless otherwise agreed to by both the offeror and the recipients in writing, the terms outlined in subsection (a) of this Code section shall be the only terms which can be included in an offer to settle made under this Code section.”

The continued inclusion of subsection (g), albeit slightly amended, frustrates the statutory scheme and is all but certain to guarantee an interpretation of the statute similar to that provided by the Supreme Court of Georgia in Woodard.

In its opinion in Woodard, the Supreme Court of Georgia stated that “[g]iven that under the common law an offeror is free to set the terms of his or [sic] her offer, we read subsection (a) in this fashion, in harmony with the existing law: every Pre-Suit Offer must contain the five enumerated terms, but additional terms are not prohibited. Subsection (g) bolsters this reading. It provides, ‘[n]othing in this Code section shall prohibit a party making an offer to settle from requiring payment within a specified period; provided, however, that such period shall be not less than ten days after the written acceptance of the offer to settle.’ This shows that prompt payment may be a term of settlement in a Pre-Suit Offer, as long as the offeror gives the recipient of the offer at least ten days from the time of written acceptance to make the payment. And, because prompt payment is not one of the terms listed in subsection (a), subsection (g) demonstrates that, as a more general matter, a Pre-Suit Offer may include terms other than those listed in subsection (a).” Woodard, 300 Ga. App. at 855.

While the 2021 amendment amended subsection (g) from . . .“that such period shall be not less than ten days after the written acceptance of the offer to settle” to “that such date shall not be less than 40 days from the receipt of the offer,” the cornerstone of subsection (g) remains the same, that “[n]othing in this Code section shall prohibit a party from making an offer to settle from requiring payment within a specified period . . .” Consequently, subsections (b)(1) and (c) of the 2021 amendment are directly in conflict with subsection (g).

For this reason, time-limited demands will likely continue to include material terms outside of what is set forth in subsection (a). It is critical not to rely solely on subsections (b)(1) and (c) when evaluating demands. Every demand should still be carefully reviewed and analyzed to ensure that the demands are properly responded to and the insured’s interests are protected.