Grange Mut. Cas. Co. v. Woodard

• Decision Date: 30 June 2017
• Docket Number: No. 15-13295,15-13295
• Citation: 861 F.3d 1224
• Parties: GRANGE MUTUAL CASUALTY COMPANY, Plaintiff–Appellant, v. Boris WOODARD, Susan Woodard, Defendants–Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

861 F.3d 1224

GRANGE MUTUAL CASUALTY COMPANY, Plaintiff–Appellant,

v.Boris WOODARD, Susan Woodard, Defendants–Appellees.

No. 15-13295

United States Court of Appeals, Eleventh Circuit.

June 30, 2017

Thomas Peter Allen, III, William James Davis, Martin Snow, LLP, Macon, GA, for Plaintiff–Appellant.

Richard Dolder, James N. Sadd, Slappey & Sadd, LLC, Atlanta, GA, for Defendants–Appellees.

Garret Warrington Meader, Brown Readdick Bumgartner Carter Strickland & Watkins, LLP, Brunswick, GA, for Amicus Curiae Georgia Defense Lawyers Association.

Before HULL and BLACK, Circuit Judges, and MORENO,^* District Judge

HULL, Circuit Judge:

This case returns to us from the Supreme Court of Georgia, to whom we certified certain questions concerning O.C.G.A. § 9–11–67.1. Before turning to those questions, we offer a brief review of the facts, which are not in dispute and are set out more fully in our previous opinion. See Grange Mut. Cas. Co. v. Woodard , 826 F.3d 1289 (11th Cir. 2016).

I. FACTUAL BACKGROUND

In March 2014, the Dempseys and the Woodards were involved in a car accident in which Boris Woodard was injured and his adult daughter, Anna Woodard, was killed. Grange Mut. , 826 F.3d at 1291. The Dempseys carried car insurance through Grange Mutual Casualty Company (the "Insurer Grange"). Id. The Dempseys' liability limits for bodily injury claims were $50,000 per person and $100,000 per accident. Id.

On June 19, 2014, the Woodards' attorney mailed the Insurer Grange a settlement offer, offering a limited release of their claims against the Dempseys and the Insurer Grange in exchange for the $100,000 policy limit. Id. The June 19 letter was titled "Offer to Settle Tort Claims Made Pursuant to O.C.G.A. § 9–11–67.1 and O.C.G.A. § 51–12–14." Id.

As this Court previously explained:

The Woodards' June 19 letter contained an 11–item list of requirements for the Insurer Grange to comply with to accept the settlement offer. A statement, typed in bold, preceded the list and said: "The following items must be noted and fully and strictly complied with in order to accept this offer. " The items most relevant to this appeal (numbers 1–5) are summarized below.

(1) "Pursuant to O.C.G.A. § 9–11–67.1, you have 30 days from your receipt of this offer to accept it."

(2) "Your acceptance of this offer must be made in writing to me at the above address shown in my letterhead. If we do not actually receive a timely acceptance, this offer will be deemed rejected...."

(3) Acceptance requires affidavits from Thomas Dempsey, Delann Dempsey, and a Grange officer, swearing to the policy limits. "All three affidavits must be received in my office within ten (10) days after your written acceptance of this offer to settle. Timely compliance with this paragraph is an essential element of acceptance."

(4) "If payment is not tendered in cash pursuant to O.C.G.A. 9–11–67.1(f)(1), payment in the amount of $50,000 must be made payable to ‘Boris and Susan Woodard and Michael L. Neff, their attorney for the wrongful death of their daughter, Anna Woodard’ within ten (10) days after your written acceptance of this offer to settle. Timely payment is an essential element of acceptance. "

(5) "If payment is not tendered in cash pursuant to O.C.G.A. 9–11–67.1(f)(1), payment in the amount of $50,000 must be made payable to ‘Boris Woodard and Michael L. Neff, his attorney’ within ten (10) days after your written acceptance of this offer to settle. Timely payment is an essential element of acceptance. "

Id. at 1291–92 (emphases added).

It is undisputed that the Insurer Grange timely sent the Woodards' attorney a written acceptance of the offer on July 22, 2014. Id. at 1292. Ten days from the July 22 acceptance letter was August 1. Id. On July 29, the Insurer Grange emailed the Woodards' attorney the required affidavits and stated that the checks were being issued that day. Id.

Heather Conn, the claims adjuster that the Insurer Grange had assigned to the case (the "Adjuster Conn"), ordered the two settlement checks through the Insurer Grange's automated claims payment system, which was the company's routine practice for issuing such checks. Id. at 1291, 1292. As this Court previously explained:

Adjusters pull the mailing address for the checks from contact information previously uploaded into the Insurer Grange's system. The adjusters order the checks to go to the address on file, and then the checks are printed and mailed from a central location. The adjusters never see the checks.

Id. at 1292. Adjuster Conn followed this process when ordering the checks on July 29, using the contact information that was in the system for the Woodards' attorney.¹ Id.

On August 12, attorney Michael Neff ("Attorney Neff") told Adjuster Conn that the settlement checks had not arrived and that the parties, therefore, had never reached a binding settlement agreement. Id. Despite Attorney Neff's statement that he would not accept reissued checks, Adjuster Conn ordered new checks and mailed them to Attorney Neff on August 12, along with screenshots showing the July 29 issuance of the original checks. Id. According to Conn's accompanying letter to Neff, the screenshots showed that the law office's address was complete in the "address tab," but "somehow drop [ped] off in the mail/billing address tab." Id. The Woodards rejected this as an untimely settlement offer and returned the new checks. Id. at 1292–93.

An information technology employee at the Insurer Grange later executed an affidavit stating that, when he created "test checks" using the information in the Insurer Grange's system, the street was missing from the mailing address printed on the checks. Id. at 1293. The employee concluded that "the street address was likely missing from the July 2014 checks." Id.

II. PROCEDURAL BACKGROUND

A. Proceedings before the district court

In October 2014, the Insurer Grange filed a one-count complaint against the Woodards. Id. The parties filed cross motions for summary judgment in the district court. Id. at 1293–94. The district court granted the Woodards' motion for summary judgment and denied the Insurer Grange's cross-motion, concluding that the parties never formed a settlement contract. Id. at 1294.

The district court first concluded that O.C.G.A. § 9–11–67.1 does not prohibit a party from requiring payment as a condition of acceptance of a settlement offer. Id. at 1294–95. The district court also concluded that the Woodards had made timely payment a condition of acceptance of their settlement offer. Id. at 1295. Finally, the district court held that the Insurer Grange did not comply with the timely payment requirement, that it consequently failed to accept the Woodards' settlement offer, and that the parties thus had not formed a binding settlement agreement. Id.

B. Proceedings before this Court

On appeal, this Court concluded that O.C.G.A. § 9–11–67.1 was "arguably ambiguous with respect to its requirements."² Id. at 1300. If O.C.G.A. § 9–11–67.1 were interpreted to mean that an offeree could accept an offer in writing, thereby forming a binding contract with payment being a term of contract performance rather than contract formation , then the Insurer Grange would have fulfilled the requirements of the offer letter and a binding settlement agreement would have been formed. Id. If, on the other hand, timely payment was a precondition to acceptance under the statute, then the Insurer Grange's failure to make that timely payment meant that no contract was ever formed between the parties. Id. Because there was "substantial doubt about the correct answer to a dispositive question of state law," we certified the following four questions to the Supreme Court of Georgia:

(1) UNDER GEORGIA LAW AND THE FACTS OF THIS CASE, DID THE PARTIES ENTER A BINDING SETTLEMENT AGREEMENT WHEN THE INSURER GRANGE ACCEPTED THE WOODARDS' OFFER IN WRITING?

(2) UNDER GEORGIA LAW, DOES O.C.G.A. § 9–11–67.1 PERMIT UNILATERAL CONTRACTS WHEREBY OFFERORS MAY DEMAND ACCEPTANCE IN THE FORM OF PERFORMANCE BEFORE THERE IS A BINDING, ENFORCEABLE SETTLEMENT CONTRACT?

(3) UNDER GEORGIA LAW AND THE FACTS OF THIS CASE, DID O.C.G.A. § 9–11–67.1 PERMIT THE WOODARDS TO DEMAND TIMELY PAYMENT AS A CONDITION OF ACCEPTING THEIR OFFER?

(4) UNDER GEORGIA LAW AND THE FACTS OF THIS CASE, IF THERE WAS A BINDING SETTLEMENT AGREEMENT, DID THE INSURER GRANGE BREACH THAT AGREEMENT AS TO PAYMENT, AND WHAT IS THE REMEDY UNDER GEORGIA LAW?

Id. at 1300–01.

C. Proceedings before the Supreme Court of Georgia

On March 6, 2017, the Supreme Court of Georgia issued its decision in response to our certified questions, answering Question 2 in the affirmative and also answering Question 3 in the affirmative as a "general issue of law," although it declined to consider Question 3 in the context of the facts of this case. Grange Mut. Cas. Co. v. Woodard , 300 Ga. 848, 797 S.E.2d 814, 823 (2017).

The Georgia Supreme Court first noted that statutes are to be given their "plain and ordinary meaning," and that O.C.G.A. § 9–11–67.1 should be interpreted in view of the "large body of law on contract formation generally and settlement formation specifically." Id. at 818–19.

Parsing the language of the statute, the Supreme Court of Georgia concluded that, while O.C.G.A. § 9–11–67.1 sets forth certain terms and conditions that must be included in every written offer of settlement, nothing in Georgia law or the statute precludes parties from requiring "some additional act to effectuate acceptance":

We agree [with the Insurer Grange] ... that a Pre–Suit Offer must be accepted in writing, at least as to the five terms listed in subsection (a). We do not agree that this language means that a Pre–Suit Offer cannot also require some additional act to effectuate acceptance, however.... [T]he common law is well established that (1) the offeror is the master of his or her offer, and (2) agreement requires a meeting of the minds on all material terms. Reading the statute consistent with those principles, we do not

...