Progressive Mountain Ins. Co. v. Butler

• Court: Georgia Court of Appeals
• Writing for the Court: Pinson, Judge.
• Citation: Progressive Mountain Ins. Co. v. Butler, 364 Ga.App. 439, 875 S.E.2d 422 (Ga. App. 2022)
• Decision Date: 22 June 2022
• Docket Number: A22A0322
• Parties: PROGRESSIVE MOUNTAIN INSURANCE COMPANY v. BUTLER.

364 Ga.App. 439

875 S.E.2d 422

PROGRESSIVE MOUNTAIN INSURANCE COMPANY

v.BUTLER.

A22A0322

Court of Appeals of Georgia.

June 22, 2022

Kevin T. Shires Shires, for Appellant.

Caleb Govinda Avraham, for Appellee.

Pinson, Judge.

Ernest Butler was injured in a car accident and hired counsel to assist with his personal-injury claim. His counsel negotiated a settlement with the driver's insurer and sent a letter documenting Butler's acceptance of the insurer's offer. Days later, Butler fired his counsel, and he later hired another attorney, who tried to negotiate for a higher settlement amount. The insurer filed suit and moved to enforce the settlement agreement, which Butler claimed had been entered into without his consent. The trial court denied the motion, concluding that the parties had not formed an enforceable settlement agreement.

We reverse. Everyone agrees that the insurer offered to settle for a specific dollar amount, and counsel's letter unequivocally accepted that offer without imposing any additional conditions. That is enough to form an enforceable settlement agreement here, and because the insurer was not made aware of any restrictions on the authority of Butler's counsel, her assent bound Butler. If Butler did not authorize the settlement, his recourse is against the attorney.

Background

The following facts are undisputed. In March 2019, Butler was injured when his vehicle was side-swiped by a tractor-trailer. The tractor-trailer driver, Julio Maden, was employed by a commercial motor carrier, Carrier Compliance Service, which was insured by Progressive. Butler retained counsel, who began negotiating with Progressive to settle the case.

On January 22, 2020, Butler's counsel, Sarah Jett, emailed a Progressive representative. The email stated: "Attached is the hold harmless letter. Please send the check and settlement documents to: [Jett's law firm's name and address]." Attached to the email was a letter stating:

Please allow this letter to confirm that Ernest Butler accepts Progressive Mountain Insurance Company's offer of $17,500.00 as full and final settlement of the above-referenced claim. This settlement is for the bodily injury claim ONLY. Please make the check payable to Ernest Butler and The Law Offices of Gary Martin Hays & Associates, P.C. Further our firm agrees to address any statutorily valid liens filed prior to the distribution of the settlement funds.

The letter again asked Progressive to forward the check and settlement documents to Jett at the firm's address.

Eight days later, Jett sent a letter to Progressive stating that her firm no longer represented Butler and giving notice of an attorneys’ lien her firm was placing on any future settlement or verdict in the case. About a month after that, Butler's new counsel sent Progressive a letter offering to settle the case for $350,000. Counsel representing Carrier and Maden responded with a letter noting that Butler had already agreed to settle the case for $17,500 and requesting instructions for submitting payment and settlement documents.

Butler did not respond, and two months later, Progressive sued Butler, seeking a declaratory judgment stating that the parties had reached a binding settlement agreement. Butler answered, denying that he had ever accepted a settlement offer and asserting that Jett had engaged in settlement negotiations without his consent. Progressive then moved to enforce the settlement agreement.

After a hearing, the trial court entered an order denying the motion to enforce. The court found that Jett's January 22, 2020 letter "did not include any specific terms" and was not "made available to" Butler. The court also found that Jett "never received a formal offer, in writing, from [Progressive]"; that neither Butler nor Jett ever "signed any release of liability agreement or other settlement documents"; and that Progressive "never agreed to the terms" in Jett's letter or remitted any payment to Butler. Based on these findings, the court concluded that the letter was not an enforceable settlement agreement.

Progressive appealed.¹

Discussion

The trial court decided this case on motion rather than by a bench trial, so "the issues raised in this appeal are analogous to those in a motion for summary judgment[,] [and] [o]ur review is de novo." Jones v. Frickey , 274 Ga. App. 398, 400, 618 S.E.2d 29 (2005) (citation and punctuation omitted). Accord Cumberland Contractors, Inc. v. State Bank and Trust Co. , 327 Ga. App. 121, 127 (3), 755 S.E.2d 511 (2014). Summary judgment is proper if the pleadings and evidence of record show "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." OCGA § 9-11-56 (c).

1. We start by discarding a potential threshold basis for rejecting the settlement agreement: Jett's authority to settle Butler's claims. Although Butler has maintained that he did not authorize Jett to agree to Progressive's offer, he acknowledges that he cannot rely on that basis to avoid the agreement, because Jett had apparent authority to enter into a settlement agreement. See Brumbelow v. Northern Propane Gas Co. , 251 Ga. 674, 674-75 (2), 308 S.E.2d 544 (1983).

We agree. Under Georgia law, attorneys have the apparent authority to enter into agreements on behalf of their clients, and those agreements are enforceable against the clients by other settling parties. Brumbelow , 251 Ga. at 674, 308 S.E.2d 544 ; see OCGA § 15-19-5. Put another way, unless an opposing party has been made aware of express restrictions on the attorney's authority to settle, that authority "may be considered plenary by the court and opposing parties," and the attorney's assent to an agreement will bind the client. Id. at 675, 308 S.E.2d 544. If an attorney "overstep[s] the bounds of his agency" in negotiating on the client's behalf and reaches an agreement he did not authorize, the client's remedy for that problem is to seek redress against the attorney. Brumbelow , 251 Ga. at 675, 308 S.E.2d 544. Accord Blanton v. Crump Heating & Air, LLC , 345 Ga. App. 488, 491, 811 S.E.2d 125 (2018) (physical precedent only). Just so here.

2. Because Jett had apparent authority to settle his claims, Butler does not rely on her purported lack of actual authority to attack the settlement agreement. Instead, he contends that Jett's letter did not create a binding settlement agreement at all.

Settlement agreements are subject to "the same requirements of formation and enforceability as other contracts." Grange Mut. Cas. Co. v. Woodard , 300 Ga. 848, 852 (2) (A), 797 S.E.2d 814 (2017) (citation and punctuation omitted). Accord Jones , 274 Ga. App. at 401, 618 S.E.2d 29. This means that an agreement to settle a pending dispute is formed only "when the minds of the parties meet at the same time, upon the same subject matter, and in the same sense." Id. (citation omitted). When an offer to settle has been extended, an answer to the offer will amount to an acceptance only if it is "unconditional and identical with the terms of the offer." Id. (citation and punctuation omitted). All of that said, "[t]he law favors compromise, and when parties have entered into a definite, certain, and unambiguous agreement to settle, it should be enforced." Cumberland Contractors , 327 Ga. App. at 127 (3), 755 S.E.2d 511 (citation and punctuation omitted).

The required offer and unconditional acceptance are present here. Butler admits that Progressive offered to settle Butler's claims for $17,500, and Jett's letter unconditionally accepted Progressive's offer to settle those claims for that same amount. This is enough to create a binding settlement agreement. See, e.g., Vildibill , 244 Ga. App. at 749 (1), 536 S.E.2d 779 (letter accepting offer to settle for specific dollar amount in return for " ‘any release you deem appropriate’ " created a binding settlement agreement); Herring v. Dunning , 213 Ga. App. 695, 698-99, 446 S.E.2d 199 (1994) (attorney's letter written to accept plaintiff's offer to settle claims for $15,000 in exchange for full and final release created binding settlement agreement). See also Turner v. Williamson , 321 Ga. App. 209, 213 (2), 738 S.E.2d 712 (2013) (binding settlement agreement formed where insurance-claims handler's written and oral communications showed unequivocal acceptance of an offer to settle for insurance policy limits in exchange for execution of statutory release form). Jett's letter also includes information about the logistics of payment and the handling of liens by Jett's firm, but this language was purely informational and did not impose any additional conditions that would have created a counteroffer rather than an acceptance. See McReynolds v. Krebs , 290 Ga. 850, 853 (2), 725 S.E.2d 584 (2012) ("A purported acceptance of a plaintiff's settlement offer which imposes conditions ... will be construed as a counter-offer." (citation and punctuation omitted)); Herring , 213 Ga. App. at 698-99, 446 S.E.2d 199 (language asking about the existence of liens did not create a counteroffer because it merely sought confirmation of counsel's belief about the absence of liens rather than impose a new condition).² Finally, Jett's letter satisfies the writing requirement for settlement agreements whose existence or terms are in dispute. See Brumbelow , 251 Ga. at 676, 308 S.E.2d 544 (citing OCGA § 15-19-5 ) (explaining that "[o]rdinarily, for an attorney to bind his client to a settlement agreement where there is a dispute as to terms, the agreement must be in writing," and "letters or documents prepared by attorneys which memorialize the terms of the agreement" satisfy that...