Sherman v. Dickey, A13A0787.

• Decision Date: 21 October 2013
• Docket Number: No. A13A0787.,A13A0787.
• Citation: 744 S.E.2d 408,322 Ga.App. 228
• Parties: SHERMAN et al. v. DICKEY et al.
• Court: Georgia Court of Appeals

322 Ga.App. 228

744 S.E.2d 408

SHERMAN et al.

v.DICKEY et al.

No. A13A0787.

Court of Appeals of Georgia.

June 12, 2013.

Certiorari Denied Oct. 21, 2013.

Jeremy Emanuel Citron, for appellants.

Waldon, Adelman, Castilla, Hiestand & Prout, Jonathan Myles Adelman, Atlanta, for appellees.

DILLARD, Judge.

In this personal-injury action arising from a motor-vehicle accident, Daniel Sherman and Jennifer Sherman appeal the trial court's order granting summary judgment to William Allen Dickey and Melvin Dickey to enforce a settlement agreement. On appeal, the Shermans argue that the trial court erred in (1) granting summary judgment to the Dickeys when the facts show that the parties did not reach an enforceable settlement agreement and (2) awarding attorney fees pursuant to OCGA § 13–6–11. Because a binding settlement agreement was reached but the trial court was without authority to award attorney fees on summary judgment, we affirm in part and reverse in part.

The record reflects that Daniel Sherman and the Dickeys were involved in a motor-vehicle accident, which resulted in Sherman suffering serious injuries and incurring significant medical expenses. The Dickeys' vehicle was covered by an insurance policy issued by First Acceptance Insurance Company of Georgia, Inc. And on August 10, 2010, the Shermans offered to settle their claims against the Dickeys in exchange for the $25,000 policy limit covering the subject vehicle.

Specifically, the Shermans' demand requested receipt of a settlement check, a limited-liability release, and affidavits to establish the limits of the available liability-insurance coverage, all by August 20, 2010. As to the limited-liability release, the demand explained that it could not include language requiring indemnification or the release of any property-damage claims, but the demand did not include any other restrictions as to what could or could not be included in the release.

Two days after receiving the demand, the Dickeys' attorney sent correspondence to the Shermans' attorney, seeking clarification on a few points. Enclosed in this correspondence was what the Dickeys' attorney deemed a “sample” limited-liability release, to which he invited a response letting him “know if you see anything in this limited liability release which causes you concern.” Thereafter, the Dickeys ultimately obtained an extension to respond to or otherwise accept the Shermans' demand until August 25, 2010.

On August 20, 2010, the Shermans' attorney indicated that he would provide a draft of a limited-liability release, and this was sent to the Dickeys' attorney via e-mail on August 23, 2010, along with responses to the earlier-requested clarifications. That same day, the Dickeys' attorney responded through e-mail and attached “proposed revisions” to the release drafted by the Shermans' attorney, including a statutory healthcare-provider lien affidavit in the release,¹ which read as follows:

The Undersigned, who first being sworn, deposed and said that they have the legal capacity to give the within affidavit, that the[y] are giving the within affidavit from personal knowledge for all purposes permitted under law, hereby declare, assure, and warrant that they are residents of Henry County, Georgia. In addition, with respect to the treatment of the injuries for which this settlement is made, all hospital, nursing home, physician practice, or provider of traumatic burn care medical practice bills have been fully paid. The sworn statement in this subpart shall constitute an affidavit in compliance with OCGA § 44–14–473.²

The Dickeys' attorney specifically stated in his correspondence that “[i]f you do not want your client to sign a release with my proposed changes, please let me know and let's discuss.” The Shermans' attorney responded that he would take a look at the revised settlement documents and “get back to” the Dickeys' attorney.

When the Dickeys did not receive a response from the Shermans' attorney by the following day, they sent a letter unconditionally accepting the demand and included a check for the $25,000 policy limit, the requested affidavits, and a limited-liability release containing the language e-mailed to the Shermans' attorney the previous day. The letter stated that the enclosed release was “proposed” and again invited feedback if the Shermans disagreed with the proffered changes.

Thirty days then passed with the Dickeys hearing nothing from the Shermans. And when the Dickeys made inquiry into the status of the settlement, they learned that the Shermans were in the process of deciding whether the inclusion of the statutory-lien affidavit in the proposed release constituted a counteroffer. Thereafter, in September and November, the Dickeys' attorney again invited the Shermans to discuss or make changes to the proposed release, but instead, the Shermans returned the settlement check on November 2, 2010, along with a “rejection” of what they deemed the Dickeys' counteroffer.

The Dickeys eventually filed a complaint for breach of contract, seeking specific performance of the settlement agreement and attorney fees pursuant to OCGA § 13–6–11, and the Shermans counterclaimed with personal-injury claims. Both parties then moved for summary judgment on their respective claims. The trial court granted the Dickeys' motion for summary judgment; denied the Shermans' cross-motion; and awarded the Dickeys $6,400 in requested attorney fees pursuant to OCGA § 13–6–11, finding that the Shermans' behavior “constitutes stubborn litigiousness and bad faith litigation.” ³ This appeal by the Shermans follows.

1. First, the Shermans argue that the trial court erred in granting summary judgment to the Dickeys to enforce the settlement agreement, arguing that the parties failed to reach a binding agreement. We disagree.

To begin with, we note that in reviewing the trial court's order on both a motion to enforce a settlement agreement and a motion for summary judgment, we apply a de novo standard of review ⁴ and, thus, view the evidence in a light most favorable to the nonmoving party. ⁵ Moreover, well-established principles guide our inquiry into whether the parties entered into a settlement agreement.⁶ Chief among these principles is that, in order to prevent litigation, “[c]ompromises of doubtful rights are upheld by general policy....” ⁷

At the same time, courts are certainly limited to “those terms upon which the parties themselves have mutually agreed.” ⁸ Indeed, apart from such mutual agreement, no enforceable contract exists between the parties.⁹ And settlement agreements must meet the same requirements of formation and enforceability as other contracts. ¹⁰ Thus, an answer to an offer “will not amount to an acceptance, so as to result in a contract, unless it is unconditional and identical with the terms of the offer.” ¹¹ The offer must be accepted “unequivocally and without variance of any sort.” ¹² And if a purported acceptance of the plaintiff's settlement offer imposes any new conditions, it constitutes a counteroffer rather than an acceptance.¹³ Nevertheless, when determining whether a purported acceptance imposes conditions rendering it a counteroffer, “our courts have drawn a distinction for ‘precatory words,’ ” ¹⁴ which are words “whose ordinary significance imports entreaty, recommendation, or expectation rather than mandatory direction.” ¹⁵ Finally, we note that the party asserting the existence of a contract has the burden of proving its existence and its terms. ¹⁶ With the foregoing principles in mind, we turn now to the Shermans' argument on appeal.

The Shermans contend that the Dickeys' insertion of statutory-lien-affidavit language into a proposed limited-liability release rendered their purported acceptance a counteroffer. But the record reflects that the Dickeys repeatedly invited changes to the proposed release and feedback regarding any concerns the Shermans might have, and we discern nothing to suggest that the Dickeys intended for the release to constitute a counteroffer or that the Shermans were required to sign that particular release to effectuate settlement.¹⁷And it is well settled that the mere inclusion of a release form that is unacceptable to the plaintiff “does not alter the fact that a meeting of the minds has occurred with regard to the terms of the settlement.” ¹⁸ Furthermore, the inclusion of the statutory-lien affidavit sought only to confirm an assertion that had previously been made by the Shermans' attorney— i.e., that there were no known healthcare-provider liens.¹⁹ Accordingly, the trial court did not err in determining that a binding settlement agreement was reached and granting summary judgment to the Dickeys.

2. Next, the Shermans contend that the trial court erred in granting attorney fees pursuant to OCGA § 13–6–11. We agree.²⁰

OCGA § 13–6–11 provides that

[t]he expenses of litigation generally shall not be allowed as a part of the damages; but where the plaintiff has specially pleaded and has made prayer therefor and where the defendant has acted in bad faith, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense, the jury may allow them.

Here, when the trial court awarded summary judgment to the Dickeys on their contention that a binding settlement agreement was reached, it also granted their request for $6,400 in requested attorney fees after finding that the Shermans' behavior “constitutes stubborn litigiousness and bad faith litigation.” On appeal, the Shermans argue, inter alia, that the trial court's award of attorney fees was erroneous because the trial court did not have the power to make such an award at summary judgment. The Shermans are correct.

Our Supreme Court has held that attorney fees cannot be awarded by a trial court pursuant to OCGA § 13–6–11 at the summary-judgment stage of proceedings because the very language of the statute “prevents a trial court from ever determining that a claimant...