Stephens v. Castano-Castano

• Court: Georgia Court of Appeals
• Writing for the Court: Bethel, Judge.
• Citation: Stephens v. Castano-Castano, 814 S.E.2d 434, 346 Ga. App. 284 (Ga. App. 2018)
• Decision Date: 29 May 2018
• Docket Number: A18A0100
• Parties: STEPHENS v. CASTANO-CASTANO.

346 Ga.App. 284

814 S.E.2d 434

STEPHENS

v.CASTANO-CASTANO.

A18A0100

Court of Appeals of Georgia.

May 29, 2018

Reconsideration Denied June 14, 2018

Certiorari Denied February 18, 2019

Gray, Rust, St. Amand, Moffett & Brieske, Michael J. Rust, Nicole C. Leet ; Leitner, Williams, Dooley & Napolitan, Michael D. Newton, Robert A. Butler, Charles G. Hoey, for appellant.

Charles M. Cork III, Jeffrey P. Yashinsky, for appellee.

Madeline E. McNeeley, Kristin L. Pierson, Paige E. McKinney, amici curiae.

Bethel, Judge.

This appeal arises from an accident in which Michael Stephens’ vehicle collided with Yolanda Castano's vehicle. On appeal, Michael Stephens (the defendant in the underlying litigation) argues that the trial court erred: (1) in denying his motion to enforce a settlement agreement; (2) by prohibiting questioning and evidence regarding a treating physician's financial interest in the case; and (3) by excluding questioning and evidence related to the treating physician's potential bias and credibility. We decline to find that the trial court committed error when it denied Stephens’ motion to enforce the settlement agreement and when it excluded evidence that Castano's attorney referred her to the treating physician. However, Stephens should have been permitted to introduce evidence of the treating physician's financial interest in the case. Therefore, for the reasons that follow, we affirm in part and reverse in part.

Alleged Settlement Agreement

Following a car accident in which Castano claimed she was injured by a vehicle driven by Stephens, Castano retained legal counsel. On September 3, 2013, Castano's counsel sent a settlement demand for the $25,000 insurance policy limits to Stephens’ insurer. In addition to requesting payment in the amount of the policy limits, the settlement demand letter indicated that settlement was contingent upon sworn affidavits from the insurer, insured, and defense counsel regarding the amount of insurance coverage available, and a limited release. The demand letter indicated that it would otherwise be withdrawn in 30 days, and that payment was to be made within that time.

Twenty days later, a representative from Stephens’ insurer called Castano's counsel to indicate that it would pay policy limits, would work with defense counsel on the limited release, and that it was attempting to contact Stephens with respect to the affidavit. The insurance representative stated that she could not immediately issue the check and that she would have to wait until she was instructed to do so by defense counsel. Castano's counsel indicated that he would wait to hear from defense counsel.

On November 5, 2013, defense counsel contacted Castano's counsel via email "to facilitate the settlement of this matter." To that end, defense counsel requested the status of any liens resulting from the accident and drafting instructions for the settlement check. A little over an hour later, Castano's counsel responded with payment instructions for the check and stated that liens were being negotiated and would be paid from "this recovery" directly from their escrow account. Defense counsel requested confirmation that there were no Medicare or Medicaid liens and that a limited liability release had been requested (as opposed to a general release). Minutes later, Castano's counsel clarified that there were no Medicare or Medicaid liens and that a limited liability release was all that was needed.

However, one week later, Castano's counsel sent a letter to defense counsel claiming that Stephens and his insurer had failed to timely respond to the settlement demand, and that any payment of the policy limits would be rejected. Two weeks later, Stephens’ insurer tendered the $25,000 settlement check and proposed limited liability release to Castano's counsel. Castano's counsel immediately rejected the tender, stating that the insurer's delays had been "unreasonable."

Castano filed suit against Stephens alleging negligence and negligence per se and requested damages and attorney fees. Stephens filed a motion to enforce the settlement. Following a hearing, the trial court denied the motion, stating that by its express terms, the original offer contained in the demand letter had expired on October 5, 2013, and that the e-mails exchanged between the parties, alone, were not sufficient to constitute an offer and acceptance such that a new contract to settle between the parties could be inferred following the expiration of the original offer.

Expert Witness

Prior to trial, Castano filed a motion in limine to exclude any reference or suggestion that she was referred to Dr. Chappuis, the physician who performed her neck surgery, by her attorney or that her attorney assisted in securing funding for the treatment. Stephens objected, noting that the jury was entitled to consider Dr. Chappuis’ financial interest in the case and potential bias, interest, or partisanship. Following oral argument, the trial court granted Castano's motion, noting that the attorney referral to the physician was not relevant, that Dr. Chappuis would be entitled to collect on the amounts owed regardless of the outcome of the case, and that the lien on the lawsuit was merely security on the debt.

At trial, Stephens made an offer of proof to introduce testimony and evidence regarding Dr. Chappuis’ financial interest and potential bias in the case.¹ The jury awarded a verdict of $700,000 against Stephens. This appeal followed.

1. Stephens argues that the trial court erred in denying his motion to enforce settlement. This Court applies a de novo standard of review to a trial court's order on a motion to enforce a settlement agreement. DeRossett Enter., Inc. v. Gen. Elec. Capital Corp. , 275 Ga. App. 728, 728, 621 S.E.2d 755 (2005).

Because the issues raised are analogous to those in a motion for summary judgment, in order to succeed on a motion to enforce a settlement agreement, a party must show the court that the documents, affidavits, depositions and other evidence in the record reveal that there is no evidence sufficient to create a jury issue on at least one essential element of the appellant[’s] case. Thus, we view the evidence in a light most favorable to the nonmoving party.

Tillman v. Mejabi , 331 Ga. App. 415, 415, 771 S.E.2d 110 (2015) (citation and punctuation omitted).

(a) Stephens first argues that the trial court should have considered parol evidence (that is, the prior communications between the parties) to explain ambiguities in the e-mail communications. He asserts that, following the initial letter from Castano demanding settlement within thirty days for policy limits (that was sent on September 3, 2013), Castano accepted a counteroffer contained in the November 5th e-mail between the parties. The text of that e-mail was:

We have been retained by [Stephens’ insurer] to facilitate the settlement of this matter. Will you please provide me with the status of any liens resulting from this accident and the drafting instructions for the settlement check? Thanks, and I look forward to working with you to get this matter resolved.

A little over an hour later, Castano's counsel responded that "we are negotiating the liens now and will pay them from this recovery directly from our escrow acct." Castano also included payment instructions for the check.

It is clear that the initial offer, set to expire within thirty days, was not timely accepted. See Herring v. Dunning , 213 Ga. App. 695, 699, 446 S.E.2d 199 (1994) ("The offer must be accepted in the manner specified by it; and if it calls for a promise, then a promise must be made; or if it calls for an act; it can be accepted only by the doing of the act." (citation and punctuation omitted)). See also Penn v. Muktar , 309 Ga. App. 849, 850-851, 711 S.E.2d 337 (2011) (offer to settle required insurance company to perform certain acts within 20 days of demand letter). Here, the demand letter expressly required that payment be physically delivered to the office of Castano's counsel.² That did not occur. Therefore, Stephens relies upon the "counteroffer" contained in the November 5th e-mail correspondence. However, after reviewing the language contained within that e-mail, we do not agree that it constituted a "counteroffer" that was accepted and resulted in an enforceable agreement. See Herring , 213 Ga. App. at 697, 446 S.E.2d 199 ("If the offer is in any case so indefinite as to make it impossible for a court to decide just what it means, and to fix the legal liability of the parties, its acceptance can not result in an enforceable agreement." (citation and punctuation omitted) ).

[I]n order for the contract³ to be valid the agreement must ordinarily be expressed plainly and explicitly enough to show what the parties agreed upon. A contract cannot be enforced in any form of action if its terms are incomplete or incomprehensible. There are instances when certain deficiencies or ambiguities may be explained by facts aliunde to the instrument itself. However, information of such extrinsic nature may not be utilized to supply that which is essential to constitute a valid contract.

West v. Downer , 218 Ga. 235, 241-242 (5), 127 S.E.2d 359 (1962) (citations omitted). See also Kreimer v. Kreimer , 274 Ga. 359, 363 (2), 552 S.E.2d 826 (2001) ("It is well established that no contract exists until all essential terms have been agreed to, and the failure to agree to even one essential term means that there is no agreement to be enforced." (citation and punctuation omitted) ). "If a contract fails to establish an essential term, and leaves the settling of that term to be agreed upon later by the parties to the contract, the contract is deemed an unenforceable ‘agreement to agree.’ " Id. (citation omitted).

Here, the amount of the proposed settlement, which is an essential element, was missing from the November 5 "counteroffer." Stephens would have us infer the amount from his prior letter containing the $25,000...