The Georgia Supreme Court recently held that, although injured parties presented an insurer a valid offer to settle within the insured’s policy limits, because that offer did not include a deadline for accepting the offer, the insurer did not act unreasonably in failing to accept the offer before it was withdrawn. First Acceptance Ins. Co. of Ga. v. Hughes, 2019 Ga. LEXIS 161 (Ga. Mar. 11, 2019).

The insured caused a multi-vehicle collision. His auto insurer was advised that five other people had been injured as a result of the collision and retained counsel to help resolve the five known injury claims. The insurer’s counsel sent a letter to the attorneys for the claimants to inform them of the insurer’s interest in arranging a joint settlement conference/mediation in an effort to resolve the claims. Counsel for two of the claimants sent letters to the insurer’s counsel stating his clients’ interest in attending a settlement conference, and, in the alternative, offered to settle for the available policy limits. The claimants’ counsel later filed a complaint against the administrator of the insured’s estate seeking damages arising out of the collision and, shortly thereafter, revoked the offer. The jury returned a verdict against the administrator, which sued the insurer alleging negligence and bad faith in the insurer’s failure to settle within policy limits. The appellate court reversed the trial court’s grant of summary judgment to the insurer on the administrator’s failure-to-settle claim. The Georgia Supreme Court granted certiorari.

The Georgia Supreme Court reversed, finding that the offer did not include a deadline for acceptance and the insurer was not put on notice that its failure to accept the offer within any specific period would constitute a refusal of the offer, nor could it have reasonably known that it needed to respond promptly or risk that its insured would be subject to a judgment in excess of policy limits. The Supreme Court found that the insurer’s failure to promptly accept the offer was reasonable, as an ordinarily prudent insurer could not be expected to anticipate that the claimants would abruptly withdraw their offer.