Georgia Court of Appeals Decision on Mirror-Image

Pierce v. Banks et al., No. A23A0394, 2023 WL 4227923 (Ga. Ct. App. June 28, 2023)

In Pierce, the Georgia Court of Appeals issued a decision regarding the enforceability of settlement agreements that do not achieve strict “mirror-image” acceptance. Appellant Aaron Pierce was involved in a car accident along with appellants Kyndyl Banks and Octavius ​​Avery Smith. After the accident, Pierce’s attorney submitted a written pretrial offer to the plaintiffs’ insurer, Trexis One Insurance Corporation. The offer letter provided that the complainant would settle all claims in exchange for a payment of $25,000 (personal injury limit) and that Trexis must accept the terms of the offer in writing within 31 days. The offer letter also states that any payment must be made to “Aaron Pierce and Brooks Injury Law, LLC” and that, as an act necessary to accept the offer, payment must be “received 15 days after written acceptance by Trexis.” Th[e] In addition, the offer letter also stipulated that the settlement payment and any other documents submitted by Trexis, as an action necessary to accept the offer, “shall not contain any terms, conditions, descriptions, expirations or limitations which are not expressly permitted.” on offer.

Days later, Trexis’ attorney responded by letter, noting that she had been “authorized” to accept the settlement offer. The letter was accompanied by a settlement check addressed to “Aaron Pierce and Brooks Injury Law LLC” and a restricted release. Importantly, the check contained the note that it was “void after 180 days.” Upon receipt of the check and clearance, Pierce’s attorney explained that Trexis’ purported acceptance was inconsistent with his offer and that Pierce rejected Trexis’ counteroffer. Shortly thereafter, Pierce filed suit, Trexis moved to enforce a settlement, and Pierce subsequently filed a motion for summary judgment asserting that no settlement existed. The Georgia court ruled in favor of Trexis, ultimately concluding that the company had complied with the material provisions of OCGA § 9-11-67.1 (2021).

The Georgia Court of Appeals reversed. First, the court pointed out that, although bilateral contracts allow the parties to enter into contracts by expressing their desire to bind each other, the type of contract in question – a unilateral contract – comes into existence when an offer requires acceptance through action rather than through commitment and as such can only be accepted through action. The court also noted that the execution of such an act must be “identical” and without “deviations of any kind.” Accordingly, the court rejected Trexis’s argument that, although Trexis did not strictly comply with the intangible terms of the agreement, it nevertheless complied with the material terms of the agreement and therefore the agreement must be enforced.

Second, the court held that there was nothing wrong with Pierce’s condition that payment of the settlement amounts be received on the 15th day following Trexis’ written acceptance of the offer. The court concluded that Georgia law allows the provider to require payment at a specific time, provided that the provider gives the recipient at least 10 days from the time of written acceptance to pay. Therefore, the fact that Trexis made payment before the 15th day after the written acceptance meant that Trexis had not complied with the terms of Pierce’s offer. Additionally, the court rejected Trexis’ arguments that allowing providers to designate specific days on which payment must be made would lead to absurd or unintended consequences, instead reaffirming its earlier finding that if a party fails to make payment in the manner specified, then the party did not accept the offer.

Finally, the court concluded that the inclusion of the notation on the settlement check indicating that the check would be void after 180 days also constituted an impermissible change in terms. Trexis argued that it caused the check to be issued and that it was not Trexis that attached the note, but rather its bank, which included the standard language for 180 days. Trexis also alleged that checks drawn in Georgia had an expiration date pursuant to OCGA § 11-4-404 and therefore a cashier’s check bearing such annotation was the same as a cashier’s check without such notice. Rejecting Trexis’s argument and invocation of the statute, the court held that OCGA § 11-4-404 does not require that checks expire 180 days after they are issued, but simply provides that a bank is not required to return them to redeem. Additionally, the court found that Trexis could have used a payment method other than Pierce, but chose a payment method that “could not have satisfied the terms of the offer.”

Having clarified the foregoing, the court reversed the decision of the trial court. In states that apply such standards, insurers must be very vigilant about the terms of a settlement offer. In particular, insurers must carefully analyze the terms offered, determine whether those terms are acceptable, and if so, carefully comply with the terms to ensure enforceable compensation.