FIFTH DIVISION
MCFADDEN, P. J.,
BRANCH and BETHEL, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
November 2, 2017
In the Court of Appeals of Georgia
A17A0735. HUGHES v. FIRST ACCEPTANCE INSURANCE McF-034
COMPANY OF GEORGIA, INC.
MCFADDEN, Presiding Judge.
This case involves allegations that the defendant insurer is liable for failing to
settle an insurance claim. The trial court denied summary judgment to the plaintiff
and granted summary judgment to the defendant on all claims, including those for
attorney fees and punitive damages. There are genuine issues of material fact as to the
failure-to-settle claim, so the trial court correctly denied summary judgment to the
plaintiff, but erroneously granted summary judgment to the defendant. But because
the plaintiff has pointed to no evidence of bad faith or wilful or wanton conduct
which would support the claims for attorney fees and punitive damages, the trial court
properly granted summary judgment on those claims. So we affirm in part and reverse
in part.
1. Facts and procedural posture.
Summary judgment is proper if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any, 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. We review the grant or denial of a motion for summary judgment
de novo, and we must view the evidence, and all reasonable inferences
drawn therefrom, in the light most favorable to the nonmovant.
Johnson Street Properties v. Clure, ___ Ga. ___ (1) (___ SE2d ___) (Case Nos.
S17A0811, S17X0812, decided September 13, 2017) (citations and punctuation
omitted).
So viewed, the evidence shows that on August 29, 2008, Ronald Jackson
caused a five-vehicle collision that resulted in his death and injured others, including
Julie An and her minor child, Jina Hong, who sustained a traumatic brain injury.
Jackson was insured by First Acceptance Insurance Company of Georgia, Inc. The
liability limits of that policy are $25,000 per person and $50,000 per accident. On
September 10, 2008, counsel for An and Hong contacted First Acceptance and stated,
in part, that he looked forward to working with the insurer to resolve the matter and
that he would forward a settlement demand when his clients had finished treatment
2
for their injuries. Thereafter, on January 15, 2009, counsel for First Acceptance sent
a letter to attorneys for all of the injured parties, including counsel for An and Hong,
seeking to schedule a settlement conference with all parties. On February 2, 2009,
counsel for First Acceptance sent another letter to all of the parties requesting
participation in a settlement conference.
On June 2, 2009, the attorney for An and Hong sent two letters by facsimile to
the attorney for First Acceptance. Forty-one days later, counsel for An and Hong
would assert that those two June 2, 2009 letters had constituted an offer to settle their
claims and had set a 30-day deadline for a response. The first faxed letter of June 2,
2009, acknowledged the earlier communication from First Acceptance’s counsel
expressing the company’s interest in arranging a settlement conference and stated that
An and Hong were “interested in having their claims resolved within your insured’s
policy limits, and in attending a settlement conference[.]” The first letter then
expressly referenced the attached second letter, stating “I have attached my letter of
representation and insurance information request for your use.” The first letter also
informed First Acceptance that An and Hong had uninsured/underinsured motorist
(“UM”) coverage in the amounts of $100,000 per person and $300,000 per accident.
The first letter then provided:
3
Of course, the exact amount of UM benefits available to my clients
depends upon the amount paid to them from the available liability
coverage. Once that is determined, a release of your insured from all
personal liability except to the extent other insurance coverage is
available will be necessary in order to preserve my clients’ rights to
recover under the UM coverage and any other insurance policies. In fact,
if you would rather settle within your insured’s policy limits now, you
can do that by providing that release document with all the insurance
information as requested in the attached, along with your insured’s
available bodily injury liability insurance proceeds.
The second letter of June 2, 2009, as expressly referenced by the first letter,
requested that First Acceptance provide the insurance information within 30 days,
including a corporate officer’s statement under oath concerning policy and coverage
details and a copy of each known policy. That second letter further stated that “[a]ny
settlement will be conditioned upon [the] receipt of all the requested insurance
information.”
Counsel for First Acceptance received and reviewed the faxed letters from An
and Hong’s attorney. On July 10, 2009, counsel for An and Hong filed a personal
injury action against the estate of Jackson. On July 13, 2009, counsel for An and
Hong sent another letter by facsimile to counsel for First Acceptance, stating that the
offer to settle in the June 2, 2009 letters was withdrawn.
I have not heard from you in response to my letter dated June 2, 2009,
when I wrote to you about my clients’ interest in resolving their claims
4
within the policy limits of First Acceptance’s insured. As you know
from my letter, my clients offered to release the insured from all
personal liability if I received within 30 days: 1) the described release,
2) a check for the available bodily injury liability insurance proceeds,
and 3) the requested insurance information. . . . It has now been 41 days
since my letter, and I have received nothing from you or First
Acceptance. . . . Under the circumstances, my clients authorized me to
file a lawsuit on their behalf. . . . Please advise your client that the offer
to settle my clients’ claims has been revoked and we will move forward
with litigation.
On July 17, 2009, counsel for First Acceptance sent a letter by facsimile to
First Acceptance, stating that the June 2, 2009 letters from counsel for An and Hong
“had been inadvertently placed with some medical records and no follow-up had
occurred.” On July 20, 2009, counsel for First Acceptance responded to counsel for
An and Hong, informing him that a settlement conference with all potential claimants
would be scheduled within two weeks. On July 30, 2009, counsel for First
Acceptance sent notice to the parties that a settlement conference had been scheduled
for September 1, 2009. Counsel for An and Hong did not participate in the settlement
conference.
On January 18, 2010, First Acceptance offered to settle Hong’s claims for
$25,000, but counsel for Hong rejected the offer. First Acceptance later offered to
settle both An and Hong’s claims for $50,000, but counsel for An and Hong rejected
5
that offer on October 1, 2010. The lawsuit then proceeded to a jury trial in July 2012,
after which final judgment was entered in favor of An and Hong, including an award
of $5,334,220 for Hong’s injuries.
In June 2014, Robert Hughes, as administrator of Jackson’s estate, filed the
instant action against First Acceptance, claiming that First Acceptance had
negligently or in bad faith failed to settle Hong’s insurance claim. The complaint
alleged that First Acceptance had tendered only $25,000 as payment toward the Hong
judgment and thus sought to recover the unpaid portion of the judgment in the amount
of $5,309,225. The complaint also sought punitive damages and attorney fees. The
parties filed opposing motions for summary judgment. After a hearing, the trial court
denied Hughes’ motion, but granted summary judgment to First Acceptance on all of
Hughes’ claims. Hughes appeals.
2. Grant of summary judgment to defendant.
Hughes asserts that the trial court erred in granting summary judgment to First
Acceptance on the claims for failure to settle, punitive damages, and attorney fees.
We agree as to the failure to settle claim, but disagree as to the punitive damages and
attorney fees claims.
(a) Negligent or bad faith failure to settle.
6
“An insurance company may be liable for the excess judgment entered against
its insured based on the insurer’s bad faith or negligent refusal to settle a personal
claim within the policy limits.” Cotton States Mut. Ins. Co. v. Brightman, 276 Ga.
683, 684 (1) (580 SE2d 519) (2003) (citation omitted). “In deciding whether to settle
a claim within the policy limits, the insurance company must give equal consideration
to the interests of the insured.” Southern General Ins. Co. v. Holt, 262 Ga. 267, 268
(1) (416 SE2d 274) (1992) (citation omitted). “Judged by the standard of the
ordinarily prudent insurer, the insurer is negligent in failing to settle if the ordinarily
prudent insurer would consider choosing to try the case created an unreasonable risk.”
Cotton States, supra at 685 (1) (citation omitted). As for bad faith, “the general rule
[is] that the issue of an insurer’s bad faith depends on whether the insurance company
acted reasonably in responding to a settlement offer.” Id. (citation omitted). But
whether the basis for imposing tort liability on the insurer is phrased in
terms of bad faith or negligence, an insurer may be liable for damages
for failing to settle for the policy limits if, but only if, such ordinarily
prudent insurer would consider that choosing to try the case rather than
accept an offer to settle within the policy limits would be taking an
unreasonable risk that the insured would be subjected to a judgment in
excess of the policy limits. This is generally a jury issue requiring
consideration of all the relevant circumstances including the insurer’s
knowledge of facts relevant to liability and damages on the claim; the
insurer’s diligence in conducting a reasonable investigation to discover
7
the relevant facts; and the terms of the settlement offer and any response
by the insurer.
Baker v. Huff, 323 Ga. App. 357, 363-364 (1) (a) (747 SE2d 1) (2013) (citations and
punctuation omitted).
In the instant case, we first note that “[i]t is well settled that notice to an
attorney is notice to the client employing him, and that knowledge of an attorney is
knowledge of his client.” Kahn v. Britt, 330 Ga. App. 377, 381 (2) (b) (765 SE2d
446) (2014) (citation omitted). Thus, First Acceptance had knowledge of the June 2,
2009 letters from counsel for An and Hong through its own attorney’s knowledge of
those letters. It is apparent from a review of those letters that they, at the very least,
create genuine issues of material fact as to whether Hong offered to settle her claims
within the insured’s policy limits and to release the insured from further liability, and
whether the offer included a 30-day deadline for a response. Likewise, it is clear from
a review of the record that there also exist genuine issues of material fact as to
whether First Acceptance acted reasonably in responding to any such offer. “An
insurer must act reasonably in responding to a settlement offer, bearing in mind that,
in deciding whether to settle, the insurer must give the insured’s interests in avoiding
liability for a judgment in excess of the policy limits the same consideration that it
8
gives its own interests in paying less than the policy limits.” Baker, supra at 363 (1)
(a) (citation and punctuation omitted).
In granting summary judgment to First Acceptance on the failure to settle
claim, the trial court concluded that because Hong was not the only potential claimant
injured in the accident, “summary judgment [was] appropriate because there is no
evidence of record the insurer knew or reasonably should have known the complex
claims against Mr. Jackson could have been settled within the available policy
limits.” However, the trial court’s focus on whether or not First Acceptance knew that
all of the potential claims against Jackson could have been settled within the policy
limits was misplaced since “a liability insurer may, in good faith and without
notification to others, settle part of multiple claims against its insured even though
such settlements deplete or exhaust the policy limits so that remaining claimants have
no recourse against the insurer.” Miller v. Ga. Interlocal Risk Mgmt. Agency, 232 Ga.
App. 231 (1) (501 SE2d 589) (1998) (citation and punctuation omitted). Thus, there
exist genuine issues of material fact as to whether First Acceptance could have settled
only Hong’s claim within the purported 30-day time limit set by the settlement offer.
The possibility of settling other claims within the policy limits and the insurer’s
knowledge of such possibility are not dispositive of the failure to settle claim in this
9
case. Rather, those are simply other factors that a jury could consider in determining
the ultimate question of whether First Acceptance acted reasonably in response to any
offer from Hong to settle within the policy limits as “judged by the standard of the
ordinarily prudent insurer.” Fortner v. Grange Mut. Ins. Co., 286 Ga. 189, 190 (686
SE2d 93) (2009) (citation and punctuation omitted). “The jury generally must decide
whether the insurer, in view of the existing circumstances, has accorded the insured
the same faithful consideration it gives its own interest.” Southern General, supra at
268-269 (1) (citation and punctuation omitted). Because the circumstances in this
case create genuine issues of material fact, the trial court erred in granting summary
judgment on this claim.
(b) Punitive damages and attorney fees.
The trial court granted summary judgment on the punitive damages and
attorney fees claims on the basis that such claims were derivative of the underlying
failure to settle claim and they therefore could not survive after the grant of summary
judgment on that underlying claim. See Johnson v. Johnson, 323 Ga. App. 836, 842
(747 SE2d 518) (2013). However, given our reversal of the grant of summary
judgment on the underlying failure to settle claim, the trial court’s basis for granting
summary judgment on the punitive damages and attorney fees claims no longer exists.
10
Summary judgment on those issues is nevertheless warranted. “We will affirm
the grant of summary judgment if it is right for any reason.” Rabun v. Rabun, 341 Ga.
App. 878, 880 (802 SE2d 296) (2017) (citation omitted). Under OCGA § 13-6-11,
attorney fees are available where the defendant has acted in bad faith. And under
OCGA § 51-12-5.1 (b), “[p]unitive damages may be awarded only in such tort actions
in which it is proven by clear and convincing evidence that the defendant’s actions
showed willful misconduct, malice, fraud, wantonness, oppression, or that entire want
of care which would raise the presumption of conscious indifference to
consequences.” Generally, such questions of bad faith supporting an award of
attorney fees and wilful or wanton conduct supporting an award of punitive damages
are matters for a jury’s consideration. See Weller v. Blake, 315 Ga. App. 214, 220 (3)
(b) (726 SE2d 698) (2012); Keith v. Beard, 219 Ga. App. 190, 195 (3) (464 SE2d
633) (1995). However, the trial court may grant summary judgment where there is no
evidence to support such claims. See Layer v. Clipper Petroleum, 319 Ga. App. 410,
420 (7) (735 SE2d 65) (2012); Howard v. Alamo Corp., 216 Ga. App. 525 (455 SE2d
308) (1995).
Here, although Hughes’ enumeration of error references the granting of
summary judgment on the claims of attorney fees and punitive damages, he has not
11
made any argument, cited any legal authority, or pointed to any evidence concerning
the attorney fees claim. Accordingly, to the extent that enumeration of error relates
to the summary judgment ruling on attorney fees, it is deemed abandoned. See Court
of Appeals Rule 25 (c) (2); Murphy v. Freeman, 337 Ga. App. 221, 223-24 (1) (787
SE2d 755) (2016) (enumeration of error which is not supported in the brief by citation
of authority or argument may be deemed abandoned); EZ Green Assocs. v.
Georgia-Pacific Corp., 331 Ga. App. 183, 190 (3) (770 SE2d 273) (2015).
Hughes’ sole argument in support of this enumeration of error pertains to the
summary judgment ruling on the punitive damages claims. That argument cites no
evidence in the record and instead relies on the conclusory statement that a fact-finder
could conclude that the insurer acted with conscious indifference to the
consequences. First Acceptance has discharged its burden on summary judgment of
pointing to the absence of any evidence of the type of wilful or wanton conduct which
would support a claim of punitive damages; however, Hughes has failed to carry his
burden of then pointing to specific evidence in the record giving rise to a triable issue
on this claim. See Cowart v. Widener, 287 Ga. 622, 623 (1) (a) (697 SE2d 779)
(2010). Because Hughes has failed to point to specific evidence supporting his claim
for punitive damages, we must affirm the trial court’s summary judgment ruling on
12
that claim. See Howard, supra (under OCGA § 51-12-5.1(b), something more than
the mere commission of a tort is required for the imposition of punitive damages and
mere negligence will not authorize the recovery of punitive damages).
3. Denial of summary judgment to plaintiff.
Hughes argues that the trial court erred in denying his motion for summary
judgment on the failure to settle claim because First Acceptance’s failure to respond
to the June 2, 2009 letters entitles Hughes to judgment as a matter of law. The
argument is without merit.
In support of his argument, Hughes relies on Southern General, supra at 269
(1) in which the Supreme Court stated:
We reject [the insurer’s] argument that an insurance company has no
duty to its insured to respond to a deadline to settle a claim within policy
limits when the company has knowledge of clear liability and special
damages exceeding the policy limits. Rather, the issue is whether all the
facts show sufficient evidence to withstand an insurance company’s
motion for directed verdict and permit a jury to determine whether the
insurer acted unreasonably in declining to accept a time-limited
settlement offer.
(Emphasis in original). Contrary to Hughes’ argument, the emphasized language
above does not mandate that he is entitled to judgment as a matter of law; rather, the
entirety of the Court’s language reiterates that the controlling issue is whether all of
13
the evidence creates a jury question as to whether the insurer acted reasonably in
rejecting a time-limited settlement offer. Moreover, in Southern General, the
Supreme Court expressly provided:
An insurance company does not act in bad faith solely because it fails
to accept a settlement offer within the deadline set by the injured
person’s attorney. . . . Nothing in this decision is intended to lay down
a rule of law that would mean that a plaintiff’s attorney under similar
circumstances could set up an insurer for an excess judgment merely by
offering to settle within the policy limits and by imposing an
unreasonably short time within which the offer would remain open.
Southern General, supra (citation omitted).
In the instant case, as previously discussed, the evidence of record creates
genuine issues of material fact as to whether there was a time-limited settlement offer
and whether First Acceptance acted reasonably in responding to any such offer as
judged under the standard of the ordinarily prudent insurer. Accordingly, the trial
court correctly denied summary judgment to Hughes on his failure to settle claim.
Judgment affirmed in part and reversed in part. Branch and Bethel, JJ.,
concur.
14