Legislature Takes One other Shot at Dangerous Religion Declare “Set Ups”

The Georgia legislature just lately amended O.C.G.A. § Sept. 11-67.1, the statute that units forth necessities for pre-answer settlement calls for in motorized vehicle private damage circumstances, to mood use of such pre-answer settlement calls for to arrange dangerous religion failure-to-settle claims towards insurers. These pre-answer calls for are often known as Holt calls for primarily based on the Georgia Supreme Court docket case of S. Gen. Ins. Co. v. Holt, 262 Ga. 267, 416 S.E.2nd 274 (1992), which established that an insurer which fails to settle a declare for its insured—and is discovered to have performed so negligently, fraudulently, or in dangerous religion—could also be accountable for damages in extra of the insurance coverage coverage limits. Holt calls for usually come up in private damage motorized vehicle circumstances as a result of the injured plaintiffs search to beat low legal responsibility limits below an auto insurance coverage coverage. Plaintiffs’ attorneys impose in depth, intricate situations of their Holt demand with the aim of the insurers rejecting the demand, in order that plaintiffs can later pursue a nasty religion failure-to-settle declare towards the insurers. 

The legislature amended O.C.G.A. § Sept. 11-67.1 in 2021 in a earlier try to rein in the usage of overly complicated Holt calls for as dangerous religion setups. That modification required plaintiffs making a motorized vehicle private damage demand to determine particular materials classes of data and clarified the timing for such calls for. The prior modification didn’t cease the gamesmanship and misuse of Holt calls for by plaintiffs in private damage motorized vehicle circumstances, nonetheless, as a result of plaintiffs’ counsel adjusted their methods to account for the brand new guidelines. On the similar time, Georgia courts required strict compliance with the phrases of Holt calls for, typically leading to absurd outcomes. A number of examples embrace the next:

• Patrick v. Kingston, No. A23A1527, 2024 WL 566609 (Ga. Ct. App. Feb. 13, 2024): Commonplace language on examine printed by the financial institution—not the insurer—that the examine can be “VOID IF NOT PRESENTED WITHIN 90 DAYS” deemed a counteroffer.
• Simmons v. Bates, 366 Ga. App. 410 (2023): Holt demand was contingent on two insurers accepting. One insurer accepted; the opposite didn’t. The court docket held that no settlement was reached, although the court docket famous that the settlement supply “was 39 pages lengthy and contained 30 footnotes,” id., and expressed “. . . concern that this prolonged and unnecessarily convoluted supply seems to be deliberately tough to simply accept . . . .” Id. at 417. 
• Pierce v. Banks, 368 Ga. App. 496 (2023): Holt demand deemed rejected as a result of (1) protection counsel said that she was “licensed” to simply accept the settlement, whereas the phrases of the supply required the protection to “settle for” the demand; (2) the comma in plaintiff counsel’s regulation agency title was lacking within the examine; (3) the demand required fee to be issued after 15 days and the insurer issued it prior to 15 days; and (4) the demand required that no further situations be positioned on fee, and the examine included a notation that it was “void after 180 days” (as do most traditional financial institution checks).

The newly amended model of O.C.G.A. § Sept. 11-67.1 additionally contains a number of modifications that are designed to take one other stab at making pre-answer settlement calls for focus extra on the possible deserves of resolving the private damage declare and fewer on gamesmanship by savvy plaintiffs’ counsel. Examples embrace the next:

• Holt calls for at the moment are handled as a proposal to enter right into a bilateral contract.
• A Holt demand should nonetheless include particular materials phrases enumerated within the statute, however the amendments make clear that these are the one materials phrases to a Holt
• Variance from an immaterial time period in a Holt demand (as outlined within the amended statute) shall not topic the recipient to a nasty religion failure-to-settle declare.
• The date for supply of fee can’t be lower than 40 days from receipt of the supply.
• The amended statute applies to all presents “to settle a tort declare for private damage, bodily damage, or dying arising from a motorized vehicle collision,” and plaintiffs can not convey an motion for alleged failure to settle a tort declare for bodily damage or dying from a motorized vehicle collision until the Holt demand meets the situations of the amended statute.
• Importantly, the amended statute now applies to any supply to settle a tort declare for bodily damage or dying arising from a motorized vehicle collision “even the place such supply expressly supplies that all or any of [O.C.G.A. § 9-11-67.1] doesn’t apply to such supply.”

The newest spherical of modifications is unlikely to finish utterly the usage of Holt calls for to fabricate failure-to-settle claims towards insurers, simply because the previous amendments to O.C.G.A. § Sept. 11-67.1 have had restricted success. However the newest modification seems better-suited to mood misuse of Holt calls for than prior makes an attempt. Nonetheless, defendants and their counsel will wish to be sure that they’re responding appropriately to the “materials” phrases of any supply to settle a tort declare arising from a motorized vehicle collision to make sure the safety of the amended statute.

Lastly, policyholders ought to maintain abreast of the modifications in O.C.G.A. § Sept. 11-67.1 and Holt calls for although dangerous religion failure-to-settle claims usually implicate insurers. Particularly, policyholders with fronting insurance policies the place a self-insured or captive insurer retains the chance of loss. And policyholders with self‑insured retentions might face their very own obligations to answer Holt calls for earlier than they attain their “actual” insurance coverage limits. These policyholders ought to promptly assess any Holt calls for directed to them and guarantee compliance with the fabric phrases in the event that they intend to simply accept the demand. Extra essentially, nonetheless, all policyholders ought to attain out to their very own insurers when a Holt demand arises to make it possible for the insurers are treating the demand with applicable seriousness. Whereas it’s the insurer which may be on the hook for damages in extra of coverage limits, the policyholder may face sudden damages or public relations points if a private damage declare settlement that the policyholder anticipated to proceed falls via for technical causes. Insurance coverage protection counsel may help navigate what has confirmed to be an advanced and unsure a part of pre-answer observe for private damage motorized vehicle circumstances in Georgia.