On December 1, 2011, in Great West Casualty Company v. Bloomfield, a divided whole Court of Appeals affirmed the denial of Great West’s motion for attorney’s fees following a verdict in its favor in a wrongful death case arising out of a series of two automobile collisions, the first of which involved Great West’s insured truck driver. The Court of Appeals agreed that the trial court had discretion to deny an award of attorney’s fees to Great West in spite of the fact that Great West had made a $25,000 offer of settlement pursuant to the Georgia statute allowing for attorney’s fees to be awarded to the prevailing party after such an offer has been made (O.C.G.A. § 9-11-68). Based on this opinion, trial courts will now be encouraged to weigh in on whether such an offer was made in “good faith” in deciding whether to award attorney’s fees.
In June of 2006, Nola Bloomfield was fatality injured in an automobile accident. Her estate, through her husband, filed a lawsuit alleging that the accident was caused by the actions of two separate truck drivers and naming as defendants the drivers, the companies that owned the drivers’ trucks, and those companies’ liability insurers. One of the drivers, his trucking company, and that company’s insurer, Great West, made an offer of settlement pursuant to O.C.G.A. § 9-11-68 in the amount of $25,000 in June of 2007. The offer was rejected and the case went to trial. A jury returned a verdict of no liability as to Great West, the trucking company it insured, and its driver. The plaintiff received a judgment in excess of $10 M against the other driver, trucking company, and insurer.
Judge Patsy Porter of Fulton State Court denied the fee request made by Great West after the trial because she found that the $25,000 offer to settle was not made in good faith. Judge Porter noted that during the trial the same defendants had made an offer of $1M to settle.
If a party is entitled to recover attorney’s fees and expenses of litigation because a judgment meets the requirements of the offer of settlement statute “the court may determine that [a settlement] offer was not made in good faith.” In such case, the court may disallow an award of attorney’s fees and costs.
According to the Court of Appeals, the defense verdict alone was not sufficient to determine that Great West’s initial offer was made in good faith. If it were, according to the Court, the statute would simply stop after providing that the trial court “shall” award fees if the judgment meets the numerical requirements of the statute. Instead, the trial court is directed by the statute to determine whether or not the offer was made in good faith. The defense verdict is relevant to the issue of good faith but was not considered conclusive evidence that Great West acted in good faith.
The jury award of $10M supported the trial court’s decision on good faith because the damages awarded grossly exceeded the value of the offer. A sufficient possibility existed that a jury might return a large verdict against both truckers. Judge Porter believed that Great West was certainly aware of this possibility which is why it made a substantial offer during trial.
This opinion further weakens the offer of settlement statute. Now, in every case in which a defendant receives a verdict in its favor and seeks attorney’s fees, plaintiffs will argue that the settlement offer was unreasonable in light of the “potential” value of the case. Also, be aware that if a substantial offer is made subsequent to the offer of settlement, that higher offer will be used as evidence that the prior offer, if it is much less, was not made in good faith.
Let me know if you would like a copy of this opinion.