Court of Appeals Reverses Award of Defense Legal Fees Following “Ambiguous” Settlement Offer

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In 2005, Georgia added what is now known as the “offer of settlement” rule to its personal injury law. This rule allows defendants to recover their legal fees even in cases where the plaintiff wins their case. Essentially, if the defendant offers to settle the case before trial, the plaintiff rejects that offer, and the jury returns a verdict that is less than 75% of the offer, the defendant can ask the judge for an award of fees.

CaseMetrix LLC v. Sherpa Web Studios

The offer of settlement rule only applies to tort claims. It does not apply to other types of civil lawsuits, such as breach of contract. And any settlement offer needs to be clear on this point.

A recent decision from the Georgia Court of Appeals, CaseMetrix LLC v. Sherpa Web Studios, explains why this is so. In this case, the plaintiff is a company that develops online databases. The defendant provided web hosting services for the plaintiff. The plaintiff alleged the defendant failed to properly backup or migrate one of its databases, causing the plaintiff to sustain more than $4 million in damages. The plaintiff’s lawsuit asserted both the tort of negligence and breach of contract claims.

Before the trial, the defendant offered to settle the case for $30,000. In one paragraph, the offer said it was “to resolve all pending claims … arising out of claims sounding in tort.” The next paragraph, however, said the offer was to “resolve all claims of Plaintiff.”

The plaintiff decided to reject the offer. The jury ultimately returned a verdict for the plaintiff, but awarded just $6,269 in damages on the tort claim. The jury further reduced that award by 46% to account for the plaintiff’s comparative fault, meaning the defendant was only liable for $3,385.26, which was obviously less than 75% of its original $30,000 settlement offer. (The jury awarded no damages on the plaintiff’s breach of contract claim.)

Based on the jury’s verdict, the trial judge awarded the defendants its attorney fees under the offer of settlement rule. The plaintiff appealed that award, arguing that the offer was “ambiguous as to the scope of the claims encompassed by it,” and therefore did not serve as a valid basis for invoking the rule. The Court of Appeals agreed and reversed the award of attorney fees.

As the appeals court explained, there was a clear “inconsistency” in the language of the defense’s settlement offer. More to the point, it was “ambiguous” as to whether the settlement was meant to cover all of the plaintiff’s allegations or just its tort claims. As noted above, the settlement of offer rule only applies to tort claims. The Court of Appeals clarified that a settlement offer “cannot be unclear or ambiguous as to the scope of claims to be resolved if the offer is accepted.” In other words, the defense was not entitled to recover its legal fees because its offer could be read as covering the plaintiff’s non-tort claims, which call outside the scope of the settlement rule.

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Frequently Asked Questions

Here are some of the most common questions people ask us about personal injury. We’re happy to answer your questions at your personalized consultation.
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Can any attorney handle a personal injury case?

Any attorney that is licensed in the jurisdiction where your case is can represent you. But a personal injury attorney has specialized experience and resources. They understand how a personal injury claim can be complex, and they can identify issues that are the most important to your case. At The Persons Firm, our entire practice is devoted to the needs of personal injury victims.

How long do I have to file a personal injury claim?

Most Georgia personal injury claims must be filed within two years of the accident. When a claim involves the government, the deadline is much shorter. You should never wait to contact a lawyer to start preparing your case.

How do you start a personal injury case?

You start a personal injury case by determining the grounds for compensation and who may be responsible to pay. Then, you prepare a summons and complaint, file it in the court with jurisdiction, and serve each defendant. Sometimes, you can negotiate a settlement directly with the insurance company. But direct negotiations don’t count as formally starting a personal injury case. While you negotiate, the deadline to start the case still applies.

What is a personal injury consultation?

A personal injury consultation is a conversation with a lawyer about your case. The consultation may cover whether you have a claim for personal injury compensation, what your claim may be worth and the strengths and weaknesses of the case. You will talk about how legal representation works. You’ll meet the legal team that would handle your case if you hire them.

What kind of lawyer do I need to sue for an injury?

A lawyer who handles injury lawsuits is a personal injury lawyer. You choose and hire the lawyer yourself. They represent your interests and file a legal claim on your behalf.

Do I have a good personal injury case?

To have a good personal injury case, you must have evidence to prove that someone else is legally at fault for causing your injuries. Usually, this is based on negligence, or their failure to exercise reasonable care and caution in a situation. It may also be based on recklessness or intentional harm. In addition, you must show what damages you have and what compensation you should receive.

How much compensation can I get for an injury case?

In Georgia, each case for personal injury compensation is valued individually. It depends on the defendant’s degree of fault and what damages you have. Damages may include economic and non-economic harm. Non-economic harm means pain and suffering, emotional anguish, disability and other intangible losses.

Will I have to testify in court for my personal injury case?

We understand the thought of going to court can cause anxiety. Most personal injury cases don’t require the victim to testify in court. As your lawyers, we’ll work to understand your goals. If called to testify, we’ll prepare with you and represent you in court. With our team of personal injury lawyers, you’ll always be supported and prepared.

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