The Georgia Court of Appeals recently issued an opinion limiting the use of "onerous" time-limited policy limits demands. In Anderson v. Jones,1 the Court held that an insurer must have at least 30 days to respond to such a demand, including conditions of acceptance. That ruling is an important victory for insurers and a blow to plaintiffs' lawyers.
In Georgia, time-limited policy limits demands – often called "Holt" demands2 – regarding bodily injury claims arising from auto accidents are governed by O.C.G.A. § 9-11-67.1, enacted in 2021. Critically, such Holt demands must include 30 days for the insurer to respond. Prior to the enactment of the statute, plaintiffs' lawyers often attempted to orchestrate bad faith claims against insurers by serving "onerous" demands designed to be difficult to accept, riddled with confusing, complicated terms and conditions, or with conditions of acceptance that were difficult to meet. That way, even where an insurer attempted to accept the demand, plaintiffs' counsel would argue the demand had been rejected or that the insurer's "acceptance" was in fact a "counteroffer," allowing the plaintiff to proceed to litigation and, eventually, for a bad faith claim to potentially open the governing policy's limits.
However, at least some respite has arrived for insurers in the Court of Appeals' construction of O.C.G.A. § 9-11-67.1. In Anderson, Marilyn Jones was injured in an auto accident with Marc Anderson—who was driving while intoxicated—and Jones then made a time-limited offer of settlement to Anderson's insurance carrier. One of the conditions of acceptance required that the insurance carrier provide a declarations page within three days of the demand being made. Within 30 days of receiving the offer, the carrier later sent a letter accepting Jones' demand. But, Jones argued that Anderson rejected her offer because the declarations page had not been sent within three days, and Jones brought suit. The insurer filed a motion to enforce the settlement.
The Georgia Court of Appeals found that under the plain language of O.C.G.A. § 9-11-67.1(a), the minimum amount of time which an offeror may demand acceptance is 30 days and that this time period applies to "any other condition of acceptance." Thus, Jones' three-day deadline was held unenforceable.
The Court's ruling in Anderson should prevent plaintiffs' lawyers from including any conditions of acceptance that must be performed prior to the 30-day deadline for acceptance of the demand, at least for bodily injury claims arising out of the use of a car. This is a significant victory for insurers because it reduces the tools available to plaintiffs' lawyers to fabricate bad faith claims via onerous Holt demands.
If you would like to speak to an attorney about a Holt demand, a bad faith claim, or other matter, or if you have questions about the content of this update, please contact Seslee Smith, Ryan Burke, or a member of our Litigation group.
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