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Pierce v. Banks: Time-Limited Demands and Mirror Image Acceptance


A Georgia Court of Appeals recently addressed the enforceability of a settlement agreement lacking “mirror image” acceptance. In a surprising decision, the court held that a binding pre-suit settlement did not exist where, in responding to a time-limited demand, the defendants did not match the demand’s terms exactly.

The parties in Pierce v. Banks, 2023 Ga. App. LEXIS 347 (Ga. Ct. App. June 28, 2023), were involved in a motor vehicle accident, after which the plaintiff’s counsel issued a time-limited demand (known in Georgia as a “Holt Demand,” “Statutory Demand,” or “9-11-67.1 demand”). Defense counsel’s written response that she was “authorized” to accept the demand was accompanied by a check from the insurer for the full amount, issued prior to the deadline set forth in the demand. The plaintiff then filed suit, claiming that the defendants failed to follow the demand’s instructions, and thus, there was no settlement. The defendant filed a motion to enforce settlement which was granted by the trial court. The plaintiff appealed and the Georgia Court of Appeals subsequently reversed the trial court decision.

There were four differences to note between the demand’s requirements and the defendants’ responses.

  1. Specific language of acceptance - defense counsel stated that she was “authorized” to accept the settlement, while the terms of the offer required the defense to “accept” the demand.
  2. Missing comma – the comma in plaintiff counsel’s law firm name was missing in the check.
  3. Date of payment – the demand required payment to be issued after 15 days and the insurer issued it sooner than 15 days.
  4. Payment expiration – the demand required that no additional conditions be placed on payment, and the check included a notation that it was “void after 180 days” (as do most standard bank checks).

Without addressing the first two discrepancies,1 the court explained that a settlement did not exist because of differences between the demand and the response. Georgia law allows for a demand payment date to be specified, as long as the payor is provided at least ten days from the time of written acceptance to make the payment. The plaintiff, therefore, was permitted to require a specific date for payment, and the insurer’s payment on another date (even an earlier one) did not constitute acceptance of the demand. Similarly, the court concluded that the insurer’s payment with a check including the “void after 180 days” notation did not constitute acceptance because it set an “expiration,” even though the insurer pointed out that the notation is standard on bank checks. The court also noted that the insurer could have used a different payment method without the notation to accept the demand.

The case has been accepted by the Georgia Supreme Court for review, but the ruling stands for now. We expect more gamesmanship from plaintiff attorneys with time-limited demands (especially in situations where the applicable limits are low or where the damages plausible exceed the policy limits) and will continue to monitor developments throughout the state.

Going forward, Georgia litigants and attorneys must meticulously adhere to settlement terms to ensure they are deemed enforceable. All claims handlers should be made aware of this development and exercise utmost caution and care when responding to these demands.

1 See Pierce, 2023 Ga. App. LEXIS 347, at n. 9(“[W]e need not address …  that counsel…  merely announced that a settlement was “authorized” rather than actually accepting the offer and that the missing comma invalidated the acceptance.).