Court of Appeals Lends Support to Offers of Settlement Pursuant to O.C.G.A. § 9-11-68

In 2014, Tony Gentry, Miguel Love, and Lakyndria Love (collectively, “the plaintiffs”) sued Ramesh Shaha (“Shaha”) for injuries sustained in an automobile collision. Shaha v. Gentry, 359 Ga.App. 613 (2021). The plaintiffs each submitted an offer of settlement to Shaha proposing to dismiss the action with prejudice in exchange for payment of $16,666.67 each, or $50,000.01 in total. Shaha rejected the plaintiffs’ offers. In May 2017, following a trial, the jury returned a verdict for the plaintiffs and awarded monetary damages totaling $78,000. In return, as Shaha had previously rejected their offers of settlement, the plaintiffs sought attorney's fees and litigation expenses pursuant to O.C.G.A. § 9-11-68. The plaintiffs’ motion was granted, and they were awarded attorney's fees and costs totaling $21,012. Shaha then appealed the trial court’s ruling.

The purpose of O.C.G.A. § 9-11-68, the “offer of settlement” statute, is to encourage litigants in tort actions “to make and accept good faith settlement proposals in order to avoid unnecessary litigation,” which in turn supports Georgia's policy of “encouraging negotiations and settlements.” The standard of review as to whether a settlement offer was made in good faith or bad is for abuse of discretion. An award of attorney's fees must be determined upon evidence of the reasonable value of the professional services which underlie the claim for attorney's fees.

As it relates to Shaha’s appeal, the plaintiffs presented offers to settle to Shaha for $50,000 ($16,666 each) and were awarded a final judgment of $78,000. Because the final judgment exceeded 125 percent of the plaintiffs’ offer, as a threshold matter, they satisfied a condition precedent contained in O.C.G.A. § 9-11-68. Additionally, the plaintiffs presented affidavits detailing 75 hours spent by their counsel on the case between the rejection of their offers and the entry of judgment, which resulted in $20,550 in attorney's fees. The Court of Appeals held that the plaintiffs’ offers of settlement bore a reasonable relationship to the plaintiffs’ approximate medical costs and the insurance policy limit. The Court of Appeals also found that Shaha did not produce sufficient evidence to demonstrate that the plaintiffs lacked the intent to settle. Therefore, the Court of Appeals held that the trial court did not abuse its discretion and affirmed its ruling. This case is an important reminder of the value and strategy of presenting settlement offers pursuant to O.C.G.A. § 9-11-68, which the Court of Appeals may support.