Check Terms Can Alter Unequivocal Settlement Agreement Terms

The Court of Appeals of Georgia has found a settlement agreement lacking in the essentials of contract formation where an offeree unequivocally accepts the terms of settlement by offeror but issued a payment check that stated on its face "VOID IF NOT PRESENTED WITHIN 90 DAYS." Patrick v. Kingston, A23A1527, 2024 Ga. App. Lexis 53 (2024). While the case deals specifically with OCGA § 9-11-67.1, the analysis is rooted in basic contract formation. Businesses and individuals should assume the holding from this case applies to any settlement, whether related to a personal injury or otherwise.

In Patrick, the plaintiff proposed terms for an offer of compromise to the defendant insurance company, which "was conditioned on being accepted unequivocally and without variance of any sort." Id. at 3 (internal citations omitted). The insurance company then sent a response letter to Plaintiff's counsel "noting that it was unconditionally, unequivocally and without variance accepting the terms and conditions of your offer of settlement. . . [and] would send the payment and release to your office within the time period set forth in your offer of settlement." Id. at 8. The insurance company did promptly and timely tender that check, however, on its face, the check stated: "VOID IF NOT PRESENTED WITHIN 90 DAYS." Id. at *12-13.

In Georgia, when "the recipient of a pre-suit offer fails to perform the act required to accept the offer, then the parties do not have a meeting of the minds." Pierce v. Banks, 368 Ga. App. 496, 502 (2023).(internal quotations omitted). Further, a "purported acceptance of an offer that varies even one term of the original offer is a counteroffer." Pritchard v. Mendoza, 357 Ga. App. 283, 288 (2020). Ultimately, because of this strict adherence to contract formation, the Court of Appeals found there was no formation of a settlement agreement because of the additional term on the face of the check. Patrick, 2024 Ga. App. Lexis 53, *15.

This case should come as a practice tip for all attorneys. In the Pierce case, the Court of Appeals specifically noted that a party has many payment options, with checks only being one. Pierce, 368 Ga. App. at 502. Therefore, when paying settlement funds a write transfer may still be the best option. Otherwise, the Patrick case will require that you confirm there are no additional terms on the face of the check.

COA Reviews Alternative Service on LLC's Registered Agent/Office

The Georgia Civil Practice Act allows for service of an entity via its registered agent. O.C.G.A. § 9-11-4 (e) (1). However, there are times when alternative service methods are needed because the registered agent cannot be found at the registered office. Georgia law provides for several means to do so. The Court of Appeals case Williams v. Abebe Sandy Ventures, LLC, 2023 WL 2201636, A22A1200 (Ga. Ct. App. Feb. 24, 2023) provides a practice tip for litigators that even under § 9-11-4, which as discussed below does not have a diligence standard, some standard of diligence must be performed before serving the secretary of state where the registered office is different from a second business address.

First, the Georgia “Civil Practice Act [of which OCGA § 9-11-4 (e) (1) is a part] and the Georgia Business Corporation Code [of which OCGA § 14-2-504 (b) is a part] provide alternative methods for obtaining substituted service of process in lieu of personal service on corporate officers or agents.” Daly's Driving School v. Scott, 238 Ga. App. 443, 445, 519 S.E.2d 1 (1999); See Ticor Constr. Co. v. Brown, 255 Ga. 547, 549 (3), 340 S.E.2d 923 (1986) (per curiam) (reiterating that “the methods of service set out in the Civil Practice Act, OCGA § 9-11-1 et seq., and the Georgia Business Corporation Code, OCGA § 14-2-1 et seq., are discrete methods of service upon corporations,” and that “a plaintiff may serve a defendant corporation by following the directions of the Civil Practice Act or by following the directions of the Georgia Business Corporation Code”) (emphasis supplied), quoting Bricks v. Walker Showcase, 255 Ga. 122, 123-124, 336 S.E.2d 37 (1985); O'Neal Constr. Co. v. Lexington Developers, 240 Ga. 376, 378, 240 S.E.2d 856 (1977) (discerning that “[the substitute service of process] provision in the Corporation Code is designed to be cumulative with the [Civil Practice Act]”). Indeed, the General Assembly has been clear. O.C.G.A. § 9-11-4 includes the instructive provision that:

The methods of service provided in this Code section are cumulative and may be utilized with, after, or independently of other methods of service. Whenever a statute provides for another method of service, service may be made under the circumstances and in the manner prescribed by the statute or under any other methods prescribed in this Code section.

Appellee argued at the trial court level that reading §§ 9-11-4 and 14-11-209 together required that substitute service on the Secretary of State cannot be made until a diligent effort is made to serve the other parties allowed to be served under O.C.G.A. § 9-11-4 (e) (1). Id. at *1. Further, Appellee pointed out that there was no indication that any investigative efforts were undertaken and only one attempt was made at the registered office, therefore, there could be no diligence sufficient for service. Id. The trial court agreed with Appellee's tandem reading of the statutes, which led to the appeal. Id. at *2.

Beginning with § 9-11-4 (e) (1), the Court of Appeals noted that the statute contained service via the secretary of state under an "any reason" standard. Specifically, that statute states:

Service shall be made by delivering a copy of the summons attached to a copy of the complaint as follows: If the action is against a corporation incorporated or domesticated under the laws of this state or a foreign corporation authorized to transact business in this state, to the president or other officer of such corporation or foreign corporation, a managing agent thereof, or a registered agent thereof, provided that when for any reason service cannot be had in such manner, the Secretary of State shall be an agent of such corporation or foreign corporation upon whom any process, notice, or demand may be served. (emphasis in original).

In addition to O.C.G.A. § 9-11-4 (e) (1), O.C.G.A. § 14-11-209 (f) provides:

Whenever a limited liability company shall fail to appoint or maintain a registered agent in this state or whenever its registered agent cannot with reasonable diligence be found at the registered office, then the Secretary of State shall be an agent of such limited liability company upon whom any process, notice, or demand may be served.... (emphasis added).

Lastly, there is a third statute that allows for alterative service. O.C.G.A. § 14-2-504 states:

If a corporation has no registered agent or the agent cannot with reasonable diligence be served, the corporation may be served by registered or certified mail or statutory overnight delivery, return receipt requested, addressed to the secretary of the corporation at its principal office.” (emphasis added).

The Court of Appeals noted that § 9-11-4 (e) (1) neither contains a due diligence nor a reasonable diligence standard. Further, the Court of Appeals rejected support offered under Brock Built City Neighborhoods, LLC v. Century Fire Protection, 295 Ga. App. 205, 671 S.E.2d 240 (2008), and Stone Exchange v. Surface Tech. Corp., 269 Ga. App. 770, 773, 605 S.E.2d 404 (2004). Those two cases both rejected service on the secretary of state under § 9-11-4 (e) (1), however, as the Court of Appeals distinguished, both plaintiffs in those cases "had actual knowledge of the defendants' current business addresses, yet unsuccessfully attempted to serve the defendants through their registered agent at the different address listed for the agents at the secretary of states office." Abebe Sandy Ventures, LLC, 2023 WL 2201636 at * 4. Neither Plaintiff ever attempting service at the actual business location address. Id. In the Adebe Sandy Ventures amtter, the Court of Appeals pointed out that there was no second address. Id. Therefore, no further attempt could have been had, thus rendering the "for any reason" language in § 9-11-4 (e) (1) to be applicable to this service situation. Thus, the Court of Appeals reversed and remanded the matter.

Practice Tip: Object to Jury Charge at Charge Conference and When Jury Returns the Verdict

The form of a verdict and the submission of a special verdict are within the discretion of the trial court, and, absent an abuse of that discretion, the court's choice will not be overturned. R. C. Acres, Inc. v. Cambridge Faire Properties, LLC, 331 Ga. App. 762, 764 (1), 771 S.E.2d 444 (2015); see OCGA § 9-11-49. As a general rule, “in all civil cases, no party may complain of the giving or the failure to give an instruction to the jury unless he objects thereto before the jury returns its verdict, stating distinctly the matter to which he objects and the grounds of his objection.” OCGA § 5-5-24 (a). However, a court “shall consider and review erroneous charges where there has been a substantial error in the charge which was harmful as a matter of law[.]” OCGA § 5-5-24 (c).

A party must voice his “objection to a verdict form at the time of its rendition or otherwise such technicality is waived. This is so because a verdict may be reformed or remodeled in the presence of the jury before they have retired from the box.” Torres v. Tandy Corp., 264 Ga. App. 686, 690 (3), 592 S.E.2d 111 (2003).

Recently, the Court of Appeals held that the claim of error on the submission of a jury charge is waived where a party objected at the charge conference to the verdict form as "confusing" and "drawing a finger" at him because it did not distinguish between breach of contract claims against him and against a distinct corporate entity but did not make an objection when the jury returned the verdict. Choi v. Sierra Construction Company, Inc., A22A1057, 2022 WL 12242332, *2 (Ga. Ct. App. Oct. 21, 2022).

However, the Court of Appeals did not stop at this inquiry. Instead, the Court examined the appeal under a different substantial error standard, which allowed for a reversal and a new trial in this case despite the failure of the second objection at the return of the jury verdict. Id. at *5.

It is the duty of the trial court, whether requested or not, to give the jury appropriate instructions on every substantial and vital issue presented by the evidence, and on every theory of the case. There need be only slight evidence supporting the theory of the charge to authorize a requested jury instruction. Game Truck Ga. v. Quezada, 360 Ga. App. 519, 520 (1), 859 S.E.2d 125 (2021) (citations and punctuation omitted). When a court decided whether a jury instruction should have been given, the court does not allocate inferences and presumptions but merely examines the record to see if evidence was presented which created a substantial, material, and controlling issue in the case. Golden Peanut Co. v. Bass, 249 Ga. App. 224, 227 (1), 547 S.E.2d 637 (2001) (citation omitted), aff'd, 275 Ga. 145, 563 S.E.2d 116 (2002). The test for whether such an issue was created is whether the evidence, if believed by a jury in accordance with the disputed jury instruction, would have affected the outcome. Id.

Importantly, “[t]he failure to charge on a properly asserted and legally cognizable theory of recovery or defense, whether requested or not, or attention be called to it or not, is harmful as a matter of law.” Game Truck Ga., 360 Ga. App. at 520 (1), 859 S.E.2d 125 (citation and punctuation omitted). Accordingly, the Court reviewed the charge for substantial error pursuant to OCGA 5-5-24(c):

A charge constituting substantial error is one that is harmful as a matter of law — i.e., blatantly apparent and prejudicial to the extent it raises the question of whether the losing party has, to some extent at least, been deprived of a fair trial because of it, or a gross injustice is about to result or has resulted directly attributable to the alleged errors.

Given this high bar, instances of reversal under OCGA § 5-5-24 (c) are “very, very rare.” Maki v. Real Estate Expert Advisors, 358 Ga. App. 337, 340-41 (1), 855 S.E.2d 72 (2021) (punctuation and footnote omitted).

As a result of this inquiry, the Court found that the charge did not distinguish that joint venture liability rests upon conduct in furtherance of the joint venture and an individual and entity cannot be liable without such a finding. Choi, 2022 WL 12242332 at *5. Ultimately, the failure to object at the return of the verdict did not matter here because the charge constituted a substantial error, however, this heightened standard only applied because of the failure to object a second time.