I Beat the Offer of Judgment and/or Policy Limits. What Now?


I Beat the Offer of Judgment and/or Policy Limits. What Now?


There are few thrills (at least in law practice) like securing a jury verdict for a deserving client. To see months or years of hard work culminate in a jury’s affirmation is a great reward. Even more so when the defense insurance company undervalued the case or refused policy limits demands to settle. When the dust settles on such a verdict, however, the job is not done. Particularly where the verdict triggers a statutory “offer of settlement” or exceeds policy limits, the question turns to collection: how to maximize the client’s ultimate net result. Maximizing recovery requires foresight and planning from the very earliest stages of a case. What follows are some legal and practical considerations, supported by real-world examples.


An insurance company may be liable for the excess judgment entered against its insured based on the insurer’s bad faith or negligent refusal to settle a claim within the policy limits.1 In S. Gen. Ins. Co. v. Holt, the Supreme Court of Georgia held that an insurance company has a duty to its insured to act reasonably in responding to a plaintiff’s offer to settle a claim within policy limits when the insurer had knowledge of clear liability and special damages exceeding the policy limits.2 Thus, a plaintiff’s time-limited settlement offer, often referred to as a “Holt Demand,” is the foundation of a bad faith claim under Georgia law. Be sure to carefully comply with O.C.G.A. § 9-11-67.1 in pre-suit demands. While the statute on its face only applies to automobile injury claims, in my view the better practice is to comply with its terms in all pre-suit demands. The prospect of exposure in excess of policy limits is an incredibly important doctrine to make insurance companies treat their insureds properly and for the efficiency of the justice system by forcing prompt settlement where appropriate. We do well to keep in mind that insurance companies look for examples of plaintiff lawyers engaging in gamesmanship and ‘gotcha’ demand terms to justify a decision. We should collectively be vigilant not to give the insurance companies examples. Not only do clear and reasonable demands give better assurance of collecting that big verdict down the road, but they also protect the civil justice system from attacks that could hurt all our clients, present and future.


When a defendant rejects a plaintiff’s settlement offer made pursuant to O.C.G.A. § 9-11-68, and the plaintiff receives a final judgment amount greater than 125 percent of the amount of the settlement offer, the plaintiff is “entitled to recover reasonable attorney’s fees and expenses of litigation […] from the date of the rejection of the offer of settlement through the entry of judgment.” O.C.G.A. § 9-11-68(b)(2). Of course, calculating reasonable fees can be difficult for trial attorneys who typically use a contingency fee rather than an hourly rate. In Georgia Dep’t of Corr. v. Couch, the Georgia Supreme Court advised that courts determining § 9-11-68 attorneys fees “may consider a contingent fee agreement and the amount it would have generated as evidence of usual and customary fees in de-termining both the reasonableness and the amount of an award of attorney fees.”3However, courts will not rely solely on the contingency fee in determining reasonable fees. Rather, plaintiffs must show that the contingency fee is usual or customary and “a valid indicator of the value of the professional services rendered,” and must also introduce “evidence of hours, rates, or some other indication of the value of the professional services actually rendered.”4

The trial court can award the contracted contingency as long as the party seeking fees submits evidence regarding the amount of hours performed and rates “or some other indication of the value of the professional services actually rendered.”5 As the Couch court noted, with a contingency contract, “the value of the professional services actually rendered by the lawyer may be considerably higher or lower than the agreed-upon amount, depending on how the litigation proceeds.”6 Thus, courts have wide discretion to determine the value of the services actually rendered.

One logical way of determining the value of the services rendered is to calculate the pro-rata portion of the contingency fee earned after the rejection of the offer through the date of the entry of judgment, as a function of time spent.7 For example, if counsel spent 1,000 hours on the case, 250 or 25 percent of those hours prior to rejection of the offer, and 750 or 75 percent after, then the court could award 75 percent of the full contracted contingency fee based on pro-ration of time. Another method focuses on the “value of the professional services actually rendered,” which can be quantified comparing the contingency fee on the defense best offer to the contingency fee due on the ultimate judgment. For example, let’s say Plaintiff demands $1 million accompanied by a 9-11-68 offer. The defense rejects that offer, and stands by its $100,000 offer. Following a $2 million verdict, and assuming a 40 percent contractual fee, the value-added approach would suggest a court fee award of $760,000. (40 percent of the judgment minus 40 percent of the fee that would have applied to the defense’s best pre-offer of settlement offer).

Expect the defense to argue for a lower hourly fee award. However, a contingency-based calculation is more consistent with the canon of statutory construction to apply a statute’s plain meaning. After all, the text of 9-11-68(b)(2) says Plaintiff “shall be entitled to recover reasonable” fees and expenses “incurred by the plaintiff.” If the contract provides a contingency fee, then that is the only type and amount of fee the plaintiff has “incurred.” Coming up with a contrived hourly rate is difficult to square with the statutory text.

One practice pointer here is to make sure your contingency contract defines a fee as being incurred by a verdict. While the tactic was not successful, we have seen defense firms make the clever statutory argument that a fee contract defining the “contingency”purely in terms of a recovery of money meant there could be no 9-11-68 award at all. The argument keys in on the statutory text that the award cover fees incurred between rejection of the offer “through the entry of judgment.” Since judgment is almost always entered before money changes hands, the argument goes that the contingency of recovery has not yet happened, and as such no fee has been incurred. That argument strains the bounds of common sense, but why leave it open to chance when a simple change to your fee contract can render the argument moot?


Following a judgment, the plaintiff must step into the shoes of a “judgment creditor” in order to enforce the judgment against the defendant, who is now the “judgment debtor.” Thus, under O.C.G.A. § 9-11-69, the plaintiff can seek discovery in aid of executing the judgment. During this process, plaintiff might seek financial information including as to assets, liabilities, income, and obligations. Another very important thing to ask for is any correspondence from insurer to insured about any settlement offers within policy limits. Some insurers will send ‘excess assurance’ letters prior to trial essentially telling the insured ‘we’re not paying the demand, but don’t worry, if it goes against us we’ll pay the verdict even if it’s over limits.’ If there is such a letter in the case, it does not mean there is automatically no bad faith. But it does mean you may not have to pursue bad faith to collect over limits, since the insurer is already agreeing to be on the hook for the full judgment.





The claim against an insurance company for bad faith failure to settle belongs to the insured (usually the defendant in personal injury litigation), rather than the plaintiff. While the plaintiff is entitled to recover any amount in excess of the policy limits from the defendant, most of the time defendants do not have sufficient assets to satisfy the verdict. If the defendant recovers against the insurance company in a bad faith claim, however, the plaintiff may recover those assets from the defendant in satisfaction of the judgment. Therefore, following a jury’s verdict in favor of a plaintiff in excess of the defendant’s policy limits, the plaintiff has an interest pursing the defendant’s bad faith claim against his insurer. There are two ways of doing that: by seeking assignment of the bad faith claim, or by defendant/insured seeking rep-resentation for that claim. Under O.C.G.A. § 33-4-6, an insured has the right to pursue a statutory penalty and attorney’s fees whenever the insurance company refuses in bad faith to pay a covered loss. However, there is case law that third party claimants do not have standing to recover statutory bad faith claims against insurance companies, as such claims are available only as between insureds and their insurers.8 Further, Georgia law provides that insurers may limit the assignability of rights under policies through the use of non-assignability clauses.9Two recent cases litigated by our firm illustrate many of these concepts in practice, and two different ways to pursue ‘bad faith’ recovery in excess of policy limits. CASE EXAMPLESWe represented a 50-year-old carpenter who was rear-ended on the way to work. Our client ended up needing a lumbar fusion surgery, and had more than $200,000 in special damages. Having worked all his life, he did have some prior records of back pain. The defense keyed on that and also degenerative changes shown on MRI. The case was tried in Henry County. The defendant’s insurer rejected several offers, including one for the $100,000 policy limits, which were less than half of special damages at the time. The insurance company’s highest pre-trial offer was $26,000. The verdict was $1,400,000. There was also a 9-11-68 offer the defense rejected, which resulted in another $565,000 of fees being tacked on. In this particular case, through post-judgment discovery, we learned the carrier had given its insured an ‘excess assurance’ letter, which ultimately forced the carrier to resolve the claim well in excess of limits. Our firm also represented a client who suffered a back injury in a wreck while taking his daughter to school, requiring chiropractic treatment, epidural injections, and spinal surgery. Prior to litigation, the defendant rejected four settlement offers for the auto liability insurance limits of $25,000. After the lawsuit was filed but prior to trial, defendant also rejected a formal offer of settlement for $475,000, sent pursuant to O.C.G.A. § 9-11-68. The highest offer defendant made prior to trial was $25,000. This case was tried in Gwinnett County State Court in November 2015, and a jury awarded the plaintiff $3.7 million. In this case, after forcing the issue of post-judgment discovery and collection efforts, the insured driver was represented by very capable counsel, who ultimately was able to resolve the bad faith case for a significant sum over and above the verdict itself. Thus the insurer was held accountable for both ignoring our client’s reasonable demands and for exposing its insured to a crippling liability.


Alan Hamilton is a founding partner of Shiver Hamilton, LLC, with offices in Atlanta and St. Simons. He focuses his practice on serious personal injury and wrongful death across a range of case types, including commercial motor vehicle, trucking, premises liability, and negligent security.

Mary Ellen Lighthiser is an attorney practicing in Atlanta, Georgia with a wide range of litigation practice experience, including personal injury and wrongful death cases.


1Cotton States Mut. Ins. Co. v. Brightman, 276 Ga. 683, 684, 580 S.E.2d 519, 521 (2003). 2S. Gen. Ins. Co. v. Holt, 262 Ga. 267, 268, 416 S.E.2d 274, 276 (1992). 3Couch, 295 Ga. 469, 483, 759 S.E.2d 804, 815-16 (2014) (quoting Brock Built, LLC v. Blake, 316 Ga. App. 710, 714–715, 730 S.E.2d 180, 186 (2012). 4Id.5Id. 6Id. at 484. 7Id. at 485. 8 Amica Mut. Ins. Co. v. Sanders, 335 Ga. App. 245, 248, 779 S.E.2d 459, 462 (2015), reconsideration denied (Dec. 14, 2015). 9Williams v. Mayflower Ins. Co., 238 Ga. App. 581, 583, 519 S.E.2d 506, 508 (1999)

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