Matthew Dwyer Jr. Dwyer Law, Atlanta. (Photo: John Disney/ ALM)

The Georgia Supreme Court on Monday declined to take up an insurer's appeal of a ruling that its demand for "clarification" regarding a liability release constituted a counteroffer to a settlement, leaving it open to claims for bad-faith failure to settle. 

The closely watched case means a driver who suffered serious injuries can continue to pursue her case in Cherokee County Superior Court, where a judge previously ruled that Liberty Mutual Insurance made a legally binding settlement offer for its $100,000 policy limits. 

"This is a very significant denial, because there's been an effort by plaintiffs' lawyers to say, 'Here's our demand, you must say a, b, and c to accept.' Over the years, courts have gotten increasingly aggressive about what a counteroffer is," said Matt Dwyer, who represents the injured driver.

"This is a big step for the Supreme Court to say they won't just let insurers say 'Here's our demand,'" and plaintiffs must accept it, said the Dwyer Law Group principal.      

"My client suffered horrific injuries," said Dwyer, who represents Patricia Carr with James Neuberger of Neuberger Law and Bondurant Mixson & Elmore partner Michael Terry, who was brought on board to help with the appeal. 

The decision also leaves in place a Court of Appeals ruling that the at-fault driver's parents cannot be held vicariously liable. 

The defendant driver, Jenny Yim, is represented by J. Robb Cruser and Kathleen Hurley of Cruser, Mitchell, Novitz, Sanchez, Gaston & Zimet. Cruser did not respond to requests for comment.     

As detailed in the Court of Appeals opinion and other filings, Yim suddenly turned left in front of Carr's BMW 330 sedan causing the wreck. The crash left Carr, now 65, with a fractured spine that required surgery to remove fragments of vertebrae and insert a steel rod and cage. 

Carr's medical bills totaled more than $500,000, and Dwyer said she is still unable to walk any distance without pain. 

Yim's mother had co-signed for her 2014 Hyundai Sonata, and she was included on the Liberty Mutual policy carried by her parents, John and Bok Yim.

Shortly after the wreck, Carr's lawyers sent a letter to Liberty Mutual demanding the policy's $100,000 limit within 30 days.

The letter specified that only Yim would be released from liability, and included a release form to be filled out and returned.

"We are not aware of any other persons or entities that might be liable for Ms. Carr's injuries," the letter said, "and any request for a release of other persons or entities that are or may be liable will constitute a rejection of this offer and a counter-offer to resolve claims against other potentially liable parties."  

Two weeks later, Liberty Mutual's representative wrote back: "First, we agree that as consideration for the payment of $100,000, Patricia Carr will execute a limited release and settlement agreement resulting from the April 14, 2016, date of loss. … We have previously forwarded our policy declarations to you, which indicate the named insureds under the policy as John Yim and Bok Yim, with Jenny Yim being a listed driver under the policy. Your proposed limited liability release does not list our named insureds John Yim or Bok Yim."

The letter requested "clarification from you that Ms. Carr does not intend to assert claims against the named insureds under the applicable policy." 

"To reiterate, both our discussions, as well as this letter, are in no way intended to be either a rejection of your demand or a counter-offer," it said. "Rather, it is Liberty Mutual's intent to accept your settlement demand unequivocally and without variance."

Dwyer responded that the response did not constitute acceptance of her offer "and was a counteroffer because it sought a limited liability release that included Yim's parents," and that Carr refused to accept it. 

Carr sued Yim for negligence in Cherokee County State Court, naming her parents as co-defendants under a theory of vicarious liability.

Yim filed a motion asking the court to enforce the settlement agreement, and her parents filed a motion for summary judgment seeking dismissal of the claims against them. 

Judge Michelle Homier granted the motion to enforce the settlement agreement but denied the motion to dismiss the claims against the parents. Both sides appealed. 

In an April opinion, Court of Appeals Judge Anne Elizabeth Barnes said Homier erred in ruling that there had been a settlement "because there was no acceptance and meeting of the minds regarding who would be released and/or because Liberty Mutual's response letter constituted a counteroffer."

"Given this record, a reasonable person in the position of Liberty Mutual would have understood that Carr considered the particular release form attached to the settlement offer to be essential to her willingness to settle her bodily injury claims and that she would not agree to a settlement that released any parties other than Yim," Barnes' opinion said. 

The opinion upheld Homier's ruling that Yim's parents were not responsible for her actions while driving the car.

When the lower appellate court released its opinion, Carr's lawyer, Neuberger, said the vicarious liability ruling was of little importance to the case, and that it was only the insurer's  insistence that Yim's parents be released from liability that raised the issue to begin with. 

"When Liberty Mutual brought their names up we began to wonder if there was some reason for it," Neuberger said then. "We were concerned that the mother and father might have some additional insurance that hadn't been disclosed."

The case is Yim v. Carr, No. S19C1220