Georgia Court of Appeals Invalidates Another Insurer’s Acceptance of a Holt Demand Based on Language in Settlement Check

Insurers attempting to accept a time-limited demand (often called a “Holt” demand in Georgia) must adhere to every term and condition of performance therein, even those that appear immaterial; otherwise, a court may find that no settlement has been reached.  Or so is the inference from the Georgia Court of Appeals’ recent decision in Patrick v. Kingston, 2024 WL 566609 (Ga. App. Feb. 13, 2024).

There, an insurer was sued for wrongful death after allegedly driving while intoxicated, driving the wrong way on Highway 316 outside of Athens, and striking the claimant’s car, killing her.  The insured’s policy limits were only $25,000.  The claimant’s counsel sent a Holt demand to the insurer with numerous terms and conditions of performance.  The insurer sent a response letter stating it accepted the demand “unconditionally, unequivocally, and without variance of any sort.”  But, when the insurer sent the settlement check, it stated on its face that it was “void if not presented within 90 days,” which the Holt demand did not authorize.  The court found the insurer had varied “even one term” of the Holt demand and had thusly rejected it, and no settlement had been reached.  The case will now go back to the trial court. 

In Patrick, the Court of Appeals cited and relied upon its opinion in Pierce v. Banks, 368 Ga. App. 496 (2023), wherein the court invalidated a settlement based on similar language on a settlement check that it was “void after 180 days.”  In that opinion, the court noted that where an insurer fails to perform even a non-material condition of performance set forth in a Holt demand, the insurer has rejected the demand.  The court’s opinion in Patrick appears to continue that line of authority.

Moving forward, when attempting to accept a Holt demand, insurers must be vigilant in accepting all terms of the demand, performing all conditions of performance, and omitting any non-conforming terms or conditions.  Experienced counsel can assist in doing so.  

If you would like advice on responding to or accepting a Holt demand, please contact Seslee Smith, Ryan Burke, or Nathan Miles of the Insurance Coverage and Bad Faith practice group.