SOUTHERN GENERAL INSURANCE COMPANY v. HOLT et al., 262 Ga. 267, 416 S.E.2.d 274 (1992)
Certiorari to the Court of Appeals of Georgia -- 200 Ga. App. 759., Judgment affirmed in part and reversed in part. All the Justices concur.
Taylor & Harp, J. Sherrod Taylor, Jefferson C. Callier, William S. Stone, Middleton & Anderson, Elizabeth F. Bunce, Long, Weinberg, Ansley & Wheeler, Sidney F. Wheeler, Carol P. Michel, Neely & Player, John W. Winborne III, Julianna Kauderer, Wetzel & Carroll, Michael L. Wetzel, Frank J. Beltran, Foy R. Devine, amici curiae.Charles A. Gower, Terry Lee Strawser, Kelly, Denney, Pease & Allison, Ernest Kirk II, for appellees.Freeman & Hawkins, Paul M. Hawkins, Michael J. Goldman, for appellant.We granted the writ of certiorari to determine whether an insured has a claim for bad faith against an insurance company for its failure to settle a claim within the policy limits based on a time-limited settlement offer by the injured person's attorney. We affirm the Court of Appeals' decision upholding the jury verdict against the insurance company for bad faith refusal to settle, but reverse the award of punitive damages to the insured.Bridget Holt drove her automobile through a stop sign and injured Geneva Fortson on June 19, 1987. Holt's liability for the collision is undisputed and her insurance company, Southern General Insurance Company, paid Fortson's property damage claim. On July 27, 1987, Southern General's claims representative wrote Fortson's attorney seeking information on her personal injuries for settlement purposes. On October 7, 1987, Fortson's attorney wrote Southern General, offering to settle the claim within ten days for $30,000. He included medical bills and asserted claims for additional medical expenses and lost wages. He withdrew the offer on October 13 when Fortson entered the hospital for treatment of a ruptured disk. On October 19, he requested information on the amount of the policy. On October 28, Southern General refused to reveal the policy limits, but sought medical information on the ruptured disk.On November 2, Fortson's attorney again wrote Southern General offering to settle Fortson's claim for the policy limits and stating that her medical bills totaled more than $10,000 and her lost wages exceeded $5,000. Included with this letter were doctor's notes showing that Fortson had a herniated disk and medical bills totaling $6,568. The offer was good for ten days. On November 9, Fortson's attorney reiterated that the offer to settle for the policy limits was open until November 12. On November 10, he sent proof of additional expenses of $4,335. On November 12, he extended the offer to settle for the policy limits for five more days until November 17 and enclosed a certified copy of Fortson's complete medical records. Southern General did not seek more time to evaluate the claim or respond to the offer before it expired. On November 18, Fortson's attorney withdrew the settlement offer. On November 20 and again on December 4, Southern General offered to settle Fortson's claim for the policy limits of $15,000. Fortson rejected the offers. At trial, a jury returned a verdict of $82,000 in favor of Fortson.Holt assigned her claim against Southern General for negligent or bad faith refusal to settle within the policy limits to Fortson. Fortson sued Southern General based on this assignment, seeking $67,000 plus interest for the insurance company's bad faith failure to settle. Holt additionally brought a claim for intentional infliction of emotional distress and for punitive damages. A jury awarded $83,000 in compensatory damages to Fortson and $25,000 in compensatory and $100,000 in punitive damages to Holt. The Court of Appeals affirmed the jury award of compensatory damages to Fortson and punitive damages to Holt, but reversed the award of compensatory damages to Holt. Southern Gen. Ins. Co. v. Holt,