Cravens v. Slaughter et al.

Jack Cravens was rear-ended by Ashleigh Slaughter, who was driving a company vehicle, and he claimed a shoulder injury with over $150,000 in medical bills. Because the at-fault driver's insurer, Auto-Owners, only offered its $50,000 policy limit, Cravens also sought $100,000 from his own uninsured motorist (UM) coverage, which happened to also be with Auto-Owners. He later settled the UM claim but continued suing over the liability claim, and Slaughter argued the liability claim must already have been settled because Georgia law requires exhausting liability coverage before collecting UM benefits. The Court of Appeals agreed with Slaughter, reasoning that Cravens could not have settled his UM claim unless the liability claim had already been resolved. The Supreme Court of Georgia disagreed, holding that the exhaustion rule from its earlier cases only applies when someone sues their UM carrier, not when someone is simply negotiating a settlement. It sent the case back to the Court of Appeals to decide, without relying on that rule, whether a settlement was actually reached.

The exhaustion requirement, which says a plaintiff must exhaust the at-fault driver's liability coverage before recovering under his own uninsured motorist policy, applies only to lawsuits against a UM carrier and does not require exhaustion before a plaintiff may settle a UM claim.

The ruling affects how Georgia drivers, insurers, and lawyers structure settlement negotiations after car accidents involving both liability and uninsured motorist coverage. It clarifies that people can pursue UM settlements without waiting to fully settle their claim against the at-fault driver's insurer first.

Vacated and remanded with direction

1. The court explained that its earlier decision in Daniels v. Johnson first recognized the exhaustion requirement, the rule that a plaintiff must resolve his claim against the at-fault driver's liability insurer before recovering under his own uninsured motorist (UM) policy, but that case arose from a lawsuit against a UM carrier, not a settlement negotiation.
2. Two later cases, Thompson v. Allstate and Carter v. Progressive Mountain, restated the same exhaustion rule but also only in the context of lawsuits seeking to collect UM benefits, never addressing whether a plaintiff could settle a UM claim before exhausting liability coverage.
3. Because none of these prior cases involved a settlement offer, the court concluded that they do not control whether Cravens's early settlement talks with Auto-Owners over his UM claim required his liability claim to have already been settled.
4. The court reviewed the statutes Slaughter relied on, including OCGA § 33-7-11 (which defines uninsured vehicles and UM coverage amounts) and OCGA § 33-24-41.1 (which governs settling with a liability carrier while preserving a UM claim), and found none of them address the timing of UM settlement offers.
5. Applying the general Georgia contract-law principle that parties may agree to any lawful terms unless a statute or public policy forbids it, the court found no statute or policy reason to bar a driver from settling a UM claim before his liability claim is resolved.
6. Because the Court of Appeals had based its finding of an enforceable settlement entirely on the mistaken assumption that exhaustion was required, the Supreme Court of Georgia vacated that ruling and sent the case back for the Court of Appeals to decide the settlement question without relying on the exhaustion rule.

• uninsured motorist coverage
• car accident settlement
• exhaustion requirement
• Auto-Owners Insurance
• liability insurance