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Estate v. Jones v. State Farm Mutual Automobile Insurance Company3/8/2002
The estate of Bill Wright Jones sued State Farm Mutual Automobile Insurance Company, alleging that State Farm had breached a settlement contract. The suit resulted from an automobile accident involving Jones, which occurred in Georgia in August 1998. As a result of the accident, Jones suffered personal injuries. Jones, without having filed any claims with respect to his personal injuries, died on December 6, 1998, from causes unrelated to the accident. On December 7, 1998, State Farm contacted Jones's attorney to settle the case for $25,000. Neither the State Farm agent nor Jones's attorney was aware of Jones's death. Jones's attorney accepted the offer.
On December 8, 1998, the State Farm agent and Jones's attorney learned that Jones had died. The State Farm agent first indicated to Jones's attorney that State Farm would pay the settlement proceeds to Jones's personal representative, but State Farm then refused to pay anything.
Jones's estate sued State Farm, alleging breach of a settlement agreement. State Farm moved for a summary judgment, and, after initially denying the motion, the trial court granted the motion. Jones's estate appeals; it argues that there was a valid settlement agreement, which State Farm breached.
The pertinent facts in this case are undisputed. Therefore, we review the circuit court's application of the law to the facts to determine whether State Farm was entitled to a judgment as a matter of law. See Carpenter v. Davis, 688 So. 2d 256, 258 (Ala. 1997). No presumption of correctness attaches to the decision of a trial court on a summary- judgment motion; our review is de novo. See Gossett v. Twin County Cable T.V., Inc., 594 So. 2d 635 (Ala. 1992).
State Farm argues that the settlement agreement was not enforceable and that it, therefore, was not breached because no tort claim was filed while Jones was alive, and because, it says, Jones's attorney therefore had no claim to settle on December 7, after Jones died. It also argues that the authority of Jones's attorney to settle the claim terminated with Jones's death. We agree.
"The general rule is that under Ala. Code 1975, § 6-5-462, an unfiled tort claim does not survive the death of the person with the claim." Malcolm v. King, 686 So. 2d 231, 236 (Ala. 1996). In addition, "an attorney's authority to act on behalf of a client ceases on the death of that client." See Brown v. Wheeler, 437 So. 2d 521, 523 (Ala. 1983), overruled on other grounds, Hayes v. Brookwood Hosp., 572 So. 2d 1251 (Ala. 1990); Matthews v. Matthews, 599 So. 2d 1218, 1220 (Ala. Civ. App. 1992), overruled on other grounds, Kissic v. Liberty Nat'l Life Ins. Co., 641 So. 2d 250 (Ala. 1994). See generally 1 Williston, Contracts, § 62 at 206 (3d ed. 1957) (explaining that " ince an offer can be accepted only by the person to whom it is made, the death of the offeree ... has the effect of precluding the possibility of a contract").
In a New Jersey decision almost directly on point, the New Jersey Superior Court held that a lawyer's authority to settle his client's unfiled personal injury claim terminated upon the client's death. See Smith v. Cynfax Corp., 261 N.J.Super. 378, 618 A.2d 937 (1992). The court stated:
"It is undisputed in this case that [the tortfeasor's insurance company] made a settlement offer of $7,000. The dispositive issue is whether anyone was capable of accepting that offer. Neither [Smith's lawyer] nor [Smith's husband] ever stood in the shoes of the deceased [Smith] for the purpose of accepting [the insurance company's] offer since the offeree was dead when the offer was made.
"The offer was made to Brenda Smith, not her estate. As Mrs. Smith's atto
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