## Facts

- Robert Conrad was involved in an automobile accident with members of the Hebert family (the “Heberts”), who asserted personal-injury claims arising from the collision.
- The vehicle Conrad was driving was insured by Farmers Insurance Group, and Farmers handled the claim through its adjuster, April Bossley.
- Each Hebert claimant sent Bossley a written settlement offer to resolve the bodily-injury claim for a stated amount (described in the record as a policy-limits settlement demand).
- Each demand letter stated a specific deadline and method of acceptance, providing: “Payment must be made to me on or before 5:00 p.m., July 5, 2006,” and stating that the offer would expire if payment was not received by that time.
- Before the deadline, Bossley responded in writing indicating agreement with the settlement amount, but she requested that the Heberts first complete and return release forms and stated that checks would be sent after the releases were signed.
- The Heberts did not sign or return the releases, did not otherwise accept Bossley’s proposed process, and Farmers did not tender or deliver settlement payment by the July 5, 2006 deadline.
- After the deadline passed without payment, the dispute moved into litigation. Conrad asserted that a valid settlement had been formed and sought to enforce it; the Heberts maintained that their time-limited offers expired by their own terms.

## Issues

1. Whether the Heberts’ time-limited settlement offers—requiring actual payment by 5:00 p.m. on July 5, 2006—were accepted when the insurer sent a pre-deadline letter agreeing to the amount but conditioning payment on the prior execution of releases, and no payment was made by the deadline.

## Decision

- The court of appeals affirmed the trial court’s ruling that no enforceable settlement agreement was formed.
- Because the Heberts’ offers expressly required acceptance by timely payment, the failure to tender payment by the stated deadline meant the offers expired and no contract arose.
- The insurer’s response did not create a binding agreement where it proposed a different sequence for performance (signed releases first, payment later) and did not satisfy the offer’s specified method of acceptance.

## Legal Principles

- A settlement agreement is a contract, and ordinary contract-formation rules govern whether the parties formed an enforceable agreement.
- An offeror may set the time, manner, and conditions of acceptance; if the offer requires acceptance by performance (such as payment by a stated deadline), a different response (including a promise to pay later) does not constitute acceptance.
- A time-limited offer that states it will expire if not accepted in the specified manner lapses when the deadline passes without the required acceptance.
- A response that conditions agreement on additional steps or changes the method or timing required by the offer is not an unconditional acceptance and will not form a contract unless the original offeror agrees to the changed terms.

## Conclusion

Conrad v. Hebert holds that no settlement was formed where the claimants’ written demands made timely payment by a stated deadline the required mode of acceptance, the insurer replied with a conditional process requiring signed releases before payment, and payment was not made before the deadline, causing the offers to expire.


Conrad v. Hebert, 2010 WL 2431461 (2010)