ST. LOUIS — The U.S. Court of Appeals for the Eighth Circuit has affirmed the dismissal of a lawsuit brought by Permanent General Assurance Corporation against a Missouri man over a disputed settlement agreement stemming from a vehicle crash, concluding that no enforceable contract was ever formed between the parties.
In a decision filed May 5, a three-judge panel of the appellate court agreed with a lower court’s ruling that the insurer’s response to a settlement proposal from Andrew Spooner constituted a counteroffer rather than an acceptance under Missouri contract law.
As a result, the court found there was no “meeting of the minds” necessary to create a binding agreement.
The dispute arose after a collision involving Spooner and Casey Graham on a Missouri roadway.
According to the opinion, Graham was driving a vehicle owned by Brandon Ward, whose insurance policy with Permanent General Assurance Corporation, or PGAC, provided up to $25,000 in bodily injury coverage per injured person.
The insurer determined that coverage extended to claims involving Graham because Ward had permitted Graham to drive the vehicle.
Following the crash, Spooner sent a letter to PGAC describing severe injuries that he said required months of hospitalization.
He also wrote that he did not want Graham “to get in trouble or have to pay [him] a lot of money,” but said he had significant medical bills, was unable to work and needed financial help.
Spooner proposed that if the insurer paid him Graham’s “insurance money,” he would not pursue additional money from Graham or hire a lawyer.
PGAC later responded with a letter stating that it was “an offer to settle the liability” and that, to conclude the claim, Spooner needed to complete and return the enclosed documents.
The insurer stated it had “agreed to tender the $25,000.00 policy limits in exchange for a signed release.”
Included with the correspondence was a release and indemnity agreement that required Spooner to release both Ward and Graham from all personal injury claims arising from the accident.
Several weeks later, an attorney representing Spooner replied that the release agreement did not match Spooner’s original proposal because it included a release for Ward in addition to Graham.
Spooner, therefore, treated the insurer’s response as a rejection of his offer rather than an acceptance.
PGAC then filed suit, arguing that its response constituted an acceptance of Spooner’s offer and that Spooner breached an enforceable settlement agreement by refusing to proceed.
The district court dismissed the case, finding that the insurer’s response added a new term and therefore acted as a counteroffer rather than a “mirror-image” acceptance required under Missouri law.
Writing for the appellate panel, Circuit Judge Morris Sheppard Arnold said the district court correctly concluded that PGAC’s response included an additional term by requiring Spooner to release claims against Ward.
Because Spooner never accepted that counteroffer, no contract came into existence, the court held.
The opinion explained that Missouri law requires “a definite offer, an unequivocal acceptance, and a mutual agreement on the same thing in the same sense at the same time” to create a binding contract.
The court cited Missouri precedent stating that if a purported acceptance introduces new or different terms, it legally functions as both a rejection of the original offer and a counteroffer.
The appellate court rejected PGAC’s argument that the scope of the release was merely a non-essential term that could be finalized later.
The panel pointed to the insurer’s own wording in its response letter, which described the proposal as “an offer to settle” and stated that Spooner needed to sign and return the release “in order to conclude this claim.”
The court said the language demonstrated that Spooner’s acceptance of the release terms was required before any agreement would exist.
The panel also rejected PGAC’s contention that the district court improperly relied on the correspondence attached to the complaint or failed to accept the complaint’s factual allegations as true when ruling on the motion to dismiss.
The court stated that while factual allegations must be credited at that stage of litigation, courts are not required to accept legal conclusions drawn from the facts.
It further noted that the district court was permitted to review the attached letters and disregard allegations contradicted by the documents themselves.
Finally, the Eighth Circuit found no reversible error in the district court’s failure to grant PGAC leave to amend its complaint.
Although the insurer briefly referenced an amendment in its briefing, the appellate court said such passing references were insufficient to properly request leave to amend.
The opinion stated that PGAC should have separately moved to amend and provided either a proposed amended complaint or the substance of the proposed changes for the court’s consideration.
The appellate court affirmed the district court’s dismissal of the lawsuit in full.
U.S. Court of Appeals for the Eighth Circuit case number: 25-2552
