Traffic Citations Can Extend the Statute of Limitations for Personal Injury Actions to Two Years in Tennessee

On January 28, 2021, the Tennessee Court of Appeals issued a ruling in the case of Reginald M. Younger v. Kibreab Kidane Okbahhanes, No. E202000429COAR10CV, 2021 WL 289332 (Tenn. Ct. App. Jan. 28, 2021). The Court held the one-year statute of limitations for personal injury actions under Tenn. Code Ann. § 28-3-104(a)(1) can be extended to two years pursuant to Tenn. Code Ann. § 28-3-104(a)(2).

Tenn. Code Ann. § 28-3-104(a) reads as follows:

(a)(1) Except as provided in subdivision (a)(2), the following actions shall be commenced within one (1) year after the cause of action accrued:

    1.  Actions for libel, injuries to the person, false imprisonment, malicious prosecution, or breach of marriage promise;
    2. Civil actions for compensatory or punitive damages, or both, brought under the federal civil rights statutes; and
    3. Actions for statutory penalties.

(2) A cause of action listed in subdivision (a)(1) shall be commenced within two (2) years after the cause of action accrued, if:

    1. Criminal charges are brought against any person alleged to have caused or contributed to the injury;
    2. The conduct, transaction, or occurrence that gives rise to the cause of action for civil damages is the subject of a criminal prosecution commenced within one (1) year by:
      1. A law enforcement officer;
      2. A district attorney general; or
      3. A grand jury; and
    3. The cause of action is brought by the person injured by the criminal conduct against the party prosecuted for such conduct.

(3) This subsection (a) shall be strictly construed.

Younger relates to a traffic collision that occurred in September 2017 in Roane County, Tennessee. Defendant Okbahhanes was issued a traffic citation for (1) failure to exercise due care, (2) violation of financial responsibility law [i.e., proof of insurance], and (2) failure to carry registration documents. In October 2017 Okbahhanes paid a fine relating to the charge of failure to exercise due care; the remaining charges were dismissed in November 2017.

In April 2019, Younger filed an action against Okbahhanes, alleging that the action was timely pursuant to Tenn. Code Ann. § 28-3-104(a)(2). Okbahhanes filed an answer denying the allegations against him and pleading an affirmative defense that the action was time-barred. Okbahhanes later filed a motion for summary judgment, arguing that the one-year statute of limitations under Tenn. Code Ann. § 28-3-104(a)(1) applied. The trial court denied the motion for summary judgment, finding that the traffic citation for failure to exercise due care was related to the conduct that gave rise to the action; that the citation was a criminal charge; that the citation commenced a prosecution; and that Younger was allegedly injured by Okbahhanes’ criminal conduct.

Okbahhanes appealed the trial court’s order to the Tennessee Court of Appeals, which affirmed the trial court’s ruling. The Court of Appeals held that in construing Tenn. Code Ann. § 28-3-104(a)(2), the plain meaning of a statute’s words must be applied. Baker v. State, 417 S.W.3d 428, 433 (Tenn. 2013). When a statute’s language is clear and unambiguous, the statute is enforced as written. Frazier v. State, 495 S.W.3d 246, 249 (Tenn. 2016).

Tennessee law is clear that a violation of Tenn. Code Ann. § 55-8-136 for failure to exercise due care is a Class C misdemeanor and, therefore, a crime. The Court of Appeals held that the language of Tenn. Code Ann. § 28-3-104(a)(2) is clear and ambiguous. As such, the Court of Appeals held that the traffic citation issued to Okbahhanes for failure to exercise due care is a criminal charge, and a criminal prosecution by a law enforcement officer, such that Tenn. Code Ann. § 28-3-104(a)(2) acted to extend the statute of limitations to two years.

The statutes contained in Tenn. Code Ann. § 55-8-101 et seq. constitute the Rules of the Road when it comes to operating motor vehicles in the State of Tennessee. Such violations include obeying stop signs and traffic lights, driving on the wrong side of the road, maintaining a safe distance, signaling, etc. Tenn. Code Ann. § 55-8-103 states that it is a Class C misdemeanor for any person to violate the Rules of the Road. Violation of the financial responsibility and registration laws contained in Younger are also Class C misdemeanors.

A number of questions remain unanswered with regard to Tenn. Code Ann. § 28-3-104(a)(2), and it may yet come before the Court of Appeals again under different facts. The Court of Appeals did not discuss in detail Okbahhanes’ violation of the financial responsibility and vehicle registration laws, which were dismissed prior to the lawsuit being filed. Although they are Class C misdemeanors, it stands to reason that violation of those laws was not conduct, a transaction, or an occurrence that caused the underlying collision or gave rise to Younger’s cause of action. If Okbahhanes had been cited with those paperwork violations, but not failure to exercise due care, would the statute of limitations have been extended to two years?

Other questions arise in the area of premises liability. Violation of a state building code is a Class B misdemeanor. Tenn. Code Ann. 68-120-108. Violation of county building codes is a Class C misdemeanor. Tenn. Code Ann. 5-20-105(b)(1). Suppose, for example, that a person is injured due to alleged improper design or construction in violation of a building code or ordinance. If the person responsible for the violation is later cited by the authorities and sued by the injured person, would the statute of limitations be extended to two years under Tenn. Code Ann. § 28-3-104(a)(2).

Okbahhanes has until March 1, 2021, to appeal the Order of the Court of Appeals.

The case is Reginald M. Younger v. Kibreab Kidane Okbahhanes, No. E202000429COAR10CV, 2021 WL 289332 (Tenn. Ct. App. Jan. 28, 2021)

No Bad Faith in Uninsured Motorist Claim Where Damages in Dispute

This Tuesday, the 11th Circuit affirmed a summary judgment granted in favor of State Farm, holding that State Farm was not legally obligated to pay the claim since the amount of damages was in dispute.

Alabama law states that there can be no breach of an uninsured motorist contract, and therefore no claim for bad faith, unless and until the insured proves that he is “legally entitled” to recover. In this case, the record established that the other driver was at-fault. However, the analysis did not stop there.

The Court provided that, to establish that a plaintiff is “legally entitled” to recover, both liability and damages must be proved. Here, the record was clear that State Farm disputed the amount of damages claimed by plaintiff. As such, his claims for breach of contract and bad faith were properly dismissed as premature.

The case is Broadway v. State Farm Mut. Ins. Co., 2017 U.S. App. LEXIS 5350 (March 28, 2017).

Southern District Grants Summary Judgment To Insurer Where Policy Expressly Excluded Coverage For Its Volunteer Workers

The Southern District recently issued an Order granting summary judgment to an insurance carrier because its policy unambiguously excluded coverage for bodily injuries arising out of the use of any vehicle operated by a “volunteer worker.”  McKeel v. Auto-Owners Insurance Co., 2015 WL 1333998 (S.D.Ga. March 24, 2015).

In McKeel, Plaintiff was involved in a motor vehicle accident when Cuong Nguyen improperly turned into the path of her vehicle.  Plaintiff, who was pregnant at the time, suffered injuries in the accident and prematurely delivered her baby.  Unfortunately, the baby died due to the injuries sustained in the accident.  At the time of the accident, Nguyen was a “volunteer worker” of Limelight Bar and Grill, LLC, which was owned by Nguyen’s brother.

Limelight was insured under a commercial general liability policy issued by Auto-Owners that provided bodily injury liability limits in the amount of $1,000,000.  Auto-Owners denied Plaintiffs’ demand for the policy limits because the policy excluded bodily injuries that arose out of the use of an automobile.

Plaintiffs filed a personal injury suit in the State Court of Bryan County and obtained a verdict against Nguyen in excess of $3,000,000.  Nguyen assigned his interest in any claim he may have against Auto-Owners to Plaintiffs.  Plaintiffs then filed a declaratory judgment action to determine if “the insurance policy at issue covers the events giving rise to the underlying lawsuits.”  Auto-Owners filed a counter-claim for declaratory judgment to determine that it has “no obligation to make payment for any amount relating to the [Plaintiffs’] judgment for damages obtained by them in the Underlying Liability Lawsuit.”  Following discovery, Auto-Owners filed summary judgment arguing that Plaintiffs’ claims are unambiguously excluded by the policy.

The policy contains an exclusion that expressly excludes “’[b]odily injury’ or ‘property damage’ arising out of the ownership, maintenance, use or entrustment to others of any aircraft, ‘auto,’ or watercraft owned or operated by or rented or loaned to any insured.”  The Court determined that based on this clear and unequivocal language, the policy does not provide coverage for any bodily injury that is based on the use of a vehicle operated by an insured.

The issue, then, was whether Nguyen was an insured under the Auto-Owners policy.  The policy defined insureds to include “‘volunteer workers’ only while performing duties related to the conduct of your business.”  It was undisputed that Nguyen was a “volunteer worker” at the time of the accident.  The Court concluded that Nguyen was an insured under the terms of the policy.

Because the policy expressly excluded coverage for bodily injury arising out of the use of any vehicle operated by an insured, the Court granted Auto-Owners summary judgment and found that the policy did not provide coverage for the injuries claimed by Plaintiffs in the underlying lawsuit.

Allocation of Underlying Settlement and UM Coverage Set-Off

Long standing Georgia law requires a claimant to exhaust the tortfeasor’s underlying liability insurance limits before looking to uninsured motorist insurance for coverage.  Daniels v. Johnson, 270 Ga. 289, 290 (1998). Additionally, Georgia public policy prohibits the recovery of punitive damages from an uninsured motorist insurer. State Farm Ins. Co. v. Weathers, 260 Ga. 123, 392 S.E.2d 1 (1990); Bonamico v. Kisella, 290 Ga.App. 211, 213, 659 S.E.2d 666 (2008); Roman v. Terrell, 195 Ga.App. 219, 219–222(2), (3), 393 S.E.2d 83 (1990).

So what is the effect on UM coverage when a claimant allocates the liability settlement payment between punitive damages and compensatory damages? According to the Georgia Supreme Court, in Carter v. Progressive Mountain Insurance Company, 2014 WL 3396496 (Ga., July 14, 2014), while allocation is not prohibited, any allocation will not increase the UM carrier’s coverages.

In Carter, the plaintiff was injured in an automobile collision with a driver allegedly driving under the influence of alcohol. Carter settled her claim with the liability carrier, pursuant to a limited liability release; but, within the terms and conditions of the release specifically allocated $29,000.00 of the $30,000.00 policy limits as payment of punitive damages and only $1,000.00 toward compensatory damages. Carter then pursued recovery of compensatory damages from her UM carrier, Progressive.

Arguing that the inclusion of such an allocation within the terms and conditions of the limited liability release effectively shifted payment of punitive damages to the UM carrier, Progressive moved for summary judgment. The trial court granted the motion, and the Court of Appeals affirmed. But, the Georgia Supreme Court reversed. The Supreme Court held that although Carter had exhausted the underlying liability limits, any additional recovery from her UM carrier remained subject to the statutory limitations of O.C.G.A. §§33–24–41.1(d)(2) and 33-7-11.

Writing for the Court, Justice Hines explained

Under OCGA § 33–24–41.1(d)(2), “the amount paid under a limited release shall be admissible as provided by law as evidence of the offset against the liability of an uninsured motorist carrier and as evidence of the offset against any verdict of the trier of fact.”  And, by the plain language of the statute, it is “the amount paid” that is admissible, not merely the amount attributed to compensatory damages. Further, … [u]nder O.C.G.A. § 33-7-11(b)(1)(D)(ii)(I), recovery under the UM policy will be limited to “the insured’s losses in addition to the amounts payable under any available [liability] coverages” and, “the insured’s combined recovery from the insured’s uninsured motorist coverages and the available [liability] coverages … shall not exceed the sum of all economic and noneconomic losses sustained by the insured.” (Emphasis in original.)

Id. at *3.

Finally, the Supreme Court noted that “punitive damages do not represent ‘losses’ by the insured, and regardless of any designation of such payments in the release, when the UM policy is brought into play, the combined recovery will not exceed the insured’s economic and noneconomic losses.” Id. Unfortunately, however, resolution of Carter type cases requires a jury trial to determine the amount of recoverable compensatory damages, and thus determine the amount of UM coverage available to the plaintiff.  But the message to claimants is clear: allocate the liability settlement any way you choose; the UM carrier still gets credit for every penny.

Georgia Court Of Appeals Says “Applicable” Is Ambiguous

The availability of UM coverage in varying circumstances is keeping Georgia’s appellate courts busy.  As claimants look for all available means of recovery, their insurers and the courts are struggling to keep up with a landscape that changes on a near-weekly basis.  Although it has long been the law in Georgia that courts will not strain to find ambiguities where none exist, a recent ruling by the Court of Appeals suggests that it may be willing to at least stretch.

Typically, before an insured can recover UM benefits, he or she must first exhaust the applicable underlying liability limits. However, in Wade v. Allstate Fire & Cas. Co., 751 S.E.2d 153 (Ga. Ct. App. 2013), an insured reached a partial settlement to receive the full limit of one allegedly negligent motorist’s liability insurance limits in connection with a multi-vehicle accident and then sought to recover benefits under his UM policy, though he had not exhausted the liability limits of the two other allegedly negligent motorists.

Bernard Wade, who was insured under an Allstate liability policy with added-on UM coverage in the amount of $25,000.00 per person, was injured in a multi-vehicle accident and filed suit against the other drivers involved in the accident—Fred Bergh, Dale Froman, and James Bruce—alleging that their negligence caused his injuries. Wade also served his insurer, Allstate, with a copy of his suit.

pie chart with money

Wade subsequently settled with Bruce (and his mother who had also been named as a defendant under the family purpose doctrine), through the payment of the full limits of their liability insurance policy in exchange for a limited liability release. Wade then settled his claims against Bergh and Froman, as well as Froman’s employer, for a total sum of $30,000, which was an amount less than the full amount of their respective liability policy coverages. Wade executed a general release with respect to Bergh, Froman, and Froman’s employer and dismissed these defendants with prejudice.

Allstate consented to the dismissal of Bergh, Froman, and Froman’s employer, but it expressly noted that it did not waive any defenses regarding Wade’s claim for UM benefits. Allstate moved for summary judgment, contending that under the UM provision in Wade’s policy, it was not obligated to pay on Wade’s claim for UM benefits since he had not exhausted the limits of the insurance liability protection available to all named-defendants. The trial court granted Allstate’s motion, finding that the UM provision clearly and unambiguouslyOn appeal, however, Wade argued that summary judgment was improper because there had not been a determination as to the extent of his damages and there had been no apportionment of fault as required by law.  Wade contended that he had exhausted the policy limits with respect to one of the defendants but that Allstate’s UM coverage obligation could not be determined until liability of all defendants had been apportioned.  The Court of Appeals agreed. provided that Allstate was not obligated to pay benefits because Wade did not exhaust the limits of insurance for all defendants.

The Court held that the term “applicable” in the exhaustion provision was ambiguous.[1]  The Court explained the because there were multiple tortfeasors, who could not be held jointly and severally liable, then their respective liability carriers were only responsible for the amount of the damages apportioned to each tortfeasor.  “[I]t stands to reason that an individual tortfeasor’s liability insurance is not ‘applicable’ to pay for any other tortfeasor’s damages.”  Although Wade settled with the Bruces pursuant to a limited liability release and the remaining defendants pursuant to a full release, there had been no determination as to the percentage of fault attributable to each.  The Court of Appeals ruled that Wade would be entitled to UM benefits “if there is an uninsured or underinsured motorist who is legally responsible for his damages.”  More precisely, if there were any losses attributable to the Bruces in excess of their policy limits, then Wade would be entitled to UM coverage. Accordingly, the court ruled that Allstate was not entitled to judgment as a matter of law and remanded the case for a factual determination of Wade’s damages and for an apportionment of fault among the defendants.

This holding suggests that UM carriers may face protracted litigation in cases involving multiple tortfeasors, especially if the plaintiff settles with one or more of the defendants before trial for less than the liability limits.  If that happens, then the UM carrier may be forced to try the case in order to determine whether the degree of fault attributable to the settling party (or parties) exceeded their respective policy limits, thus triggering UM coverage.

[1] The exhaustion provision stated, in pertinent part:

[Allstate is] not obligated to make any payment for bodily injury or property damage under this coverage which arises out of an accident involving the use of an underinsured motor vehicle until after the limits of liability for all liability protection in effect and applicable at the time of the accident have been exhausted by payment of judgments or settlement.

Legal Liability and Insurance Coverage in a Social Media World

city girl on phone, taxi, appIf you have not noticed, taxi cab and limo service providers are facing stiff competition.  Uber and Lyft—and Hailo coming this spring—are transportation network companies that match passengers and drivers together via a smartphone application.  Both Uber and Lyft have enjoyed resounding success across the country by providing quicker service to those in need of transportation; they also serve suburban areas that historically did not enjoy access to such services.

Naturally, however, with success comes detractors and intense probing from outsiders.  The most recent hot topic on the table for these self-proclaimed tech companies is that of legal liability and insurance coverage.  If an Uber or Lyft driver gets into an accident, who is liable?  The driver alone, or both the driver and the company?  In a traditional employee-employer relationship, if an employee is in the course and scope of his employment, and his negligence results in bodily injury or property damage, then the employer is vicariously liable for the employee’s actions.

Uber and Lyft officials, however, maintain that drivers are not their employees; but rather, are independent contractors.  As independent contractors, the drivers are solely liable for property damage and bodily injury caused while transporting passengers or while driving in search of passengers.  The companies claim that they do not have influence over the drivers or the cars they operate; rather, they merely control the application that facilitates the connection between passengers and drivers, and thus are not liable for the negligence of the driver.

In evaluating whether an individual is working as an employee or independent contractor, courts examine several factors: (1) the extent of control the employer exercises over the work; (2) whether the worker is engaged in a distinct occupation or business; (3) whether or not the work performed is usually done under the direction of the employer; (4) the skill required in the particular occupation; (5) whether the employer supplies the tools and the place of work for the one employed; (6) the length of time the person is employed; (7) the method of payment, whether by time of by the job; (8) whether or not the work to be performed is a part of the regular business of the employer; (9) whether or not the parties believe they are creating an agency relationship; and (10) whether the employer is or is not in business.  See Moss v. Cent. of Ga. R. Co., 135 Ga. App. 904, 906, 219 S.E.2d 593, 596 (1975).

As Uber and similar app-based companies continue to grow, accidents will occur, and courts across the country will be evaluating the legal liability for not only the drivers, but the app-based companies.  In fact, California will likely put this conundrum to the test, shortly, due to an accident that occurred in San Francisco on New Year’s Eve where a six year old girl was killed by an Uber driver as she walked through a crosswalk.

Other states, including Georgia, are attempting to address the problem through legislation.  Representative Alan Howell from Hartwell introduced a bill that would implement several stringent restrictions and regulations on companies like Uber and Lyft to bring them more in line with the Atlanta taxi and limo industry.  Most notably, the bill would require drivers to obtain commercial liability insurance, which would at least ensure a significant minimum liability insurance threshold for Uber and Lyft drivers.  Irrespective of these efforts, this question of legal liability and insurance liability coverage will spawn intense legal discourse in the coming months and years.

South Carolina Supreme Court invalidates “owned vehicle” UIM exclusion for Class I insured to permit stacking, distinguishes Burgess

In Carter v. Standard Fire Insurance, Op. No. 27340 (December 11, 2013), the Supreme Court held that South Carolina’s UIM statute prohibits an insurer from excluding UIM coverage for a Class I insured when he is occupying a vehicle he owns but does not insure under the subject policy. In Carter, Michael Carter was seriously injured while riding as a passenger in a vehicle he and his mother owned. The involved vehicle was insured under an Allstate policy that provided liability and UIM limits of $250,000. Allstate tendered $750,000, representing the liability limits plus the UIM limits on the involved vehicle and a second vehicle insured under the same policy. Carter then sought UIM coverage from Standard Fire under a policy issued to his parents, which provided UIM limits of $250,000 for three vehicles insured under the policy, for a total of $750,000.

In Carter, the Court clarified that the rationale of Burgess is only applicable when the insured has the ability to purchase UIM coverage on the involved vehicle, but declines to do so.

Standard Fire asserted that an “owned vehicle” exclusion in the policy barred Carter from stacking the additional UIM coverage. The provision excluded UIM coverage for any person “while ‘occupying’ . . . any motor vehicle owned by you or any ‘family member’ which is not insured for this coverage under this policy.” It was undisputed that Carter and his mother owned the involved vehicle, and the involved vehicle was not insured under Standard Fire’s policy. However, Carter resided with his parents and therefore qualified as a resident relative Class I insured.

Standard Fire relied on language in Burgess v. Nationwide Mutual Insurance Company, 373 S.C. 37, 644 S.E.2d 40 (2007), that “public policy is not offended by an automobile insurance policy provision which limits the portability of basic ‘at home’ UIM coverage when the insured has a vehicle involved in the accident.” The Supreme Court found that the rationale of Burgess was not applicable.

Burgess involved a situation where the insured was injured while riding a motorcycle he owned that did not carry UIM coverage. Burgess sought to “port” UIM coverage from an at-home policy issued by a different insurer. The Burgess court found that under the circumstances, public policy was not offended by precluding UIM coverage where the insured was injured in a vehicle he owned but did not purchase UIM coverage for (to hold otherwise would permit an individual who owns multiple vehicles to purchase UIM for only one, yet have basic UIM coverage on all).

In contrast, Carter involved a situation where the insured did purchase UIM coverage on the involved vehicle and sought to stack the coverage available under his parents’ policy as a resident relative. TheCarter court held that the “owned vehicle” exclusion contravened the language of the UIM statute and was therefore invalid.

Standard Fire is not the first insurer to read more into Burgess than the Court intended. In Carter, the Court clarified that the rationale of Burgess is only applicable when the insured has the ability to purchase UIM coverage on the involved vehicle, but declines to do so. Here, Carter purchased UIM on the involved vehicle, and as a Class I insured, he was entitled to stack all available UIM coverage on each vehicle in an amount equal to the coverage on the involved vehicle.

11th Circuit Affirms Dismissal of Class Action Suit Arising From Settlement Of Diminished Value Claims

Diminished value has been a hot button topic in Georgia in recent years.  In State Farm Mut. Auto. Ins. v. Mabry, 274 Ga. 498, 556 S.E.2d 114 (2001), the Georgia Supreme Court effectively established a common law cause of action for recovery of the diminution in value of an automobile following an accident or loss.  Earlier this year, the Georgia Supreme Court expanded the scope of the Mabry decision when it expressly ruled that the holding in that case “is not limited by the type of property insured, but rather speaks generally to the measure of damages an insurer is obligated to pay.”  Royal Capital Dev. LLC v. Maryland Cas. Co., 291 Ga. 262, 263, 728 S.E.2d 234, 235 (2012), reconsideration denied (June 25, 2012).   In other words, diminished value claims could arise outside the auto context. [1]

adjuster-car accidentRecently, the federal courts have been less generous with their handling of diminished value claims.  In Tiller v. State Farm Mut. Auto. Ins. Co. et al, 2013 WL 5878452, the plaintiffs, who had all been involved in automobile accidents in Georgia with State Farm policyholders, filed a diversity lawsuit against State Farm raising claims under Georgia law based on allegations that State Farm did not properly compensate them for the loss in value their vehicles suffered as a result of those accidents. The plaintiffs sought compensatory and punitive damages and injunctive and declaratory relief based on claims of underpayment, fraud, unjust enrichment, and breach of the covenant of good faith and fair dealing.  The United States District Court for the Northern District of Georgia granted State Farm’s Motion to Dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6), and plaintiffs appealed.

Handling Complex Auto Insurance Coverage Disputes: Maximize Recovery Through Stacking Automobile Insurance Policies and Utilizing Uninsured Motorist Offsets

Too often there is an absence of adequate insurance coverage to compensate an injured party involved in a motor vehicle collision.  This proposition holds true even though Georgia law mandates availability of uninsured motorist coverage; thus, the ability for an injured party to secure adequate compensation in the event of a catastrophic automobile collision, frequently turns on insurance coverage litigation.

This article, Handling Complex Auto Insurance Coverage Disputes: Maximize Recovery Through Stacking Automobile Insurance Policies and Utilizing Uninsured Motorist Offsets, addresses complex automobile insurance coverage litigation, including:

  1. Stacking of commercial and personal liability policies;
  2. Recovery against an uninsured motorist; and
  3. Uninsured motorist offsets.

To read the full article, click here

This article also serves as a guide for the practitioner in ascertaining the availability of insurance coverage to compensate the injured party.  This guide is founded upon three fundamental principles critical for resolving automobile insurance coverage disputes – read and understand the terms and conditions of the applicable policies; know the applicable statutory scheme, and learn the facts.  While these principles sound fundamental, and appear self-evident, it is amazing how often they are forgotten, or overlooked.

Georgia Uninsured Motorist Law Governs UM Claim And UM Benefits Awarded Under Umbrella Policy Issued in Indiana

The Georgia Court of Appeals recently held that the Georgia Uninsured Motorist Statute applied to an insurance policy that was issued and delivered in Indiana.  In St. Paul Fire & Marine Ins. Co. v. Hughes, 2013 WL 1924393 (Ga. App.), Appellant St. Paul Fire & Marine Ins. Co. (“St. Paul”) issued a commercial umbrella policy to Townsend Tree Service Co., Inc. (“Townsend”).  One of Townsend’s employees, Appellee Wallace Hughes (“Hughes”), was injured in a motor vehicle accident in August 2005; he sought uninsured/underinsured (“UM”) benefits under the St. Paul umbrella policy.

The trial court granted partial summary judgment to Hughes on his claim that the policy provided UM coverage.  St. Paul appealed, arguing Indiana law applied, and since Indiana law did not require UM coverage at the time the policy was issued, summary judgment in its favor was required.

In its analysis, the Georgia Court of Appeals noted that Georgia’s UM statute in effect at the time of the collision, O.C.G.A. § 33-7-11(a)(a) (2005), applied to policies

“issued or delivered by any insurer licensed in this state upon any motor vehicle then principally garaged or principally used in this state . . . .”

In addition, the statute applied to umbrella policies unless the insured rejected UM coverage in writing.  The court reasoned that because the truck Hughes was driving at the time of the collision was principally used and garaged in Georgia, it was reasonable for the parties to assume that Georgia law applied.

The appellate court thus upheld summary judgment granted in favor of Hughes because St. Paul was licensed in Georgia, the truck was principally used and garaged in Georgia, and there was no written rejection of UM benefits.