Georgia Insurance Defense Lawyer Blog

Posted by Susan J. Levy

Almost the first question claims managers and adjusters ask me about a case is whether we have exposure to punitive damages. In the majority of cases, particularly absent a punitive damage exclusion in the insurance policy, the party most at risk in an auto or trucking case is the employer of the allegedly negligent driver. What follows is a brief summary of Georgia law on the imposition of punitive damages in negligent hiring, retention and entrustment cases.

Under Georgia law, plaintiffs must first prove the underlying tort in order to prevail on a punitive damages claim. Benefit Support, Inc. v. Hall Co., 281 Ga. App. 825 (2006). Both negligent hiring and entrustment claims require the plaintiff to prove that the driver was incompetent at the time the employer hired/entrusted the driver. Western Indus., Inc. v. Poole, 280 Ga. App. 378, 381-82 (2006); Smith v. Tommy Roberts Trucking Co., 209 Ga. App. 826, 828. However, the standard of proof for negligent entrustment and negligent hiring/retention are profoundly different.

Continue reading "CAN WE GET HIT WITH PUNITIVE DAMAGES?" »

Posted by H. Lee Pruett

Answering certified questions from the U.S. Court of Appeals for the Eleventh Circuit, the Georgia Supreme Court recently ruled that when an insurer enters into a defense of its insured without effectively reserving its right to deny coverage, prejudice to the insured is presumed, and the insurer is estopped from asserting noncoverage. In World Harvest Church, Inc. v. GuideOne Mut. Ins. Co., Case No. S10Q0341 (Ga. S. Ct., May 3, 2010), GuideOne insured the church under a general liability policy. The Securities and Exchange Commission sued the church for fraudulent transfer and unjust enrichment stemming from donations to the church from two men who had pled guilty to securities fraud. The action was first brought in federal court in Illinois, and a sister company of GuideOne sent a written reservation of rights to the church and ultimately denied coverage. After dismissal of the Illinois action for lack of jurisdiction, the SEC filed suit in the U.S. District Court for the Northern District of Georgia.

Continue reading "GEORGIA SUPREME COURT CLARIFIES AN INSURANCE COMPANY’S DUTY TO UNEQUIVOCALLY RESERVE ITS RIGHT TO DENY COVERAGE BEFORE DEFENDING ITS INSURED IN THE UNDERLYING LAWSUIT." »

Posted by Wm. Daniel Floyd

INSURANCE COVERAGE/UM STACKING: In cases of conflict between pre-printed and written portions of insurance policy, written portions will prevail. State Farm v. Staton, 286 Ga. 23, 685 S.E.2d 263 (2009)

Cecil Staton was involved in a serious automobile accident suffering serious injuries. The vehicle he was traveling in was owned by his employer, Smyth & Helwys, and insured by State Farm at the time of loss. The State Farm policy identified the “named insured” as the “first person named” on the declarations page. Smyth & Helwys was the first and only name listed on that page. Smyth & Helwys owned two other vehicles which were insured separately by State Farm, but which were not involved in the collision. These additional vehicle policies issued by State Farm also identified Smyth & Helwys as the sole named insured on the respective declarations pages.

Continue reading "INSURANCE COVERAGE/UM STACKING: In cases of conflict between pre-printed and written portions of insurance policy, written portions will prevail." »

Posted by H. Lee Pruett

Justice David Nahmias, the newest member of the Georgia Supreme Court, recently authored an opinion which ruled in favor of the insurer in an important case that sought to determine the meaning of “accident”—and the resulting limits of coverage—when the word is undefined in the policy. Answering a certified question from the U.S. District Court for the Middle District of Georgia, the majority in State Auto Property and Casualty Co. v. Matty, Case No. S09Q1846 (Ga. S. Ct., Mar. 1, 2010), held that when a liability policy leaves “accident” undefined, the court must apply the “cause theory” to determine whether there was more than one accident under the policy. In other words, the court will look to the cause of the injuries, regardless of whether each injury occurred in the same moment of time, rather than the number of resulting injuries. Thus, a limit of liability for one “accident” would apply to all injuries resulting from one proximate cause, and would not be extended to each individual injury.

Continue reading "COURT LOOKS TO CAUSE RATHER THAN EFFECT TO DETERMINE COVERAGE LIMIT IN AN AUTO INSURANCE LIABILITY POLICY THAT LEAVES WORD "ACCIDENT" UNDEFINED" »

Posted by H. Lee Pruett

A recent Georgia case attests to the importance of looking to the allegations of the plaintiff’s complaint in determining potential coverage and the insurance company’s duty to defend a lawsuit. In Nationwide Mut. Fire Ins. Co. v. Kim, Case No. A08A1063 (Ga. Ct. App., Nov. 14, 2008), Chong Yang sued Yong Kim for hitting Yang in the face with an ice cream scoop in a DeKalb County karaoke bar. Yang’s initial complaint alleged an intentional assault and battery. Yang later amended the complaint to delete all factual allegations in the initial complaint and to allege that Kim negligently threw the ice cream scoop in Yang’s direction. Yang sought compensatory and punitive damages. Nationwide Insurance Company insured Kim under a homeowner’s policy. Nationwide entered into a defense of Kim under a reservation of rights and filed a declaratory judgment action seeking a judgment of non-coverage based on the intentional act exclusion in the policy.

Continue reading "IN LAWSUIT ARISING OUT OF KARAOKE BAR INCIDENT, GEORGIA COURT OF APPEALS RULES INTENTIONAL ACT EXCLUSION INAPPLICABLE AND INSURANCE COMPANY MUST DEFEND ITS INSURED " »