Articles Posted in INSURANCE COVERAGE

Published on:

The Georgia Supreme Court recently held in Georgia Farm Bureau Mutual Insurance Co. v. Smith et al., No. S15G1177 (Ga. March 21, 2016), that lead paint unambiguously qualifies as a pollutant and that personal injuries from ingesting the paint were excluded from coverage by the plain language of the commercial general liability (CGL) policy’s absolute pollution clause.
Continue reading

Published on:

Sometimes, what you don’t know can’t hurt you. That was the insured’s argument on appeal in a recent declaratory judgment action in which the liability insurer sought to be excused from defending an underlying lawsuit because the insured failed to notify the insurer of the accident until after the lawsuit was filed. In Forshee v. Employers Mut. Cas. Co., Case No. A11A0092 (Ga. App. Apr. 28, 2011), the insured, Johnny and Elizabeth Forshee, owned a service station and convenience store. On November 23, 2007, a customer fell as she walked toward the store. Mr. Forshee did not see the woman fall, but he saw her on the ground, and he went out to help her up. The woman went back to her car and may have mentioned that her arm was hurting. When Mr. Forshee offered to call for medical assistance, however, the woman refused. She told him she was going home, and she left. No one at the store knew the woman or how to get in touch with her, and she never contacted the store. The Forshees did not report the accident to their insurer, Employers Mutual Casualty Company. It was only when the woman filed and served her lawsuit two years later that the Forshees learned that the woman had broken her arm and sought treatment on the day of the accident.
Continue reading

Published on:

Posted by Susan J. Levy

While those of us typically on the defense side of the bar like to think we can protect the jury from learning that our client has liability insurance, to large measure, we really can’t. Juries are typically pre-qualified as to whether they are shareholders, officers, directors or employees of the defendant’s liability carrier. In cases involving mutual insurance companies, jurors are also pre-qualified as to whether they or their family members are policy holders of the defendant’s Insurer.
Continue reading

Published on:

Posted by H. Lee Pruett

A recent telephone call from an acquaintance who happens to be a plaintiffs’ lawyer prompted a little research on my part to determine an insurance company’s obligations to provide uninsured motorist coverage, and how to know whether the coverage is “traditional” or “add-on.” With traditional UM, the insurance company is entitled to a setoff for any underlying liability coverage. For example, if the defendant driver has $25,000 in liability limits, and the plaintiff has $25,000 in UM coverage, the UM carrier has no exposure (assuming the liability carrier made no direct payments to satisfy any federal benefits liens). With add-on UM, the insurer would provide the full $25,000 in coverage after the defendant carrier’s payment of the liability limit. How do you know whether the plaintiff has traditional or add-on UM coverage?
Continue reading

Published on:

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

Published on:

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

Published on:

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

Published on:

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

Published on:

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