Motor vehicle insurance. Gwinnett State Court. Before Judge South.
Carlock, Copeland & Stair, Frederick M. Valz III, Melissa L. Bailey; Moore & Associates, Charis L. Johnson, for appellant.
Steven M. Barnett, for appellee.
BRANCH, Judge. Andrews, P. J., and Miller, J., concur.
Charles Rothman was injured in an automobile accident involving a vehicle driven by Duc Nyguen. The truck driven by Rothman at [332 Ga.App. 671] the time of the accident belonged to his employer, Allgood Services of Georgia. Rothman subsequently filed suit against Nyguen, seeking to recover medical expenses in excess of $53,000 and lost wages in excess of $20,000. Rothman also served the complaint on his personal automobile liability insurance carrier, Allstate Fire and Casualty Insurance Company (" Allstate" ), as well as Allgood's insurer, Westfield Insurance Company (" Westfield" ), in their capacity as uninsured motorist (UM) carriers.
Nyguen was insured by Travelers Indemnity Company under an automobile liability insurance policy with a limit of $100,000. After Travelers paid Rothman the $100,000 available under Nyguen's policy, a dispute arose between Allstate and Westfield as to whether Allstate was entitled to set off the $100,000 Rothman received from Nyguen's insurer against the limits of liability otherwise available under the Allstate policy. As a result of this dispute, Rothman filed a motion in the trial court seeking a determination as to the priority of the UM coverages available under the Allstate and Westfield policies. Following a hearing on that motion, the trial court found that because Allstate had received a premium from Rothman, it was " primarily responsible for compensating [Rothman], without a set-off [against] or reduction [of its policy limits] for any recovery [Rothman received] from [Nyguen's] liability [insurer]." The trial court subsequently certified its order for immediate review, and Allstate filed an application for an interlocutory appeal, which we granted. This appeal followed. For reasons explained more fully below, we reverse the trial court's order.
To understand the current dispute, it is necessary to examine briefly the evolution of UM coverage in Georgia. Prior to 2009, all UM policies issued in Georgia were so-called " reduced by" or " difference in limits" policies which allowed the UM insurer to set off against its policy limits any payments its insured received from the tortfeasor's insurer. See OCGA § 33-7-11 (b) (1) (D) (ii) (2000). Put another way, under these policies, payments received from the tortfeasor's insurer reduced the limits of liability available under the insured's UM coverage. Because prior to 2009 all UM policies were " reduced by" policies, the courts developed stacking rules (also known as priority of payment rules) to be applied in cases where more than one UM policy was available to an injured insured. See Progressive Classic Ins. Co. v. Nationwide Mut. Fire Ins. Co., 294 Ga.App. 787, 788 (670 [332 Ga.App. 672] S.E.2d 497) (2008). These rules are used to determine which policy provides primary coverage and which policies are considered excess. Id. See also Donovan v. State Farm Mut. Auto. Ins. Co.,
329 Ga.App. 609, 611 (765 S.E.2d 755) (2014). Additionally, under these stacking rules, the policy last in line for payment is entitled to the set-off for any payments the insured received from the tortfeasor's insurer. See Donovan, 329 Ga.App. at 611.
Following the development of these stacking rules, the legislature amended the relevant statute effective January 1, 2009. See OCGA § 33-7-11 (b) (1) (D) (2009). Under the current law, insurers are required to offer two types of UM coverage. The first type is " added on" or excess UM coverage, which provides that the applicable limits of liability are available to cover any damages an insured suffers which exceed the tortfeasor's policy limits. See OCGA § 33-7-11 (b) (1) (D) (ii) (I). The second type of available UM coverage is the traditional " reduced
by" coverage, under which the UM limits of liability are reduced by any amount that the insured received from the tortfeasor's insurer. See OCGA § 33-7-11 (b) (1) (D) (ii) (II). Insureds who elect the " reduced by" coverage generally pay a lower premium than that charged for excess or added on UM coverage. See Frank E. Jenkins and ...