United States District Court, M.D. Georgia, Macon Division
T. TREADWELL, JUDGE UNITED STATES DISTRICT COURT.
Defendants-Laura Whitaker, individually, and Laura and
Jeffrey Whitaker, on behalf of their minor child, Liza
Whitaker-move the Court to reconsider its June 9, 2017 Order
(Doc. 16), denying their motions to dismiss (Docs. 10; 11).
filed this declaratory judgment action to determine its
uninsured/underinsured motorist (UM) liability as to claims
arising from an August 20, 2016 vehicle collision, in which
both Laura and Liza Whitaker were injured. Doc. 1
¶¶ 7, 21, 22. One “Levi Griggs”
negligently caused the collision. Id. ¶ 7. The
Defendants settled with Griggs and his liability insurance
carrier for the policy limits, executing a limited liability
release in their favor. Id. ¶ 9; see
also Docs. 14-1, 14-2. According to the complaint, both
Liza and Laura Whitaker assert that Travelers owes them UM
coverage; the Defendants have offered to settle Liza's
claims for $250, 000, the policy limit. Id.
¶¶ 10, 12. Travelers seeks a declaratory judgment
that it owes no coverage because Liza and Laura, though
relatives of the policy holders, J. Greg and Linda B.
Whitaker-the parents of Jeffrey Whitaker, in-laws of Laura
Whitaker, and grandparents of Liza Whitaker-do no reside with
them, and thus are not insured under their policy with
Travelers. Id. ¶¶ 17-18. Travelers states
it is uncertain as to its duties and obligations under the
policy in light of the Defendants' demands. Id.
Defendants seek reconsideration because, in their view, the
Court “has failed to consider and rule on [their]
significant pretrial motion particularly challenging
jurisdiction of this court, and the failure of plaintiff
TRAVELER'S to state a cause or claim.” Doc. 17 at
2, 4. But that is not the case. The Court considered the
Defendants' motions, and found (and still finds) them, as
well as the motion for reconsideration, without merit.
the Defendants' assertions that declaratory action is not
appropriate here are incorrect. The Defendants argue that
there is no “case in controversy” because, under
Georgia law, a party is not entitled to make a claim against
an UM carrier without first obtaining a judgment against the
at-fault motorist. Docs. 10 at 13-14; 11 at 13-14; 17 at 5-6.
This is incorrect. Under Georgia law, “a party must
exhaust available liability coverage before recovering under
a UM policy.” Daniels v. Johnson, 270 Ga. 289,
290, 509 S.E.2d 41, 42 (1998). Before 1992, that meant
getting a judgment against the tortfeasor; but, for the last
twenty-five years, a “plaintiff [that] settles for the
limits of the policy as stated in the policy and executes a
limited release in accordance with O.C.G.A.
§ 33-24-41.1 . . . may pursue its UM
claim.” Id. at 291, 509 S.E.2d at
43.The cases cited by the Defendants to the
contrary are either superseded by O.C.G.A.
§ 33-24-41.1 or did not involve a properly
executed release thereunder. Here, as the Defendants contend
in their demand letters, they are entitled to pursue this
claim because Griggs and his liability carrier executed a
limited liability release. Docs. 14-1; 14-2. The Court is
concerned that the Defendants recognized this point in their
demand letters, but fail to acknowledge it now.
even if the Defendants were correct in asserting that any
action by them against Travelers is unripe for declaratory
relief, this contention is beside the point. Under binding
federal law, which governs this procedural matter, an insurer
may seek a declaration that it owes no coverage as to a
potential UM claim irrespective of whether the claimant has
previously obtained a judgment against the at-fault motorist.
Cincinnati Ins. Co. v. Holbrook, 867 F.2d 1330, 1332
(11th Cir. 1989) (“Assuming, arguendo, that the
district court correctly interpreted the law of Georgia to
provide that an insurer cannot seek declaratory relief in
Georgia as to its obligation under uninsured motorist
coverage unless and until the tort liability of the uninsured
motorist to the insured has been adjudicated, an invocation
of the federal Declaratory Judgment Act, 28 U.S.C.
§§ 2201, 2202, is neither precluded nor controlled
by Georgia's procedural law.”), abrogated on
other grounds by Wilton v. Seven Falls Co., 515 U.S.
277, 289 (1995).Accordingly, Travelers is entitled to seek
declaratory relief regarding its coverage of the
Defendants' UM claims even though no judgment has been
entered against the at-fault motorist, Griggs.
Defendants' motions assert that declaratory relief is
inappropriate because Travelers “has denied coverage by
its conduct, including the filing of this lawsuit.”
Docs. 10 at 12; 11 at 12. Obviously the insurer, in its
declaratory judgment action, takes the position that there is
no coverage. To equate this to a denial of coverage
precluding such a declaratory judgment action is nonsense.
Rather, if Traveler's allegations are true-and the
Defendants have offered no evidence to the contrary-then
Travelers did not deny coverage precluding this action.
Defendants also argue that there is no controversy warranting
declaratory relief as to Laura because no written demand was
made on Laura's behalf. Doc. 17 at 7. The Defendants do
not contend that Laura, unlike Liza, does not have
uncompensated injuries from the accident or offer any reason
why Liza, but not Laura, would be entitled to UM coverage
under the policy. Under these facts, a demand by Laura is
unnecessary to create an actual controversy.
the Defendants have offered no meritorious argument that this
declaratory judgment action is improper.
the Defendants' assertion that this action must
necessarily violate the complete diversity rule is similarly
incorrect. Yes, if the named
insureds of the automobile policy at issue-J. Greg and Linda
B. Whitaker-were necessary parties to this litigation that
must be joined as involuntary plaintiffs, complete diversity
would be destroyed. But the Defendants offer no reason why J.
Greg and Linda B. Whitaker are necessary parties, let alone
why their interests would be adverse to the Defendants'.
amount in controversy as to Liza Whitaker appears to be at
least $250, 000, which exceeds $75, 000. See Docs. 1
¶¶ 3, 12; 14 at 2; 14-1; 14-2; 14-3. Accordingly,
the Court has diversity jurisdiction under 28 U.S.C. §
1332 as to Travelers's claim regarding Liza's
injuries. The Court, correspondingly, has supplemental
jurisdiction under 28 U.S.C. § 1367 as to
Travelers's claim regarding Laura's injuries.
Court correctly denied the Defendants' motions to dismiss
because the Court has jurisdiction to enter the declaratory
relief sought by Travelers. The Defendants' motion for
reconsideration (Doc. 17) is accordingly