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Flanders v. Jackson

Court of Appeals of Georgia, Fourth Division

February 9, 2018

FLANDERS et al.
v.
JACKSON.

          RAY and SELF, JJ.

          Dillard, Chief Judge.

         Jamie Flanders's son, James Raper, died in an automobile accident. As administratrix of her son's estate, Flanders sued Dequavus Jackson, alleging that his negligent operation of a vehicle resulted in Raper's death. Jackson later filed for bankruptcy, and after Flanders obtained an order allowing her lawsuit to proceed, Jackson moved for partial summary judgment, arguing that his bankruptcy discharge limited liability to his insurance policy's available coverage. The trial court granted Jackson's motion, and on appeal, Flanders contends that the trial court erred in ruling that Jackson's bankruptcy discharge precludes her from seeking an excess judgment and in granting partial summary judgment before she could depose Jackson. For the reasons set forth infra, we agree that Jackson's bankruptcy discharge does not preclude Flanders from seeking an excess judgment against him, and thus, we reverse.

         Viewed in the light most favorable to Flanders (i.e., the nonmoving party), [1] the record shows that on March 29, 2015, Flanders's 16-year-old son, Raper, was a passenger in Jackson's vehicle, when Jackson lost control while rounding a curve on a road in rural Cook County at an excessive speed. After Jackson lost control, his vehicle careened off the road and flipped over, ejecting Raper from the backseat. As a result, Raper suffered fatal injuries.

         At the time of the accident, Jackson and the vehicle he was driving were insured by his mother's automobile insurance policy with State Farm, which provided liability limits of $25, 000 per person. And prior to filing her lawsuit, Flanders made a policy-limits demand to State Farm, which the insurer ultimately rejected. Then, on March 29, 2016, Flanders-as Raper's mother and the administratrix of his estate-filed a wrongful-death action against Jackson in the Superior Court of Cook County. Approximately two weeks later, Jackson filed an answer and discovery ensued.

         On July 8, 2016, Jackson-who was 18 years old and living in his mother's home at the time of the accident-filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Middle District of Georgia, listing Flanders's lawsuit as a dischargeable debt. As a result, Flanders's lawsuit was automatically stayed under 11 USC § 362.[2] Notably, the bankruptcy trustee's report of possible assets included a "Possible Bad Faith Claim, " which the trustee acknowledged currently had an unknown value.

         Thereafter, on September 7, 2016, the bankruptcy court entered a consent order modifying the automatic stay and permitting Flanders's wrongful-death action to proceed. The order, in part, specifically provided: "Neither this Order nor any act of the Movant taken pursuant to such order, shall prejudice, impair or affect in any way any rights relating to any bad faith claim or judgment against the Debtor's insurer(s) arising in connection with the claim that is the subject of the Superior Court Action." Then, on October 27, 2016, the bankruptcy court entered an order of discharge as to Jackson's bankruptcy, which provided that most of his debts were discharged and, thus, that creditors could not collect such debts. But the order also noted that the discharge would not "stop creditors from collecting from anyone else who is also liable on the debt, such as an insurance company or a person who cosigned or guaranteed the loan."

         On December 12, 2016, Jackson filed a motion for partial summary judgment, arguing that his bankruptcy discharge limited his personal liability to the State Farm insurance policy's available coverage of $25, 000. Flanders filed a response, arguing that the trial court should defer ruling on Jackson's motion until after he was deposed. In addition, Flanders argued that Jackson's bankruptcy discharge did not preclude her from seeking a judgment in excess of the insurance policy limits as a precursor to establishing State Farm's liability for a potential bad-faith-failure-to-settle claim.

         Shortly thereafter, Jackson moved for a protective order to prevent Flanders from deposing him, in light of the criminal proceedings pending against him as a result of the accident. Flanders filed an objection, but without ruling on Jackson's motion for a protective order, the trial court granted Jackson's motion for partial summary judgment, determining that, as a result of Jackson's bankruptcy discharge (which prohibited any act to collect a judgment against the property of Jackson), "any judgment rendered in this case shall be limited to $25, 000.00." This appeal follows.

         1. Flanders contends that the trial court erred in granting partial summary judgment, arguing that Jackson's bankruptcy discharge did not preclude her from seeking a judgment in excess of the insurance policy limits. We agree.

         In order to adequately address Flanders's contention on appeal, a brief discussion is warranted regarding the type of bad-faith claim the trial court's partial summary judgment grant implicitly precludes. As a general rule, a plaintiff does not have standing to "bring a direct action against a defendant's insurance company unless the plaintiff has obtained a judgment against the defendant that remains unsatisfied."[3] And importantly, an insurance company may be liable for "the excess judgment entered against its insured based on the insurer's bad faith or negligent refusal to settle a personal claim within the policy limits."[4] Moreover, under Georgia law, an insured may assign a bad-faith-refusal-to-settle claim to the injured plaintiff with a tort claim against the insured.[5]

         Here, in its motion for partial summary judgment, Jackson argued-and the trial court agreed-that his bankruptcy discharge precludes Flanders from seeking a judgment in excess of the $25, 000 State Farm policy limits and, therefore, obviates any potential bad-faith-refusal-to-settle claim. But this argument appears to be based on a rather broad and ultimately incorrect application of the relevant bankruptcy statute, 11 USC § 524.

         Tasked with interpreting statutory language, we necessarily begin our analysis with "familiar and binding canons of construction."[6] First and foremost, in considering the meaning of a statute, our charge as an appellate court is to "presume that the [legislature] meant what it said and said what it meant."[7] And toward that end, we must afford the statutory text its plain and ordinary meaning, [8] consider the text contextually, [9] read the text "in its most natural and reasonable way, as an ordinary speaker of the English language would, "[10] and seek to "avoid a construction that makes some language mere surplusage."[11] In summary, when the language of a ...


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