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Jones v. Federated Mutual Insurance Co.

Court of Appeals of Georgia, First Division

June 13, 2018


          BARNES, P. J., MCMILLIAN and REESE, JJ.

          Barnes, Presiding Judge.

         Verlinda and Kevin Jones appeal the summary judgment entered against them and in favor of Federated Mutual Insurance Company. They contest the trial court's ruling that they were validly excluded from uninsured motorist coverage provided by a policy issued by that company. For reasons that follow, we affirm.

         Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." OCGA § 9-11-56 (c). "In our de novo review of the grant of a motion for summary judgment, we must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant." (Citation and punctuation omitted.) Cowart v. Widener, 287 Ga. 622, 624 (1) (a) (697 S.E.2d 779) (2010).

         So viewed, the record shows the following. On April 3, 2015, the Joneses were test-driving a car owned by Five Star Automotive Group, when that car was rear-ended by a vehicle being driven by Rashod Lamar. Neither of the Joneses had a personal automobile insurance policy. Seeking to recover damages for alleged injuries from the car wreck, the Joneses filed the instant action. They named Lamar as a defendant, and they served a copy of the action upon Federated Mutual, with which Five Star had an insurance policy ("Policy") at the time of the collision.[1] The Joneses accepted the liability limits from Lamar's insurer and executed a limited liability release pursuant to OCGA § 33-24-41.1, [2] thereby exhausting all liability coverage.[3] Maintaining, however, that their medical bills stemming from the car wreck exceeded the amounts received from Lamar's insurer, the Joneses sought uninsured motorist coverage under the Policy pursuant to OCGA § 33-7-11, the Georgia Uninsured Motorist Act ("UM Statute").[4]

         Federated Mutual moved for summary judgment, asserting that the Policy afforded the Joneses no uninsured motorist coverage. In support of its motion, Federal Mutual presented evidence that when Five Star procured the Policy and thus decided the scope of coverage it would obtain, Five Star's authorized representative executed a "Georgia Commercial Automobile Uninsured Motorists Coverage Option Form" (the "Uninsured Motorist Provision") selecting thereon a $1, 000, 000 uninsured motorist coverage limit for "directors, officers, partners or owners of the named insured and family members who qualify as an insured." On that same form, as Federated Mutual further pointed out, Five Star's authorized representative expressly rejected uninsured motorist coverage for "any other person who qualifies as an insured." At the time of the collision, as the Joneses stipulated, neither of them was a director, officer, owner, or partner of Five Star, nor was either a family member of any Five Star director, officer, owner, or partner.

         Notwithstanding, the Joneses opposed Federated Mutual's motion on grounds that the Uninsured Motorist Provision - which resulted in "tiered" uninsured motorist coverage (for different groups of individuals) - was void as contravening both the plain language of the UM Statute and Georgia's public policy. Therefore, the Joneses urged that the $1, 000, 000 option applied to them each as an "insured" in accordance with the UM Statute.

         After a hearing, the trial court ruled in favor of Federated Mutual. It ascertained that the plain terms of the Uninsured Motorist Provision revealed the contracting parties' intent to exclude uninsured motorist coverage for persons such as the Joneses. And in rejecting the Joneses' arguments that the Uninsured Motorist Provision was void, the trial court relied on Crouch v. Federated Mut. Ins. Co., 257 Ga.App. 604 (571 S.E.2d 574) (2002), which upheld tiered uninsured motorist coverage (for different groups of individuals) as contravening neither law nor public policy. Id. at 606 (a). The trial court granted Federated Mutual's summary judgment motion, and the Joneses appeal.

         1. We first review the applicable statutory and contractual framework. "In Georgia, an insurer may fix the terms of its policy as it wishes, insuring against certain risks and excluding others, provided the terms are not contrary to law." Hurst v. Grange Mut. Cas. Co., 266 Ga. 712, 716 (4) (470 S.E.2d 659) (1996).

When an uninsured motorist policy provision is in conflict with the clear intent of OCGA § 33-7-11, the policy provision is unenforceable and the statute controls. Exclusions in uninsured motorist endorsements cannot circumvent the clear mandate of the [UM Statute] by withholding the protection required.

(Citations and punctuation omitted.) Dees v. Logan, 282 Ga. 815, 816 (653 S.E.2d 735) (2007); see Hartford Accident & Indem. Co. v. Booker, 140 Ga.App. 3, 4 (1) (230 S.E.2d 70) (1976).

         In relevant part, the UM Statute states in paragraph (a) (1), "No automobile liability policy or motor vehicle liability policy shall be issued or delivered in this state . . . unless it contains an endorsement or provisions undertaking to pay the insured damages for bodily injury . . . sustained from the owner or operator of an uninsured motor vehicle. . . ." But paragraph (a) (3) of the UM Statute states, "The coverage required under paragraph (1) of this subsection shall not be applicable where any insured named in the policy shall reject the coverage in writing." Together, these paragraphs provide that uninsured motorist "coverage must appear in every [automobile liability] policy unless rejected in writing by the insured named in the policy." Doe v. Rampley, 256 Ga. 575, 577 (1) (351 S.E.2d 205) (1987); see also Jones v. Ga. Farm Bureau Mutual Ins. Co., 248 Ga.App. 394, 396 (546 S.E.2d 791) (2001) ("Although an insurer is required to offer [uninsured motorist] coverage initially, a insured is not required by the statute to carry [uninsured motorist] coverage.").

         We thus turn to the Policy because "[courts] must employ the standard rules of contract construction to determine the meaning of the provisions of an insurance policy." Owners Ins. Co. v. Smith Mechanical Contractors, 285 Ga. 807, 808 (2) (683 S.E.2d 599) (2009). In this case, the named insured was Five Star. Where, as here, "the terms and conditions of an insurance contract are clear and unambiguous, they must be given their literal meaning." Adams v. Atlanta Cas. Co., 235 Ga.App. 288, 289 (1) (509 S.E.2d 66) (1998); see Smith v. Stoddard, 294 Ga.App. 679, 682 (1) (b) (669 S.E.2d 712) (2008) ("Under Georgia law, contracts of insurance are interpreted by ordinary rules of contract construction. Where the terms are clear and unambiguous, and capable of only one reasonable interpretation, the court is to look to the contract alone to ascertain the parties' intent.") (citation and punctuation omitted). Accordingly, the trial court correctly ascertained that the plain terms of the Uninsured Motorist Provision revealed that the contracting parties intended to exclude uninsured motorist coverage for persons such as the Joneses. See Crouch, 257 Ga.App. at 607-608 (c) (rejecting injured motorist's claim of entitlement to pursue maximum amount of uninsured motorist coverage provided by a tiered policy, where the language of the policy plainly excluded the motorist from that option). Even the Joneses acknowledge in their appellate brief that, in executing the Uninsured Motorist Provision, "Five Star chose to provide significant protection to its own owners and directors [and other designated individuals, ] while totally excluding all others who would obviously[5] be using the vehicles."

         2. In an effort to escape the summary judgment ruling and to establish that the $1, 000, 000 option of uninsured motorist coverage applies to them, the Joneses reassert on appeal that the Uninsured Motorist Provision is void as contravening: (a) the UM Statute; and (b) Georgia's public policy. See generally Merrill v. Lee, 301 Ga. 34, 36 (2) (799 S.E.2d 169) (2017) ("Parties may establish contract terms on any subject matter in which they have an ...

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