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U-Haul Company of Arizona v. Rutland

Court of Appeals of Georgia, Fifth Division

February 22, 2019

U-HAUL COMPANY OF ARIZONA et al.
v.
RUTLAND et al. RUTLAND et al.
v.
U-HAUL COMPANY OF ARIZONA et al.

          MCFADDEN, P. J., RICKMAN and MARKLE, JJ.

          MARKLE, JUDGE.

         Charles Rutland was killed in a tragic auto accident involving a truck driven by Joshua Mayberry that was owned by U-Haul of Arizona ("UHAZ"), registered in Arizona, and rented from U-Haul of Georgia ("UHGA"). Margaret Rutland, as Charles's surviving spouse, filed suit against UHAZ and UHGA (collectively, "the U-Haul defendants"), along with Mayberry, Stephanie Crocker, who had rented the truck, and Sarah Wolf, the named driver on the rental agreement (collectively, "the individual defendants"). As is relevant to these appeals, in Count VI of the complaint, Rutland sought a declaratory judgment that UHAZ and UHGA did not qualify as self-insurers under OCGA §§ 33-34-2 (4) and 33-34-5.1, and thus the U-Haul defendants could be liable for damages in excess of the minimum insurance coverage provisions.[1]See OCGA § 33-34-3. The U-Haul defendants moved to dismiss on the grounds that they were not required to register as a self-insurer and that there was no actual controversy that would authorize the trial court to issue a declaratory judgment. Thereafter, Mayberry moved for a stay of proceedings and a protective order, and Rutland moved the trial court to take judicial notice of the U-Haul defendants' recent filings with the Georgia Commissioner of Insurance.

         The trial court (1) denied the U-Haul defendants' motions to dismiss the declaratory judgment count; (2) granted Rutland's motion for judgment on the pleadings; (3) granted defendant Mayberry's motion to stay the proceedings and for a protective order; and (4) granted in part Rutland's motion to take judicial notice of UHAZ's filing with the Georgia Insurance Commissioner. The trial court issued a certificate of immediate review, and this Court granted the U-Haul defendants' application for interlocutory review. These appeals followed.

         After a thorough review of the record and the relevant statutory provisions, we conclude that the trial court erred in denying the U-Haul defendants' motion to dismiss because the declaratory judgment action was improper. Accordingly, we reverse the trial court's order in Case No. A18A2037 and remand the case with instructions to dismiss the declaratory judgment count of the complaint. As to the cross-appeal in Case No. A18A2038, we conclude that the trial court abused its discretion by failing to review each of Mayberry's assertions of his Fifth Amendment right. Accordingly, we vacate the trial court's order granting the protective motion and remand the case for further proceedings. We also conclude that any allegation of error in staying the proceedings is moot because the stay has now lapsed. Finally, in light of our conclusion in Case No. A18A2037 that the declaratory judgment action against the U-Haul defendants was not properly before the trial court, Rutland's claim that the trial court should have taken judicial notice of all the documents the U-Haul defendants submitted to the Insurance Commissioner is also moot.

A motion to dismiss for failure to state a claim upon which relief may be granted should not be sustained unless (1) the allegations of the complaint disclose with certainty that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof; and (2) the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought. In deciding a motion to dismiss, all pleadings are to be construed most favorably to the party who filed them, and all doubts regarding such pleadings must be resolved in the filing party's favor. In other words, a motion to dismiss for failure to state a claim should not be granted unless it appears to a certainty that the plaintiff would be entitled to no relief under any state of facts which could be proved in support of his claim. If, within the framework of the complaint, evidence may be introduced which will sustain a grant of relief to the plaintiff, the complaint is sufficient.

(Citations and punctuation omitted.) Austin v. Clark, 294 Ga. 773, 774-775 (755 S.E.2d 796) (2014). We review de novo a trial court's ruling on a motion to dismiss. Walker Co. v. Tri-State Crematory, 292 Ga.App. 411 (664 S.E.2d 788) (2008).

         So viewed, the record shows that Crocker rented a U-Haul truck from UHGA on October 4, 2015. Crocker signed the rental agreement and paid cash for the truck for a two-day rental period. At no time did UHGA ask Crocker if she had or wished to purchase insurance, and neither Crocker nor Mayberry possessed any other automobile insurance. Mayberry drove the truck out of UHGA's lot.

         Crocker and Mayberry did not return the truck at the end of the rental period on October 6. On October 8, Mayberry was driving the truck when he crossed the center line and struck Charles Rutland's vehicle head on, killing Charles. The police report alleged that Mayberry was under the influence of drugs or alcohol at the time of the accident. Mayberry was arrested and indicted for homicide by vehicle, driving under the influence, and reckless driving, among other charges.

         Margaret Rutland, Charles's widow, sued the U-Haul defendants, Crocker, Mayberry, and Wolf, for wrongful death, negligent entrustment, and punitive damages. She also sought a declaratory judgment to establish that UHAZ and UHGA did not qualify as self-insurers and thus there was no cap on their liability for damages. Along with the complaint, Rutland served her initial discovery requests on the U-Haul defendants and Mayberry.

         The U-Haul defendants answered and moved to dismiss the complaint. Rutland opposed the motions and moved for judgment on the pleadings with respect to the declaratory judgment counts.

         Mayberry remained incarcerated while the civil suit proceeded. In response to many of the various discovery requests, Mayberry invoked his Fifth Amendment right against self-incrimination. Mayberry and the U-Haul defendants also moved for a protective order under OCGA § 9-11-26 (c), and for a stay of discovery pending the outcome of Mayberry's criminal case.

         Rutland opposed the motions for a stay and protective order and moved to compel discovery. She asserted that Mayberry had waived his right against self- incrimination by speaking to investigators after the accident, and that opposing counsel deliberately withheld this information from her. Thus, Rutland filed a "motion for emergency relief," seeking in camera review or an evidentiary hearing to evaluate Mayberry's claims of privilege. She further requested sanctions under OCGA § 9-11-37 (d). Mayberry disputed that he had waived his Fifth Amendment rights, and he sought sanctions against Rutland under OCGA § 9-15-14 for unnecessarily expanding the litigation with the emergency motion.

         Rutland also moved the trial court to take judicial notice of UHAZ's July 2016 filing of self-insurance with the Georgia Commissioner of Insurance. The U-Haul defendants subsequently amended their answer to disclose an insurance policy underwritten by Repwest Insurance Company, which the U-Haul defendants alleged was designed to cover the minimum limits of coverage.[2]

         Following a hearing on the motions to dismiss, the trial court denied the U-Haul defendants' motions and granted Rutland's motion for judgment on the pleadings. Specifically, the trial court found that the U-Haul defendants were not self-insurers as that term is defined in OCGA § 33-34-2 (4) because they had not filed their insurance plan with the Georgia Insurance Commissioner, and that they had failed to offer "spot" insurance at the time of rental. The trial court reviewed the Repwest policy, which the U-Haul defendants submitted to establish they possessed sufficient coverage, and concluded that it would not qualify as "spot" insurance. Thus, the trial court found that the U-Haul defendants had not limited their liability to the minimum coverage amount.

         By separate order that same day, the trial court granted the motion for protective order and stayed the pending lawsuit as it pertained to Mayberry, and denied Rutland's motions for emergency relief and to compel discovery. The trial court concluded that Mayberry was entitled to assert his Fifth Amendment right against self-incrimination, and that he had not waived that right by speaking with investigators before the instant lawsuit had been filed. The trial court reserved any ruling on attorney fees.

         As to Rutland's request that the trial court take judicial notice of UHAZ's 2016 filing with the Insurance Commissioner, the trial court granted the request to take judicial notice of the fact that UHAZ was listed and approved as a self-insurer. The trial court declined, however, to take judicial notice of the application and self-insurance plan UHAZ submitted to the Insurance Commissioner.

         The trial court issued a certificate of immediate review, and this Court granted the U-Haul defendants' application for interlocutory review. These appeals followed.

         1. The U-Haul defendants argue that, in denying their motion to dismiss and granting the declaratory judgment, the trial court misapplied the statutory provisions as to motor vehicle liability insurance. We agree that the trial court erred in denying the motion to dismiss, albeit on different grounds -- we find that the declaratory judgment action against the U-Haul defendants was improper at this stage of the litigation.

         The parties argued before the trial court as to whether Rutland could bring a declaratory judgment action directly against the U-Haul defendants when the underlying civil case against Mayberry and the individual defendants remained pending. The trial court resolved that issue in favor of Rutland, concluding that "Rutland is a third-party beneficiary of legislatively-mandated financial responsibility laws and so is authorized to seek declaratory relief to resolve this disagreement over the extent of the U-Haul Defendants' potential liability." We disagree.

         Under the Declaratory Judgment Act ("the Act"), OCGA § 9-4-2,

(a) In cases of actual controversy, the respective superior courts of this state shall have power, upon petition or other appropriate pleading, to declare rights and other legal relations of any interested party petitioning for such declaration, whether or not further relief is or could be prayed; and the declaration shall have the force and effect of a final judgment or decree and be reviewable as such.
(b) In addition to the cases specified in subsection (a) of this Code section, the respective superior courts of this state shall have power, upon petition or other appropriate pleading, to declare rights and other legal relations of any interested party petitioning for the declaration, whether or not further relief is or could be prayed, in any civil case in which it appears to the court that the ends of justice require that the declaration should be made; and the declaration shall have the force and effect of a final judgment or decree and be reviewable as such.

         Subsection (a) speaks of "cases of actual controversy." As we have explained, "[t]he existence of an actual controversy is fundamental to a decision on the merits by this court." (Citation omitted.) Richards v. State Farm Mut. ...


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