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National Indemnity Co. v. Lariscy

Court of Appeals of Georgia, First Division

October 23, 2019

NATIONAL INDEMNITY COMPANY
v.
LARISCY

          BARNES, P. J., MERCIER and BROWN, JJ.

          Barnes, Presiding Judge.

         After John Wayne Lariscy was injured in an accident with a semi tractor trailer truck, Lariscy and his wife filed a complaint and amended complaint for damages in Screven County State Court against several defendants, including David Burke, d//b/a D & J Trucking, its insurer, National Indemnity Company, and the truck driver, Dennis Stewart. National Indemnity filed its answer, defenses, and a counterclaim and cross-claim for a declaratory judgment as to its duties and obligations under the insurance policy. National Indemnity also asserted that the superior court rather than the state court had subject matter jurisdiction over its counterclaim and cross-claim for a declaratory judgment. National Indemnity subsequently filed a motion for summary judgment in which it asserted that there was no coverage under the policy because the driver was an "excluded driver" under the policy and also that the uppermost limit of any coverage in this case should be the $100, 000 mandated by Georgia law. After stating in an email that it lacked subject matter jurisdiction, the trial court entered an order in which National Indemnity's motion was denied "in the entirety" without further explanation. Following this Court's grant of National Indemnity's application for interlocutory appeal, this appeal ensued. For the reasons discussed below, we vacate the trial court's order and remand for further action consistent with this opinion.

         Summary judgment is appropriate when no genuine issues of material fact remain and the movant is entitled to judgment as a matter of law. Wooden v. Synovus Bank, 323 Ga.App. 794, 794 (748 S.E.2d 275) (2013). This Court reviews the denial of summary judgment de novo, construing the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Birnbrey, Minsk & Minsk, LLC v. Yirga, 244 Ga.App. 726, 726 (535 S.E.2d 792) (2000). "We do not resolve disputed facts, reconcile the issues, weigh the evidence, or determine its credibility, as those matters must be submitted to a jury for resolution." Tookes v. Murray, 297 Ga.App. 765, 766 (678 S.E.2d 209) (2009).

         So viewed, the record demonstrates that in the early morning of December 10, 2013, a semi tractor trailer owned by D & J Trucking, and driven by Stewart, was hauling logs when Lariscy's vehicle collided with the logs extending from the back of the semi. Lariscy sustained severe and permanent personal injuries, [1] including a spinal cord injury, and at the time of the filing of the complaint, had incurred medical expenses in excess of one million dollars. Lariscy and his wife (hereinafter collectively "Lariscy") filed a complaint for damages against several defendants, including, Burke, D & J Trucking, and its insurer, National Indemnity Company, in the State Court of Screven County. National Indemnity filed its answer and defenses in which it admitted that the company owned the truck at issue, that the truck was hauling cut logs on the day of the accident, that the accident occurred, and that it provided liability insurance for the truck. National Indemnity also claimed as a defense, counterclaim and cross-claim that the state court lacked subject matter jurisdiction to declare its rights and responsibilities pursuant to Georgia's Declaratory Judgment Act, including whether it owed a defense or indemnity to Burke, or the amount of coverage due beyond the statutory minimum limits required in Georgia. It further asserted that the superior court had exclusive jurisdiction over its counter claim and cross-claim pursuant to the Declaratory Judgment Act.

         National Indemnity thereafter attempted to remove the case to federal court "on the basis of federal question jurisdiction." However, when National Indemnity amended its notice of removal to note that it had erroneously stated that D & J Trucking had agreed to removal of the action to federal court, the parties consented to remanding the case back to the state court. The resulting order closed the case in federal court.

         National Indemnity subsequently moved for summary judgment, arguing that there was no coverage for the incident because the policy's Driver Exclusion Endorsement Form M-3841 stated that "[t]his policy does not apply to any claim or loss arising from accidents or occurrences involving any covered auto while being driven or operated by Dennis Stewart." It also asserted that the uppermost limit of any coverage in this case should be the minimum coverage mandated by Georgia law of $100, 000 rather than the minimum limits of $750, 000 prescribed by the Federal Motor Carrier Safety Administration ("FMCSA"). See 49 CFR § 387.9 According to National Indemnity, the statutory minimum limits under FMCSA did not apply because the policy did not include an "MCS-90 Endorsement, "[2] which would have raised the liability limits to $750, 000. It further asserted that the MCS-90 Endorsement does not apply to purely intrastate trips or to the transport of agricultural goods, including logs.

         National Indemnity noted that the policy did include a "Form F Uniform Motor Carrier Bodily Injury and Property Damage Liability Insurance Endorsement."[3] Thus, it maintained, notwithstanding the driver exclusion provision, the uppermost limit of its liability would only be the Georgia minimum of $100, 000.

         Lariscy opposed the motion for summary judgment, arguing that the state court lacked subject matter jurisdiction to determine the issues raised by the Company, which were issues to be resolved by means of a declaratory judgment in superior court, and alternatively, that there was a clear duty to defend, that a MCS-90 endorsement increasing liability limits to $750, 000 should be applied because the Company was operating in interstate commerce, and that at a minimum, National Indemnity was obligated to pay $100, 000. In response, the trial court emailed the parties the following:

In considering the briefs in the above motion, the Court determines that [National Indemnity's] motion is asking the court to determine whether or not a driver was an excluded driver and to determine coverage. I do not feel these are questions for determination by Summary Judgment, but should be determined by Declaratory Judgment action. The Court DENIES the motion for Summary Judgment and [Lariscy] is asked to prepare an order in accordance herewith.

         However, the resulting order simply stated that the summary motion was "denied in its entirety." Upon National Indemnity's motion, the trial court issued a certificate of immediate review, and after this Court's grant of interlocutory review, this appeal ensued.

         National Indemnity contends that the trial court erred in finding that it did not have subject matter jurisdiction to determine whether there was coverage for the accident under the insurance contract and the liability limit. It asserts that rather than seeking a declaratory judgment as to its obligations to the insureds, it was seeking a judicial determination of key elements related to Lariscy's direct action claim against National Indemnity. According to National Indemnity, coverage and policy limits are elements of direct action claims and these types of claims are not within the superior court's exclusive jurisdiction.

         "The general rule in Georgia is that 'a party may not bring a direct action against the liability insurer of the party who allegedly caused the damage unless there is an unsatisfied judgment against the insured or it is specifically permitted either by statute or a provision in the policy.'" McGill v. Am. Trucking & Transp., Ins. Co., 77 F.Supp.3d 1261, 1264-65 (N.D.Ga. 2015) (quoting Hartford Ins. Co. v. Henderson & Son, Inc., 258 Ga. 493, 494 (371 S.E.2d 401) (1988)). However, Georgia has codified statutory exceptions to this rule, the direct action statutes, which permit a direct action by an injured party against an insurance carrier which insures a motor carrier. See OCGA § § 40-1-112 (c), 40-2-140. As relevant here,

[OCGA ยง 40-1-112 (c)] states, "It shall be permissible under this article for any person having a cause of action arising under this article to join in the same action the motor carrier and the insurance carrier, whether arising in tort or contract." Since the direct action statute is in derogation of common law, its terms require strict compliance. The purpose of permitting joinder of the insurance company in a claim against a common carrier is to further the policy of the Motor Carrier Act, that is, to protect the public against injuries caused by the motor carrier's negligence. Stated another way, the purpose of the insurance is not for the benefit of the insured motor common carrier but for the sole benefit of those who may have a cause of action for damages for the negligence of the motor ...

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