313 Ga. 294
Ga.2022Background:
- A stolen car chased by College Park police struck and killed three occupants; plaintiffs sued the City for negligence and recklessness.
- At the time, the City held an Atlantic Specialty policy with $1,000,000 business-auto and $4,000,000 excess-liability limits (aggregate $5,000,000) but both sections included "Georgia Changes – Protection of Immunity" endorsements stating the insurer "has no duty to pay" when sovereign/governmental immunity defenses apply.
- OCGA § 36-92-2(a)(3) automatically waives sovereign immunity for motor-vehicle losses up to $700,000 for two or more deaths; OCGA § 36-92-2(d)(3) states the waiver "shall be increased to the extent that" the local government purchases commercial liability insurance in excess of the statutory waiver.
- Plaintiffs argued the City’s purchase of the $5,000,000 policy waived immunity to that limit and attacked the endorsements as contrary to public policy; Atlantic intervened and contended coverage (and thus waiver) is limited to the $700,000 statutory floor because the endorsements preclude payment when immunity applies.
- Trial court and Court of Appeals held the policy increased the waiver to $5,000,000; the Georgia Supreme Court granted certiorari and reversed, holding the endorsements valid and the waiver increased only to the extent the purchased insurance actually covers the claim (here, only to $700,000 for these claims).
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether purchase of liability insurance in excess of the $700,000 statutory motor-vehicle waiver automatically increases sovereign-immunity waiver to the policy limits | City’s purchase of a $5,000,000 policy automatically raises waiver to $5,000,000 | Waiver increases only if the purchased insurance actually covers the particular claim; endorsements exclude coverage when sovereign immunity applies | Purchase increases waiver only to the extent the policy actually provides coverage for the claim; here waiver remains $700,000 |
| Whether the policy’s Immunity Endorsements are void as contrary to public policy because they permit contracting around the statutory waiver | Endorsements unlawfully "contract around" legislative intent and are unenforceable | Endorsements reflect the parties’ bargained-for allocation of risk and are consistent with the statutory scheme allowing discretionary purchase of excess coverage | Endorsements are enforceable and not contrary to public policy |
| Proper reading of OCGA § 36-92-2(d)(3): does "purchase of insurance" alone expand the waiver irrespective of policy terms? | Statute should be read to increase waiver to the amount of insurance purchased regardless of policy exclusions | Statute increases waiver only where the insurance purchased actually covers the loss at issue | § 36-92-2(d)(3) requires analysis of policy coverage; the waiver rises only if the policy covers the claim beyond the automatic limit |
Key Cases Cited
- Cameron v. Lang, 274 Ga. 122 (pre-2002 scheme required insurance coverage to waive immunity)
- Gates v. Glass, 291 Ga. 350 (describing two-tier statutory scheme and coverage analysis)
- Gatto v. City of Statesboro, 312 Ga. 164 (policy with immunity endorsement does not waive immunity where policy does not cover the claim)
- Owen v. City of Independence, 445 U.S. 622 (municipal liability under § 1983 not barred by sovereign immunity)
- Owens v. City of Greenville, 290 Ga. 557 (courts analyze policy language to determine waiver)
- Dugger v. Sprouse, 257 Ga. 778 (no waiver where policy plainly provides no coverage)