Auto-Owners Insurance Company v. Tracy.
344 Ga. App. 53
Ga. Ct. App.2017Background
- Subcontractor Jerod Tracy (Tracy Transport, LLC) sued general contractor Holli Bortz d/b/a JL Hardscapes in magistrate court for nonpayment; default judgment entered against "Holli Bortz d/b/a JL Landscapes."
- Case transferred to superior court; Tracy amended to add James Lally (d/b/a JL Hardscapes) and Auto-Owners Insurance (Auto-Owners), alleging Lally held himself out as co-owner/agent and Auto-Owners insured Lally/JL Hardscapes.
- Tracy sought breach-of-contract damages (lost wages, truck, business) and attempted a direct action against Auto-Owners as the CGL insurer.
- Auto-Owners moved to dismiss for lack of privity/failure to state a claim, moved for summary judgment on coverage, moved to quash a subpoena, and sought attorney fees for a canceled deposition. Trial court denied all motions.
- Court of Appeals granted interlocutory review: reversed denial of motion to dismiss (no direct-action basis), affirmed denial of attorney fees (no abuse of discretion). Other issues rendered moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a non-insured plaintiff may sue a liability insurer directly without an unsatisfied judgment, statutory authorization, or policy provision permitting it | Tracy argued Auto-Owners insured Lally/JL Hardscapes and thus Auto-Owners is liable to him directly for contract damages | Auto-Owners argued Tracy lacked privity with insurer, had no unsatisfied judgment against the insured named in the policy, and cited no policy/statute allowing a direct action | Reversed trial court: dismissed Auto-Owners; a non-insured cannot sue insurer directly absent unsatisfied judgment against insured, statute, or policy provision permitting it |
| Whether the default judgment against "Holli Bortz d/b/a JL Landscapes" satisfied the unsatisfied-judgment requirement against Auto-Owners' insured | Tracy relied on default judgment to pursue insurer | Auto-Owners noted policy named "James Lally dba JL Hardscapes" as insured, not Holli Bortz; trade-name judgment therefore did not show an unsatisfied judgment against the insured | Held default judgment against "Holli Bortz d/b/a JL Landscapes" did not establish an unsatisfied judgment against the insurer’s named insured |
| Whether allegations that Tracy or Bortz were insureds as employees/agents sufficed to defeat dismissal | Tracy alleged they were employees/agents of Lally and thus insured | Auto-Owners noted complaint lacked factual allegations that Tracy was Lally’s employee or that Bortz was insured as spouse/employee per declarations | Held allegations unsupported by facts insufficient; complaint fails to allege privity or insured status |
| Whether trial court abused discretion in denying attorney fees under OCGA § 9-11-30(g)(1) for missed deposition | Tracy’s counsel claimed illness prevented timely notice of cancellation | Auto-Owners sought fees for travel and preparation including time drafting the fee motion | Held no abuse of discretion denying fees; discretion permitted and fees for drafting the motion were not recoverable as attendance expenses |
Key Cases Cited
- Seay v. Roberts, 275 Ga. App. 295 (appellate standard for motion to dismiss)
- Barrett v. Nat. Union Fire Ins. Co., 304 Ga. App. 314 (insured-status/allegations for direct action)
- Richards v. State Farm Mut. Automobile Ins. Co., 252 Ga. App. 45 (non-insured cannot sue insurer without unsatisfied judgment/statute/policy provision)
- Hartford Ins. Co. v. Henderson & Son, 258 Ga. 493 (insurer generally not directly liable absent judgment/policy/statute)
- Samples v. Ga. Mut. Ins. Co., 110 Ga. App. 297 (trade-name judgment treated as judgment against individual)
- Haezebrouck v. State Farm Mut. Automobile Ins. Co., 252 Ga. App. 248 (dismissal where plaintiff not in privity and no unsatisfied judgment)