329 Ga. App. 609
Ga. Ct. App.2014Background
- In Oct. 2009 Donovan was a passenger injured in a collision with a vehicle driven by Jonathon McMillon; she alleges >$100,000 in damages.
- McMillon’s liability insurer (Progressive) paid its $25,000 policy limits to Donovan.
- Three UM (underinsured motorist) policies potentially applied: State Farm (Donovan’s mother; difference-in-limits UM), Grange (mother; excess UM), and GMAC (truck owner; excess UM). Each UM policy has $25,000 limits.
- Donovan sued McMillon and the three UM carriers; State Farm moved for summary judgment seeking a $25,000 set-off for the Progressive payment against State Farm’s $25,000 UM limit.
- Donovan argued stacking and priority-of-payment rules require a different result; she stipulated Grange and GMAC are not entitled to set-offs; the trial court granted summary judgment for State Farm.
- On appeal the Court of Appeals reviewed de novo and affirmed, holding State Farm (the sole difference-in-limits carrier) is entitled to set off the $25,000 recovery from McMillon’s insurer, which exhausts State Farm’s UM coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether State Farm may set off the $25,000 paid by McMillon’s liability insurer against State Farm’s $25,000 UM limit | Donovan: Georgia law allows stacking and priority-of-payment rules across available UM carriers so State Farm should not be allowed a full set-off that eliminates UM coverage | State Farm: It is the sole difference-in-limits UM carrier; under OCGA and Georgia precedent it is entitled to set off available liability payments against its difference-in-limits UM limits | Court: Affirmed — State Farm entitled to $25,000 set-off; after set-off no UM coverage remains under State Farm |
| Whether priority-of-payment rules must be applied here | Donovan: Priority rules apply whenever multiple UM carriers exist | State Farm: Priority rules unnecessary because only one difference-in-limits carrier exists; other UM policies are excess and not entitled to set-off | Court: Priority rules not required here; Grange and GMAC are excess UM and not entitled to set-off; only State Farm’s difference-in-limits policy is relevant |
Key Cases Cited
- Campbell v. The Landings Assn., Inc., 289 Ga. 617 (2011) (standard of review on summary judgment is de novo)
- State Farm Mut. Automobile Ins. Co. v. Adams, 288 Ga. 315 (2010) (purpose of UM coverage is to place insured in position as if tortfeasor had liability coverage)
- Progressive Classic Ins. Co. v. Nationwide Mut. Fire Ins. Co., 294 Ga. App. 787 (2008) (discusses stacking and three priority-of-payment tests)
- Ga. Farm Bureau Mut. Ins. Co. v. State Farm Mut. Automobile Ins. Co., 255 Ga. 166 (1985) (applied receipt-of-premium test to determine set-off entitlement)
- Travelers Indem. Co. v. Maryland Cas. Co., 190 Ga. App. 455 (1989) (applied more-closely-identified test for priority of payment)