Fcci Insurance Company. v. McLendon Enterprises, Inc.
297 Ga. 136
Ga.2015Background
- Collision (Sept. 22, 2011) between a McLendon truck and an Evans County school bus injured McLendon employee Mitchell and passengers; Evans County school district (through GSBA) had $1,000,000 liability coverage.
- GSBA paid $1,000,000: $350,000 to two passengers and $650,000 to Mitchell; Evans County and its driver retained sovereign immunity for amounts above the policy limits.
- Mitchell sought uninsured/underinsured motorist (UM/UIM) benefits from his employer’s insurer, FCCI, after other personal UM policies and the school district’s policy were exhausted.
- FCCI denied UM benefits contending the policy required the insured to be "legally entitled to recover" from the tortfeasor, but sovereign immunity prevents establishing entitlement beyond the GSBA limits.
- District Court (applying Tinsley) ruled Mitchell could recover UM benefits despite partial sovereign immunity; Eleventh Circuit certified the Georgia-law question to the Georgia Supreme Court.
Issues
| Issue | Plaintiff's Argument (Mitchell) | Defendant's Argument (FCCI) | Held |
|---|---|---|---|
| Whether an insured may recover UM/UIM benefits when the tortfeasor has partial sovereign immunity | “Legally entitled to recover” requires only that the tortfeasor’s fault caused damages; sovereign immunity should not bar UM recovery | The phrase requires the insured to be able to recover from the tortfeasor; sovereign immunity defeats that requirement | Yes — insured can recover UM/UIM benefits despite partial sovereign immunity |
| Applicability of Tinsley (insureds barred from suing fully immune tortfeasor) to partial-immunity cases | Tinsley’s rationale applies equally when immunity is partial; insurer shouldn’t escape contractual liability | FCCI argued Tinsley limited to full immunity scenarios and shouldn’t extend to partial immunity | Court applied Tinsley reasoning to partial immunity and approved District Court’s extension |
| Effect of OCGA §33-24-51 and policy language on recovery when governmental entity purchased limited liability insurance | Statute treats governmental entities as private for defensive purposes when they purchase insurance; insureds should recover from their UM carrier when liability policy limits are exhausted | FCCI’s interpretation would undermine statutory waiver and incentivize counties to alter insurance purchase decisions | Statute and policy interpretation support UM recovery to make injured parties whole beyond governmental insurer limits |
| Treatment of “underinsured” drivers as “uninsured” for UM coverage purposes | Georgia statutes and the policy definition encompass underinsured motorists as uninsured for UM purposes; therefore UM/UIM coverage should apply | FCCI sought to distinguish underinsured from uninsured for this recovery rule | Court held treating underinsured as uninsured for these purposes is consistent with statute and policy language |
Key Cases Cited
- Tinsley v. Worldwide Ins. Co., 212 Ga. App. 809 (1994) (permitting UM recovery when sovereign immunity prevents suing the tortfeasor and explaining insurer is real party in interest)
- Wilkinson v. Vigilant Ins. Co., 236 Ga. 456 (1976) (holding judgment against uninsured motorist requirement inapplicable in certain circumstances such as bankruptcy)
- Gates v. Glass, 291 Ga. 350 (2012) (discussing statutory waiver of sovereign immunity when local governments purchase insurance)
- Crider v. Zurich Ins. Co., 222 Ga. App. 177 (1996) (legislative intent of waiver statute is to increase compensation for those injured by government employees)
- Durrah v. State Farm Fire & Cas. Co., 312 Ga. App. 49 (2011) (discussing post-amendment effect on requirement of judgment against uninsured motorist)