346 Ga. App. 237
Ga. Ct. App.2018Background
- On April 3, 2015 Verlinda and Kevin Jones were test-driving a vehicle owned by Five Star Automotive Group when it was rear-ended by Rashod Lamar.
- The Joneses had no personal auto insurance; they settled Lamar’s liability policy limits and executed a limited liability release, then sought uninsured motorist (UM) benefits from Federated Mutual (insurer of Five Star) for medical bills exceeding the settlement.
- Five Star, as the named insured on the Federated policy, executed a UM election form selecting tiered UM coverage: $1,000,000 for directors/officers/owners (and qualifying family members) and expressly rejecting UM coverage for "any other person who qualifies as an insured." The Joneses did not fall into the $1,000,000 category.
- Federated moved for summary judgment asserting the Joneses were excluded from UM coverage under the policy’s plain terms; the trial court agreed, relying on the policy language and Crouch v. Federated.
- The Court of Appeals affirmed, holding the tiered UM election was valid under OCGA § 33-7-11, the policy language was unambiguous, and the named insured may partially reject or limit UM coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Joneses qualify as "insureds" under UM statute so as to trigger UM coverage despite policy exclusion | Jones: UM statute defines "insured" to include persons using a vehicle with named insured's consent, so they should be covered | Federated: OCGA § 33-7-11(a)(3) permits the named insured to reject UM coverage in writing; Five Star expressly rejected coverage for "any other person" | Court: Rejected Joneses; named insured may reject UM coverage in writing and the rejection here applied to them |
| Whether the UM statute requires an "all-or-nothing" election (cannot accept UM for some insureds while rejecting for others) | Jones: Named insured may not both select higher limits for some and reject coverage for others; statute prohibits such tiering | Federated: Statute contains no all-or-nothing restriction; freedom to contract allows tiered elections so long as statutory minimums/offers are satisfied | Court: No all-or-nothing requirement; tiered UM coverage is permissible when election/rejection complies with statute (Crouch controlling) |
| Whether the tiered UM provision violates public policy | Jones: Discriminatory against non-owner drivers and contrary to the UM statute’s remedial purpose | Federated: Legislature defined the public policy via OCGA § 33-7-11; written rejections serve notice and choice; freedom of contract applies | Court: Public-policy challenge fails; statute authorizes the rejections and courts should not judicially override the legislative policy choice |
| Whether any ambiguity in policy precludes summary judgment | Jones: Policy should be construed in favor of coverage or found ambiguous | Federated: Policy language is clear and unambiguous excluding Joneses from the $1M tier | Court: Policy unambiguous; summary judgment for insurer proper |
Key Cases Cited
- Crouch v. Federated Mut. Ins. Co., 257 Ga. App. 604 (2002) (upholding tiered UM coverage chosen by named insured and rejecting challenge to its validity)
- Dees v. Logan, 282 Ga. 815 (2007) (policy provisions conflicting with OCGA § 33-7-11 are unenforceable; statute controls)
- Doe v. Rampley, 256 Ga. 575 (1987) (UM coverage must appear unless rejected in writing by named insured)
- Hurst v. Grange Mut. Cas. Co., 266 Ga. 712 (1996) (insurers may fix policy terms provided they are not contrary to law)
- State Farm Mut. Auto. Ins. Co. v. Murphy, 226 Ga. 710 (1970) (policy exclusions conflicting with UM statute can be voided where no valid statutory rejection exists)