Liberty Mutual Fire Insurance Company v. Quiroga-Saenz.
343 Ga. App. 494
| Ga. Ct. App. | 2017Background
- In Aug. 2013 Maria Quiroga-Saenz rear-ended her sister Armandina; damages and medical expenses followed. Armandina sued in Apr. 2015. Proof of service was filed Nov. 5, 2015. Maria defaulted Dec. 8, 2015.
- Armandina moved for and obtained a $1,000,000 default judgment on Dec. 22, 2015 — 14 days after default and before the 15-day automatic period to open default had run. Maria filed an answer and moved to set aside the judgment on Dec. 23.
- Liberty Mutual, Maria’s insurer (on her husband’s policy), learned of service/ default in mid-Dec., retained counsel for Maria, and reserved rights. Maria later settled with Armandina and assigned (or purported to assign) her claims against Liberty Mutual and withdrew the motion to set aside.
- Liberty Mutual moved to intervene (Jan. 18, 2016), arguing Maria abandoned meritorious defenses (e.g., statute of limitations) to the insurer’s detriment. The trial court denied intervention as untimely and unmeritorious.
- On appeal Liberty Mutual argued (1) the default judgment was void because entered before the 15-day period expired and (2) the court erred in denying its motion to intervene. The Court of Appeals affirmed as to jurisdictional voidness but reversed as to intervention, granting Liberty Mutual the right to intervene.
Issues
| Issue | Plaintiff's Argument (Armandina) | Defendant's Argument (Liberty Mutual) | Held |
|---|---|---|---|
| Whether default judgment was void for lack of subject-matter jurisdiction because entered before the 15-day opening period expired | Judgment valid; entered by trial court | Judgment entered prematurely under OCGA § 9-11-55(a) and therefore void | Judgment was entered prematurely but is voidable, not void on its face; Liberty Mutual (a non-party) lacked standing to directly attack it on appeal |
| Whether Liberty Mutual had a right to intervene after Maria’s settlement/assignment | Intervention untimely and Liberty Mutual’s interest not impaired; insurer delayed in acting | Intervention timely given reservation of rights and post-settlement impairment of insurer’s ability to defend; oral/ written reservation preserved rights | Trial court abused discretion denying intervention; Liberty Mutual entitled to intervene under OCGA § 9-11-24(a) |
| Whether Liberty Mutual’s reservation of rights sufficed to preserve its ability to seek declaratory relief or later challenge the default judgment | No prejudice or impairment to insurer; insurer had not fully assumed obligations | Reservation of rights gave timely unilateral notice; insurer risks being unable to attack judgment later if excluded | Reservation of rights was timely; without intervention Liberty Mutual’s practical ability to protect its interests could be impaired |
| Whether intervention was untimely because insurer waited after learning of service/default | Insurer waited too long after notice to intervene; delay prejudiced parties | Insurer moved promptly after learning Maria settled and withdrew set-aside motion; moved within 11 days of settlement | Motion to intervene was timely; trial court abused discretion in deeming it untimely |
Key Cases Cited
- Davis v. Deutsche Bank Nat. Trust Co., 285 Ga. 22 (discussing who has standing to appeal/attack a judgment)
- Rice v. Champion Bldgs., 288 Ga. App. 597 (non-parties lack standing to appeal or set aside default judgments in underlying suits)
- Logan v. Nunnelly, 128 Ga. App. 43 (distinguishing judgments void on face from those voidable after factual inquiry)
- Murphy v. Murphy, 263 Ga. 280 (judgment subject to direct attack when defect not apparent on face)
- Sta-Power Indus. v. Avant, 134 Ga. App. 952 (timeliness requirement for intervention; intervention after judgment requires strong showing)
- Stephens v. McGarrity, 290 Ga. App. 755 (denial of intervention was abuse where interested party moved promptly after objecting)
- Richmond v. Ga. Farm Bureau Mut. Ins. Co., 140 Ga. App. 215 (an insurer may give timely unilateral reservation of rights when insured refuses bilateral agreement)
- Kelly v. Lloyd's of London, 255 Ga. 291 (filing an answer with reservation and later seeking declaratory relief did not waive insurer's rights)
- State Auto Mut. Ins. Co. v. Relocation & Corporate Housing Svcs., 287 Ga. App. 575 (limits on collateral attacks and jurisdiction to set aside judgments)
- Lawrence v. Noltimier, 213 Ga. App. 628 (statute-of-limitations defense may be lost if plaintiff successfully shows service diligence issues)