Southern General Insurance v. Wellstar Health Systems, Inc.
315 Ga. App. 26
| Ga. Ct. App. | 2012Background
- Southern General issued a $25,000 automobile liability policy to its insured.
- In September 2007, the insured’s vehicle hit a bicycle; Gray incurred $22,047.50 in medical expenses at Wellstar.
- Wellstar filed hospital liens in October 2007 to recover treatment costs against any Gray recoveries.
- Southern General offered to settle Gray for $25,000, conditioning settlement on lien satisfaction; Gray’s demand letter followed within five days.
- Gray’s attorney indicated willingness to sign a general release but objected to indemnification; Southern General paid $25,000 on October 29, 2007 and Gray signed a release without indemnity on October 31, 2007.
- Wellstar sued Southern General to recover the lien amount ($22,047.50) plus fees; Southern General moved for summary judgment, which the trial court denied; the court then granted summary judgment to Wellstar, and the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Conflict between Holt/Frickey and lien statutes | Southern General says conflicts require paying excess to insured. | Wellstar and Holt/Frickey allow safe harbor by satisfying liens. | No irreconcilable conflict; safe harbor exists; denial of summary judgment affirmed. |
| Equal protection claim viability | Law creates liability for insurers not faced by others. | Question not ripe; trial court did not rule on constitutional issue. | Constitutional issue not reached; argument deemed not ripe. |
Key Cases Cited
- Frickey v. Jones, 280 Ga. 573 (2006) (settlement offer issues; lien resolution not binding)
- State Farm Mut. Auto. Ins. Co. v. Holt, 262 Ga. 267 (1992) (bad-faith settlement when damages exceed policy limits)
- Cotton States Mut. Ins. Co. v. Brightman, 276 Ga. 683 (2003) (insurer’s duty to respond to deadlines; safe harbor concept)
- State Farm Mut. Auto. Ins. Co. v. Adams, 288 Ga. 315 (2010) (hospital liens and insurer responsibilities)
- Fortner v. Grange Mut. Ins. Co., 286 Ga. 189 (2009) (liens and insurer liability context for Holt/Brightman framework)