State Farm Fire & Casualty Co. v. Bauman
313 Ga. App. 771
Ga. Ct. App.2012Background
- Bauman child injured during bicycle accident while Van de Veire provided paid after-school care at her home.
- Van de Veire was insured under State Farm homeowners policy; policy excluded coverage for injuries to a child while the insured provides child care.
- Baumans reached a judgment against Van de Veire for $300,000 and then pursued a direct action against State Farm for policy proceeds.
- State Farm initially defended under a reservation of rights, then withdrew defense and notified exclusion on coverage for the injury.
- Baumans and Van de Veire agreed: Van de Veire would assign her rights if judgment recovered; Baumans agreed not to collect from Van de Veire.
- Trial court denied summary judgment; on appeal, court held policy exclusion applied because care was not occasional.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the exclusion for child care services preclude coverage? | Baumans argue exclusion applies to injuries while care was provided. | State Farm argues exclusion bars coverage; exceptions do not apply. | Exclusion applies; no coverage for injuries. |
| Do the exceptions to the exclusion (occasional vs under 19) apply to Van de Veire? | Baumans contend exceptions could apply if care were occasional or by a under-19 insured. | State Farm contends exceptions do not apply since Van de Veire was over 19 and care was not occasional. | Exceptions do not apply; care was not occasional, thus exclusion bars coverage. |
Key Cases Cited
- Smith v. Government Employees Ins. Co., 179 Ga. App. 654 (Ga. App. 1986) (direct-action recovery when insured liable to injured party)
- Hartford Ins. Co. v. Henderson & Son, Inc., 258 Ga. 493 (Ga. 1988) (recognizes direct-action framework against insurer)
- Integon Indem. Corp. v. Henry Med. Center, 235 Ga. App. 97 (Ga. App. 1998) (privity considerations in direct actions against insurer)
- Owners Ins. Co. v. Smith Mechanical Contractors, 285 Ga. 807 (Ga. 2009) (insurer may raise defense in direct action despite denying coverage)
- Southern Guaranty Ins. Co. v. Dowse, 278 Ga. 674 (Ga. 2004) (limits of insurer defenses in direct actions)
- Infinity Gen. Ins. Co. v. Litton, 308 Ga. App. 497 (Ga. App. 2011) (ambiguity question is a matter of law; ordinary meaning applies)