Travelers Home & Marine Insurance Company v. Castellanos, 297 Ga. 174

Background

In 2009 Castellanos obtained a judgment against Jose Santiago (including punitive damages) after Santiago, defended by United Automobile Ins. Co., did not appear at trial.
United offered a post-trial settlement for less than the judgment, denied punitive damages coverage, and later denied coverage for Santiago entirely, citing Santiago’s failure to cooperate in defense.
Castellanos demanded payment from his UM carrier, Travelers; Travelers did not respond and Castellanos sued Travelers for bad-faith refusal to pay under OCGA § 33-7-11(j).
Travelers defended by asserting Santiago was not an “uninsured motorist” because United had not “legally denied” coverage—United’s denial was based on alleged noncooperation by Santiago.
At summary judgment the trial court granted Travelers’ motion for summary judgment for lack of evidence that United’s coverage denial was legally sustainable; the Court of Appeals reversed, shifting the burden to Travelers; the Supreme Court granted certiorari.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Who bears the burden at summary judgment when UM coverage is denied because the tortfeasor’s insurer purportedly "legally denied" coverage?	Castellanos: once he shows entitlement to UM benefits, Travelers must justify its denial (i.e., Travelers bears burden to prove denial was unsustainable).	Travelers: insured (Castellanos) must prove prima facie that the tortfeasor was uninsured, including that the underlying insurer’s denial was legally sustainable.	Held: Insured bears burden to prove entitlement to UM coverage, including evidence that the tortfeasor’s insurer legally denied coverage; burden was on Castellanos.
What must plaintiff prove to show an insurer’s denial for noncooperation was legally sustainable?	Castellanos: argued prejudice could be presumed from tortfeasor’s absence and thus minimal proof needed on cooperation efforts.	Travelers: required plaintiff to show insurer reasonably requested cooperation, insured willfully refused, and insurer was prejudiced.	Held: Plaintiff must produce specific evidence on (1) insurer’s reasonable request for cooperation, (2) insured’s willful, intentional refusal, and (3) prejudice—but prejudice may be presumed where the insured was completely absent from trial.
Whether prejudice can be presumed from the insured’s absence at trial in UM context.	Castellanos: absence supports presumed prejudice given practical trial impact.	Travelers: contested broad presumptions without concrete proof.	Held: In UM cases, complete absence of tortfeasor from trial can give rise to a presumption of prejudice to the insurer, subject to rebuttal by the UM carrier.
Whether Castellanos created a triable issue to defeat Travelers’ summary judgment motion.	Castellanos: argued record showed United denied coverage for noncooperation and Santiago did not appear, so disputed facts exist.	Travelers: highlighted lack of evidence that United requested cooperation or that Santiago willfully refused; denial letter lacked supporting facts.	Held: Castellanos failed to produce specific evidence about United’s efforts or Santiago’s willful noncooperation; summary judgment for Travelers affirmed.

Key Cases Cited

Southern Gen. Ins. Co. v. Thomas, 197 Ga. App. 196 (court requires denial to be legally sustainable to count as "legally denied")
Cowart v. Widener, 287 Ga. 622 (summary judgment requires specific evidence creating triable issue)
Vaughan v. ACCC Ins. Co., 314 Ga. App. 741 (elements to justify denial for insured’s noncooperation)
H.Y. Ayers & Sons, Inc. v. St. Louis Fire & Marine Ins. Co., 120 Ga. App. 800 (prejudice from insured’s absence from trial may be presumed)
Smith v. Commercial Union Assur. Co., 246 Ga. 50 (UM statutes are remedial; construed broadly to protect victims)